Nathan Sivers Boyce
Making the invisible visible
The explosion of the Deepwater Horizon and the subsequent oil spill are a disaster that has unfolded for us as a series of images. We've been riveted by videos of the exploding platform and the underwater oil plume, and now by pictures of dead pelicans and white sand beaches turned black and sticky. We look on in a kind of fascinated horror, unable to turn away. But what should we learn from what we are seeing?
As a nation, we consume more than 20 million barrels of oil each day-almost three times as much as China, the second largest consumer in the world. This need not be the case.
At every level of our economy, there are technological, organizational and behavioral alternatives that, if adopted, would significantly reduce our consumption of petroleum products. But it is easy to see why we make the choices we do; oil is cheap.
The average price of gasoline in the United States last week was just over $2.90 per gallon, about the same price as a gallon of milk and less than the equivalent amount of Coke or Pepsi. Such low prices keep us, individually and collectively, from seriously considering alternatives.
The trouble is that oil and other fossil fuels aren't nearly as cheap as they seem to be.
A 1998 study by the International Center for Technology Assessment estimated that the total cost of producing and consuming gasoline is $4.60-$14.14 per gallon higher than the price we pay for it. These "external costs," as economists describe them, aren't paid by the oil refineries, so they don't show up in the price of gasoline. But we pay for them just the same.
We pay in the form of higher taxes to underwrite government subsidies for exploration and refining. While energy companies receive federal and state tax breaks, we pay in the form of property damage and health care costs resulting from air and water pollution.
If refineries increase profit by distributing costs - or risk - to others, that is the rational choice.
Perhaps you have heard some version of this argument before; many of us have. After all, it has been around in much the same form for nearly 100 years. Unfortunately, even when we are aware of them at some level, these hidden costs are all too easy to ignore. They don't have the immediacy of money paid out of pocket. So, they don't seem real, their connection to our decisions feels somehow vague and theoretical.
When confronted with choices, we persist in treating gasoline as if it really only costs $2.90 per gallon and we ask, "Can we afford to change?"
That is the value of all these images of tragedy. They are making the invisible visible.
Images are not so easily dismissed as abstractions, and we are seeing "external costs" distilled and given comprehensible form. So, don't change the change the channel. Remember what you have seen when the urgency of this crisis has passed-when you fill up your gas tank, when you buy your next car, and when energy policy makes its way again into the national conversation.
Let these images remind you that although fossil energy seems cheap, it is not. Maybe we have been asking ourselves the wrong question all along. Instead of asking if we can afford to change, we should be asking if we can afford not to.
Nathan Sivers Boyce is an economist at Willamette University. His specializes in the economics of international environmental agreements.