Why Cheap Fossil Fuel Costs Us Plenty

By Ed Hunt

Cheap fossil fuels are expensive.

We don't pay a lot at the pump, but our addiction to fossil fuels costs us more than we know.

Subsidized by US tax dollars, fossil fuels are artificially cheap at the consumer level. Their widespread availability acts as a sort of inertia, inhibiting investment in clean and renewable energy sources.

Cheap fossil fuels also inhibit the changes in behavior and technology that could allow us to use cleaner, more renewable energy sources more efficiently. As a result our economy is tied too much to the price of a gallon of gas. This makes the US economy inefficient and susceptible to price fluctuations whenever the supply is disrupted in the Middle East or South America.

In researching this issue of Section Z, we found that many of the clean energy technologies discussed aren't new at all -- most had been discovered or invented at various times between 50 and 150 years ago.

The hydrogen fuel cell was invented in 1843. The hybrid-electric car was patented in 1905. Wind, water and solar power have been around for centuries, of course, but did you know that California had a thriving solar hot water heater industry back in the early 1900s? Or that in the 1930s, 40 percent of electricity in the US came from hydropower systems?

Things like solar and small hydropower systems were considered a useful solutions to meeting local energy needs -- but interest faded because fossil fuel power was so cheap and so plentiful.

Perhaps if we had realized the true costs of fossil fuels earlier, we would have invested a little more time and energy into developing the alternatives.

Yet, today there is renewed interest in clean and renewable energy technologies even though gas is still cheaper than bottled water and coal is plentiful enough to last well into the foreseeable future.

Why?

Well, bills for our fossil fuel addiction are starting to show up on the doorstep, and so many are looking for a better way.

The price we pay at the pump doesn't reflect billions of tax dollars that go to support the fossil fuel economy.

Moreover, such direct subsidies don't include other costs that are more difficult to tally. The use of fossil fuels significantly increases the amount of carbon in the atmosphere, which in turn alters the functioning of the complex climate machine that keeps the earth habitable for humans, allows us to produce crops and live by the sea. We know the climate is getting warmer, we also know that a warmer climate is more dynamic -- more prone to high energy events such as storms, hurricanes, tornados and weather extremes including both droughts and floods.

Such major weather events and changes in climate can result in huge costs in the form of failed crops, destroyed homes, higher insurance rates, even in the spread of infectious disease and invasive species.

None of these costs are reflected at the pump.

There are other costs as well. Our reliance on dirty fuels like coal and diesel oil can have significant impacts on human health.

The EPA has estimated that new rules to reduce the sulfur level of diesel exhaust will prevent 8,300 premature deaths each year, as well as as 5,500 cases of chronic bronchitis and 17,600 cases of acute bronchitis in children. Just cleaning up diesel emissions to levels now required in Europe could help avoid more than 360,000 asthma attacks and 386,000 cases of respiratory symptoms in asthmatic children every year, plus a savings of more than 1.5 million lost workdays annually according to the EPA. Those healthcare costs are paid for by businesses small and large that provide healthcare to employees, and by individuals who buy health insurance or contribute to Medicare.

There are military costs to our oil economy. We as taxpayers certainly pony up for this, but not at the pump. Instead the bill comes due at tax time, or when our friends and family members are sent overseas for long deployments, or to fight and die for our country. No one can put a pricetag on that. Was the war in Iraq all about oil? Even if that wasn't the main reason, most people recognize that oil is the main reason why this corner of the world matters so much to the global economy -- and why the unstable, undemocratic governments in this region have such influence over our foreign policy.

Critics on both the Left and the Right argue that our ties to these governments, and our entanglements in this region constitute a threat to the security of the nation. If you start adding the cost of homeland security to the gasoline bill, the price gets very steep indeed.

Yet there are other reasons why clean and renewable energy technologies are emerging from the smoggy shadow of fossil fuels. Thanks to advances in science and technology, clean and renewable energy just makes better economic sense.

Think of it this way -- fossil fuels like oil and coal come out of a hole in the ground. They are finite, only located in certain areas of the world, and they have to be refined and shipped all over the world. Most of these fuels can be used only once. Our whole fossil-fuel energy system is highly inefficient.

"In the US, for every 100 units of energy that we introduce into our economic system nearly 98 units are wasted," according to Paul Hawken the author of Natural Capitalism. "That's right, we are 2 percent efficient."

"If you doubt the 2 percent figure, consider two common energy devices, your car and a light bulb," Hawken explains. "After a century of engineering, the modern car is still in the Iron Age. Of the energy consumed, about 80 percent is lost, mainly in heat and exhaust. Of the 20 percent that gets to the wheels, only 5 percent moves the driver. Five-percent times 20 percent equals 1 percent, a level of inefficiency that means cars burn their weight every year in gasoline. In the case of incandescent light bulbs, 100 percent of the energy input to the lamp becomes heat; only 8 percent becomes light en route to heat. It essentially a space heater that glows. "

From an economic standpoint inefficiency means lost money. In business, waste is lost profit.

More and more businesses are realizing that the energy they consume is a cost of doing business that can be reduced or eliminated with some wise investment in clean energy technology. Some businesses are even realizing secondary income streams by turning their rooftops and waste products into new sources of energy.

The price stability of renewable sources of energy is also attractive. Wind, solar or tidal energy are not commodities that can be easily manipulated to extort profits. Indeed the majority of the price in wind turbines or solar panels is in the initial capital costs of the equipment. There is no need to ever pay for fuel -- thus switching to clean energy can make your business resistant to oil, natural gas and electricity price shocks caused by market conditions. Investing in renewable energy or energy efficiency pays off better than dropping money on the stock market.

Moreover, if a commitment is made to developing renewable energy resources, our region will reap the economic rewards. The Western United States has a wealth of untapped, clean and renewable energy resources that could help us reduce or dependence on fossil fuels. We have a wealth of innovation -- businesses invested in green energy poised to benefit with a commitment to renewable energy development.

The Pacific Northwest had more than a dozen businesses connected to fuel cell development and production. California has been a leader in solar power industry for a century. According to a recent report called Poised for Profit, worldwide the market for clean energy technologies over the next 20 years is expected to be $180 billion a year--more if nations adopt policies to address air pollution and global warming.

In the Northwest, clean energy is already a $1.4 billion industry and growing, providing 12,000 jobs to the region in the next two decades. If public policy changes to support green power development, the growth in industry and jobs could be much greater.

BIODIESEL

The Diesel engine was originally designed to run on vegetable oil -- now known as "biodiesel."

It's creator, Rudolf Diesel was a social reformer as well as inventor. And he saw his new engine empowering farmers and artisans, giving them a mechanical workhorse that could be fueled with the fruit of the land. Diesel saw the need for energy independence way back in 1895. He understood the importance of renewable energy and the problems with fossil fuel filled power. Diesel promoted the use of biodiesel until his untimely death in 1913.

Biodiesel is made by mixing vegetable or animal oil with methanol and lye. The result is a fuel that can run most diesel trucks and tractors, yet it emits fewer pollutants than petrodiesel and is nontoxic. Smells a lot better too.

Straight cooking oil can also be used with a minor modification. You just need to heat the fuel. A number of companies make fuel heaters that can be installed on most diesel vehicles. While refined biodiesel costs the same or a little more than petrodiesel, people have found they can pick up used deep fat fryer oil from restaurants for free. One estimate found that there is enough waste cooking oil produced each year in New York City to run the transit system --- for five years.

Over the last decade, biodiesel has been making a comeback. At first it was an underground home-brew type fuel. People made their own biodiesel at home in their garage and drove around town with the smell of fried foods wafting from the tailpipe.

However, in the last few years, biodiesel has begun to go mainstream. Commercially made biodiesel sales increased from 500,000 gallons in 1998 to 12 million gallons last year.

Much of today's biodiesel production is sold to cities who run fleets of hundreds of diesel trucks and other equipment. As city councils make commitments to reduce their C02 emissions and address air pollution problems, biodiesel is an alternative fuel that is getting attention.

A number of cities have switched to a cleaner burning biodiesel - diesel blend (B20) for their municipal truck and bus operations. The city of Berkeley California runs its trucks on pure biodiesel (B100) from recovered cooking oil.

According to a 1998 National Renewable Energy Laboratory study, using biodiesel benefits the environment. Burning biodiesel in a conventional diesel engine reduces carbon monoxide emissions by 43 percent, hydrocarbons by 56 percent, particulates by 55 percent and sulfurs, a particular problem with petroleum diesel, are reduced by 100 percent.

"Even if people are paying the same for this as diesel it's just so much better for the environment," John Lin told the New York Times. "A dog can lick this stuff right off the ground."

Lin runs his Ford Excursion on cooking oil from his fast food restaurant.

Biodiesel's competition for cleaning up the air -- for now anyway -- comes from Compressed Natural Gas -- a fuel that is already available and burns cleaner than B20. Some environmentalists see biodiesel as a barrier to phasing out diesel engines in favor of cleaner natural gas engines.

"Biodiesel [B20] is ever so slightly less polluting [than] regular diesel," Dan Becker, a spokesman for the Sierra Club told AP. "But it's nowhere near as clean as natural gas."

However, natural gas is a nonrenewable fossil fuel.

Weaning the city off fossil fuels was a factor when the Berkeley's Ecology Center was looking to convert its fleet of trucks to an alternative fuel. The center's recycling director investigated both biodiesel and Natural Gas before deciding to switch to pure biodiesel.

Moreover, converting a fleet of diesel buses to burn Natural Gas requires an expensive hardware investment -- between $2,700 to $6,000 per vehicle and possibly even the purchase of all new vehicles. In contrast, biodiesel runs in diesel engines with little or no modification.

Indeed biodiesel generally works with any diesel engine made after 1992 without modification. Older engines just need the natural rubber hoses and gaskets replaced.

Since fleet buyers of trucks, busses and tractors make long term investments in their vehicles -- and expect decades of use in return -- being able to switch to a less polluting fuel with little or no equipment modification is a huge incentive.

This allows fleet managers who cannot afford to buy new vehicles to keep their older vehicles on the road until they wear out. For cities facing a budget crunch, biodiesel provides a way reduce pollution with minimum capital investment.

So why isn't biodiesel in more widespread use?

Cost is the problem. Oil is just too cheap compared with virgin vegetable oil. Availability has been another problem, but both of these factors are changing. The cost is coming down and the refining capacity and distribution network is growing.

The vast majority of biodiesel consumed in the US is made of soybeans -- about 90 percent. The oil is actually a waste product from making soy meal for food. As demand for soy protein increases, the cost of the oil is bringing down the price of biodiesel. Soybeans currently don't earn much on the commodities market and so soybean farmers are some of the strongest advocates for biodiesel.

According to a recent Energy Department study, production could be increased to six billion gallons a year if other crops -- mustard and rapeseed for example -- are recruited to the job.

Waste cooking oils recovered from restaurants and other oil seed crops make up the rest. The US creates enough waste cooking oils to produce 500 million gallons of biodiesel every year.

It's unlikely that we will every produce enough biodiesel to replace all the oil we burn in our trucks. However, biodiesel is a great example of how we can use local resources -- particularly the stuff we now throw away -- to reduce our dependence on fossil fuels and clean up the environment in the process.

ELECTRIC CARS

Electric cars are nothing new either. They appeared on the scene about the same time as Diesel was inventing his peanut-oil powered engine. They were quieter, cleaner and easier to use than early gasoline engines and steam cars -- and they were safer too. At a time when you had to hand-crank a tin-lizzie to life. Electric cars were quiet and simple -- with no need for a transmission, clutch, crank or other complicated machinery. Electric cars were still being sold as late as 1915.

HYBRID POWER

Hybrid gas-electric cars were first patented in 1905 by American engineer H. Piper. Piper's design used an electric motor combined with a gasoline engine to accelerate a car three times faster than the gasoline engines of the day. His and other designs faced an obstacle at the time in that electricity was expensive and hard to obtain compared to cheap gasoline. A 1916 Popular Science article boasted that one hybrid design offered "the great mileage ability of the gas car and at the same time the simplicity of the electric."

Several hybrid powered vehicles were built around this time, but the hybrid design really found its early niche in heavier applications. Diesel-electric hybrid systems powered all submarines in World War I and II until the advent of nuclear power. Diesel-electric hybrid locomotives have become standard after replacing steam power for trains in the first half of the century.

Hybrid cars were largely forgotten for the most of the century, until automakers returned to the engineering solution in the 1990s. In 1997, the Toyota Prius was the first hybrid-electric car sold to an eager public in Japan where gas cost $3 a gallon at the time.

The original Prius has become a status symbol for the green minded. The second generation of the Prius goes on sale this year, redesigned to offer more room and better acceleration and mileage. Meanwhile other carmakers are introducing hybrid powered cars, trucks and SUVs. In fact the Army expects to purchase tens of thousands of hybrid trucks in the coming decade.

Hybrids have a number of advantages depending on how they are configured. Some hybrids use an electric motor to give a gasoline engine an acceleration boost. Others can run on either electric or gasoline motors alone, or both when an extra boost of energy is needed. This allows hybrids to use only the electric motors while starting, stopping and driving around town -- where gas engines are at their least efficient -- saving both fuel and eliminating smog causing and climate warming emissions.

Most hybrids also use something called regenerative breaking -- basically turning the breaks of the car into electricity generators to charge the batteries. This not only improves mileage, it actually improves break performance as well.

Indeed, there are a number of performance advantages to be found in the hybrid configuration. Ford's Hybrid Escape SUV promises the performance of a V6 engine while getting better mileage than any car in the Ford fleet. Acceleration -- which inspired H. Piper 100 years ago -- is another advantage. Electric motors develop the full power the instant they are turned on. This little fact allows electric drag-racers to dust their gas-powered competition at the strip. Formula One racing even banned hybrid power plants because they offered users an unfair advantage in acceleration.

Dodge and GM promise hybrid pickup trucks next year. The trucks' will double as generators for power tools and camping equipment thanks to electric systems and standard plug-ins built right into the side. Because auto emissions are regulated more tightly than the emissions of generators this could clean up the air at the job site as well. In case of a blackout, Dodge's "contractor special" truck can produce enough power to light up your home, and three of your neighbors as well.

Since hybrid systems often allow automakers to use a smaller engine and allow that engine to run much more efficiently, hybrid cars can make a major dent in climate altering carbon dioxide emissions.

One selling point of hybrid cars is that you don't have to plug them in like other electric cars. In fact they require no change in how you drive or fill up your car -- the only difference you experience is that you don't have to stop for gas as often.

However, the downside is you still have to stop for gas, and your engine still pollutes the air and climate (although at much reduced rates).

Some engineers has suggested that a hybrid that can be plugged in at night could go for the better part of a week without the gasoline engine ever starting up. This would be almost like having an electric car with a gasoline engine back-up for long trips or highway driving. Such plug-in hybrid cars would have another advantage -- today electricity is cheaper than gasoline -- and in most areas of the country, cleaner too.

Finally, future plug-in hybrids could actually feed power into the grid when needed.

In fact hybrids potentially have enough advantages to make some people question why there is so much talk about fuel cell vehicles. In truth however, hybrids are paving the way for the fuel cell vehicles that are just around the corner.

FUEL CELLS

The fuel cell is an old and in some ways simple technology based on chemistry rather than combustion. Hydrogen likes to combine with oxygen atoms to make water. Fuel cells take advantage of this, putting a screen between the two elements that draws electric power from this reaction. The fuel is hydrogen mixed with oxygen from the air. The only emission is water pure enough to drink.

They were invented by an English lawyer William Robert Grove way back in 1843. Grove figured out that if electricity could be used to separate water into hydrogen and oxygen (as was discovered in 1800) then water and oxygen might be combined to create electricity and water. Grove's invention was called the 'gas battery' but later came to be known as the fuel cell. Fuel cell research continued throughout the 1800s, but soon lost favor to steam and fossil fuels.

It wasn't until the 1960s that fuel cells found their first application in transportation, but it was a pretty high profile job. Fuel cells provided all the power and water for the astronauts who went to the moon. Not a bad thing to have on your resume.

Yet when Geoffrey Ballard came across the fuel cell technology in the 1970s, it was proven but expensive and bulky -- so much so that General Electric had let it's patents expire. He was looking for a better battery design, but he and his team of fuel cell pioneers soon realized that they had something much more significant on their hands.

Ballard took the fuel cell from an exotic and expensive engineering oddity to a practical alternative to fossil fuel power generation. Ballard fuel cells power buses and buildings today. The company he founded -- Ballard Fuel Cells -- is still based in British Columbia. In fact, the company has grown into a world leader -- as some say, the Intel of the 21st century power.

The fuel cell is the "missing link" in the hydrogen economy.

As a fuel, hydrogen seems almost too good to be true. Take the most plentiful stuff in the universe and combine it with oxygen. A fuel cell membrane captures the energy of the reaction and the only byproduct is water -- clean enough to drink.

Many folks think that hydrogen is the future.

But there's a catch. Hydrogen isn't really a fuel so much as a carrier of energy. It is only as clean as the source of energy it carries. Hydrogen likes to bond with other atoms, so it takes energy to split off the hydrogen atoms. Making hydrogen with coal and oil is just putting a green face on dirty energy. Much better if we make use hydrogen to store energy from renewable sources of power like wind and solar.

Then there's the question of what we make the hydrogen from. Water is the most elegant solution since the only product out of the tailpipe is clean water. However, it takes a lot more energy to split hydrogen out of water than other sources, including natural gas. Currently two thirds of the hydrogen we use comes from natural gas. Yet when you extract hydrogen from natural gas you are left with carbon.

What to do?

One solution is to make the hydrogen right at a natural gas wellhead, then pump the carbon back into the ground where it belongs.

Another problem is distribution. Shipping hydrogen is tricky because it has a low density. The result is that it would take twenty-one trucks to deliver enough hydrogen to equal one truck of gasoline. Given that, does it really make sense to ship the stuff in from Iceland?

A better solution is to find or create nontoxic, recyclable fuels that carry hydrogen atoms. This allows you to produce hydrogen on-the-fly. Split off hydrogen from these liquids just before use in the fuel cell or engine is called onboard reforming and it can be done with gasoline. The trouble is making the reformer small enough and efficient enough. Many companies are working to produce "clean hydrocarbon fuels" that carry enough hydrogen to run a fuel cell.

One promising example powers Chrysler's Natrium minivan. Sodium borohydride -- basically borax soap and hydrogen -- is stable, holds lots of hydrogen, and is nontoxic. The vehicle looks just like the millions of Chrysler minivans on the road and has a range of 300 miles.

Of course another solution is to produce hydrogen locally, thus eliminating the need to ship it all over the place. Shipping fuel is an inefficient part of our current energy system anyway.

Luckily there are all sorts of things that can be made into hydrogen. In fact a new project in King County will produce electricity from hydrogen harvested from the sewer plant.

The barriers to hydrogen fuel cell energy boil down to the cost of the equipment and solving the problems of how to make and distribute the hydrogen. Hydrogen cars are already on the road and being tested in California and Washington D.C. and public hydrogen refueling stations have even been set up in a few places, but thus far the cost of making these vehicles is still too high for the consumer market.

Where fuel cells are finding a market is in back-up power supplies for buildings. Homes and hospitals that are located too far from reliable sources of electricity are using commercially available hydrogen fuel cells to meet their needs. These generators are silent, reliable (since they have no moving parts) nonpolluting and can produce heat as well as electricity.

In fact you can buy a fuel cell for your home. Coleman -- the maker of camping equipment -- sells a PowerMate fuel cell that can fit under the desk in your home office.

Most of these systems run on widely available natural gas or methanol, which is expected to act as a transitional source of power until hydrogen is more readily available.

The drawbacks of hydrogen may make an economy based solely upon its use unrealistic until renewable energy becomes much more plentiful.

But why would we want to trade one energy monoculture -- fossil fuels -- for another anyway?

The future lies in communities meeting their energy needs with abundant and renewable sources that are available in our own backyards.

SectionZ #2 Home