It was with great interest that I read the spring 2002 edition of Dickinson Magazine. While reviewing the five insightful essays about the world's future, I was struck by the absence of discussion about a crucial challenge that faces our nation and human civilization on the whole. This challenge is the economic availability of natural resources and the environmental impact associated with the consumption of these resources.

Background

The industrial revolution has had an enormous impact on the overall standard of living for humans across this planet. Americans enjoy all of the advantages of modern technology while most of us avoid the dangerous and arduous working conditions that dominated our lives less than a century ago. Much of this material progress can be attributed to the discovery and exploitation of inexpensive energy resources like coal, petroleum, natural gas and uranium.

Material advancement has not been achieved without negative environmental consequences. Currently, 90 percent of our nation's energy is provided by carbon-based fossil fuels. The North American landscape is scarred by 150 years of coal mining. Planetary water resources have been degraded by petroleum leaking from production and distribution networks. Acid rain and global warming threaten regional and planetary ecosystems. Nuclear waste and radiation security continue to be unresolved issues of enormous consequence. As world energy consumption continues to grow exponentially all of these environmental problems will become exacerbated.

Many economists point to the discovery and exploitation of inexpensive petroleum as the primary driving force behind the expansion of American economic power in the second half of the twentieth century. The United States has already consumed about 150 out of the 240 billion barrels of ultimate recoverable domestic oil. The current annual consumption rate in the U.S. is almost 7 billion barrels, which means that without imported oil we would run out of oil in less than 15 years. The estimated 3 billion barrels of oil at the focus of the Arctic Wildlife Refuge debate will do little to expand our nation’s petroleum resource.

Consequently, the United States has found itself extremely dependent on oil imports from around the globe. This presents problems where our political, moral and strategic interests may be in conflict with those leaders who control world oil. The attacks of Sept. 11 are a biting reminder of the potential impact of U.S. policies driven by our dependence on foreign oil.

The connections are clear. Iraq attacked Kuwait in 1990 to gain control over Kuwait’s enormous oil resource. Saudi Arabia invited U.S. troops to defend against further Iraqi aggression. It is the very presence of these American troops on Saudi land that instigated Osama bin Laden’s military assaults against the United States, culminating in the attacks on the World Trade Center.

Opportunities and barriers

Those of us who study energy resources and policy often express a cautious optimism about the future. Ultimate scarcity of nonrenewable resources and impending environmental crises are ominous realities. However, there are great opportunities to break away from dependence on highly polluting fossil and nuclear fuels, and to become independent of imported oil.

Efficiency gains in utilization technologies can extend domestic resources. If the average automobile fuel efficiency in the U.S. were to increase to 30 miles per gallon, oil consumption would decrease by 25 percent. Energy conservation may become more attractive as fuel prices increase over time. Ride sharing and expanded public transportation could decrease oil consumption by another 20 percent.

If the price of gasoline were to reach $2.50 per gallon, there would be enough profit in ethanol production to expand output to as much as 2 billion barrels annually in as few as five years. If the price of gasoline were to reach $3.50 per gallon, hydrogen-powered fuel-cell cars could compete economically.

Technical advances in solar and wind technologies may allow these resources to compete with coal and nuclear fission in the electricity market, for both grid-based power and future hydrogen production. This depends, in part, on our nation’s willingness to remove the economic subsidies that allow electricity from these conventional resources to remain artificially underpriced.

If the U.S. were to sign on to the Kyoto global warming agreements, the ensuing carbon limitations would likely lead to a doubling of coal prices. This higher price would accurately reflect the externality costs of coal, currently born by health care costs and losses in productivity from pollution. However, consumers and producers have resisted paying the complete bill from fossil fuel consumption, choosing instead to “dump” these costs on the common environment.

As for nuclear energy, the Price Anderson Act legislates that owners of nuclear power plants are only financially responsible for the first $8 billion worth of legal liability claims in the case of an “incident.” American taxpayers would finance any additional monetary claims. This results in electricity prices that do not reflect the true costs of financial risk, since producers and consumers of nuclear electricity need not indemnify for financial risk above the liability limit.

Conclusion

There is great potential for our nation to meet the environmental and resource challenges posed by the 21st century. In most cases engineers have already developed the technologies required to provide for a clean and self-sufficient energy future. It is personal and political will that poses the greatest obstacles for securing a safe and healthy future.

Fifty years from now our economy will no longer be dominated by carbon based fuels. An energy economy based on biomass fuels and hydrogen gas will propel our cars and power our homes. Will the transition to tomorrow’s energy economy be smooth? Or, will the transition be marked by economic and military crises. Will our physical environment improve over time, or will more of the world’s people face environmental catastrophes that threaten their very existence.
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In this country, politicians supporting liberal or conservative ideologies have long debated the role of government in matters concerning individual behavior. However, with the exception of some fringe ideologists, Americans have totally embraced the principle of private property. Defense of private property rights requires that all citizens and corporations take responsibility for behavior that causes damage to another’s property. For example, every dog owner is responsible for the mess that their dog may leave on another person’s property. As long as our nation’s laws and policies ignore the global environmental impacts of our energy consumption, we are violating the principles of private property.

Our nation is allowing its dog to mess on the world’s lawn, while refusing to pay for the pooper-scooper. Growing dependence on foreign oil requires larger allocations of resources towards military investment, and increases the chances that our children will have to go to war over energy resources. We hold the technological keys to solve our resource dilemmas. The question is, as a society, do we have the foresight and will to prepare ourselves for a new century of health, safety and prosperity.

Dr. Richard Shaten ’82 is a member of the economics faculty at Madison Area Technical College. He coordinates the graduate program in Energy Analysis & Policy at the University of Wisconsin–Madison, where he teaches Energy Resources and Energy Economics.
Richard graduated Phi Beta Kappa from Dickinson with a B.A. in Western social & political thought and a minor in music. He received his Ph.D. in land resources from the University of Wisconsin - Madison, where he also earned master’s degrees in agriculture & applied economics, civil & environmental engineering and energy analysis & policy.

Richard lives in Madison, Wis. with wife Bonnie and children Sara, 9, and Michael, 3. He produces a call-in talk-radio show, Ask the Energy Doctor, and is finishing a book with the same title. You can contact Richard through his Web site: http://www.asktheenergydoctor.com