David R. Henderson  

Henderson on Epstein on Fossil Fuels

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How can a practical case also be a moral case? Simple: if one's standard of value is human life, as Epstein says his is, then whatever enhances human life is moral. There are some problems around the edges of his argument, but in a big-picture sense it holds up.

The best way to see that is to consider a true story he retells about Gambia, a tiny country in West Africa. In 2006, Kathryn Hall, founder of the energy charity Power Up Gambia, observed an emergency cesarean section in that country. The baby died only minutes after birth. The doctor explained that if he had had enough electric power, he would have been able to use an ultrasound machine and plan the C-section rather than do it as an emergency surgery. Hall also observed the birth of a full-term baby weighing only 3.5 pounds. In the United States, the infant would have been put in an incubator. But the hospital managers, knowing they did not have a reliable energy supply, did not bother wasting money on an incubator. The baby died.

This story drives home the importance of a stable energy supply. Our lives literally depend on it.

Of course, we could still live our lives with much less energy. It's just that our lives would be less full, we would be able to do fewer things, and we would be less wealthy. So it's not just our lives that are Epstein's standard, but a certain kind of life. Unfortunately he never makes that point explicit.


This is an excerpt from "Ethics and Energy," my basically positive review of Alex Epstein's book, The Moral Case for Fossil Fuels. Co-blogger Bryan Caplan was the person who first piqued my interest in the book with his posts here, here, here, here, and here.

Another excerpt from my review:

He reminds us that we need to judge various energy sources by the cost of all the resources used to produce energy. Sure, rays from the sun are free, but the various materials used to convert those rays into a usable energy form are very expensive, requiring many other materials per unit of energy produced. Referencing a U.S. Department of Energy report, he notes that such materials "can include highly purified silicon, phosphorus, boron, and compounds like titanium dioxide, cadmium telluride, and copper indium gallium selenide." The story for wind power is similar. He points out that generating one megawatt of electricity with wind power requires 542.3 tons of iron and steel, compared to only 5.2 tons to get the same amount of electricity using coal.

Moreover, both wind and solar energy are unreliable, for what should be obvious reasons: try getting solar energy at 8 PM in the winter or wind energy on a windless day. Epstein's critique is more devastating than this, but at least you get the flavor.


Final excerpt:
I'll close on a positive note. Epstein's last chapter is his best and should have been his first chapter. In it, he tells how he paid famous environmentalist Bill McKibben $10,000 to debate him. That alone impressed me. Epstein tells the story in such a dramatic way that it almost gave me chills. I recommend reading it first; you will likely then be motivated to read the rest of the book.


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COMMENTS (9 to date)
Russ Hooper writes:

I read The Moral Case earlier this year after reading Bryan's review and seeing some great YouTube videos of Epstein at a climate march.

As with you, David, I really enjoyed most of the book. I think Epstein's message is very clear and very important. My main complaint was that some of it seemed corny, in part because Epstein uses italics way too much.

Mark Bahner writes:
He points out that generating one megawatt of electricity with wind power requires 542.3 tons of iron and steel, compared to only 5.2 tons to get the same amount of electricity using coal.

That's not a proper way to assess their relative environmental impacts. The proper way is to look at the life cycle pollution emissions per unit of electricity. Coal has far more life cycle pollution per unit of energy than wind.

Life cycle conventional air pollutant emissions

Tim Worstall writes:

"Referencing a U.S. Department of Energy report, he notes that such materials "can include highly purified silicon, phosphorus, boron, and compounds like titanium dioxide, cadmium telluride, and copper indium gallium selenide.""

Well, yes, but none of those are really terribly expensive in the scheme of industrial minerals. OK, at times Indium can be $600 a kg but quantities used are pretty small. Same with tellurium, cheaper than that but again small qs used.

Phosphorous is $50 a tonne. Titanium dioxide $600 a tonne. Bulk commodities.

The biggest price change has come from pure silicon. A decade back it was $450 a kg. Today perhaps $30 a kg. Bulk demand led to research into better ways to make it. The biggest problem was actually in working out how not to make the 12 N (ie, 99.9999999999%) purity needed for computer chips but only the 6 or 8 N needed for solar.

None of this is to say that solar power is cheap, or doesn't require resources. Only that they're not particularly expensive resources.

David R. Henderson writes:

@Mark Bahner,
That's not a proper way to assess their relative environmental impacts.
I wasn’t claiming that it is. As I recall, I don’t think Epstein was either. He’s simply saying that you need to take account of resources required to translate wind into usable energy, and going after the simple-minded view that because the wind is just there, it’s easy to do

Tom DeMeo writes:

Professor Henderson - as an economist, I'm sure that if you were inclined to do so, you would note that the Gambian story makes no sense economically, and is the result of massive political and cultural failures. It has nothing to do with the cost effectiveness of electricity.

You could also note that fossil fuel based energy systems are built on supply chains of enormous scale and that they are highly vulnerable to (and often create) political instability. Political vulnerability is intrinsic to fossil fuel based energy. This makes it a useful tech for stable political systems, and highly problematic for unstable ones.

Nothing would help Gambia more than if markets were able to offer reliable energy systems based on short, independent supply chains. We haven't been able to depend on such chains so far because it has been prohibitively expensive to maintain stable power at a small scale. Recent breakthroughs in battery tech will provide the buffering necessary to achieve this goal in the next 5-10 years. This is what will keep the lights on at that Gambian hospital, not really cheap coal.

David R. Henderson writes:

@Tom DeMeo,
Good points. I don’t think they undercut Epstein’s point, which is that at its current margin, electricity in Gambia is high-cost and high-value, but, apparently, even that high value is not enough to overcome the high cost. You’re right that other changes would be needed to bring down the cost to below the value. I don’t disagree with you and I doubt that Epstein would either.
What he did was choose a dramatic way to show the value of reliable electricity.

michael pettengill writes:
Of course, we could still live our lives with much less energy. It's just that our lives would be less full, we would be able to do fewer things, and we would be less wealthy.

Yes, we can work less and ensure that everyone else works less.

The advocates of fossil fuel burning are advocating for fewer people working.

The reason the alternatives cost more than burning fossil fuels, and dumping mercury, lead, SOx, NOx et al into the air and water, and then leaving behind waste land like the pits near rivers filled with ash that contains heavy metals, as well as leaving behind wasteland from blowing the tops off mountains and into the valley is that fewer people are paid to pollute and generate electricity from coal.

To reduce the NOx and SOx emissions requires paying thousands of factory and construction workers plus a number of engineers to build a scrubber at a cost of typically one hundred million dollars. Divide by $50,000 and that gives you the number of man-years of labor that scrubber asset pays for. Then to operate it, dozens if not hundreds of workers must be paid to repair, supply it with raw materials, handle the sludge produced, etc.

To not leave the ash and sludge just sitting in a pit by the river all coal plants requires, either engineers need to be paid to develop products made from the ash, like bricks, then certify the process and bricks as not generating worse hazards. Then the factory must be build and debugged to produce the bricks which material scientists have demonstrated have superior strength in the lab. Or alternatively, workers are paid to build trucks and drivers paid to truck the ash to a waste disposal site that is engineered and operated by lots of workers, to landfill the ash safely for centuries to thousands of years.

And the coal mine can be restored to productive use by hundreds to thousands of workers saving the top soil before the surface mining, and then recontouring the mine into hill and valley, replace the top soil, replant and manage the site until the growth is well established to prevent rain washing away the soil and such, something that requires paying workers for perhaps a decade or two.

Of course, once all those things are done, electricity from coal is 50-100% higher in cost and lots of things are competitive or cheaper.

But the reason electricity from coal is cheap is its advocates are totally opposed to everything that creates jobs to produce the coal.

Creating jobs is easy. Mandate that coal plants comply with the spirit of the Clean Air and Water Acts back in 1970. The reason almost all the coal plants in operation today are 40 to 50 to 60 years old is that a new coal plant must comply with the Clean Air Acts requirement that it be built with the best available technology to prevent pollution. And building a replacement coal power plant that still emits thousands of tons of CO2 per day just requires paying hundreds of thousands of workers across the entire value chain, and that just "costs too much."

Its far cheaper to fight creating jobs and fight to pollute other people air and water and land.

But it becomes hard to hold onto your job and clean air and water in a global economy with everyone trying to not pay other people to work so its cheaper to live.

Daublin writes:

To Mark and David's discussion, it's worth hammering home that the economics can be unintuitive. Using simple examples is effective for that.

There's a larger fallacy I see all over the place that any form of reuse or recycling is always going to be an improvement. There's a lot of harmful policy in place that subsidizes recycling in areas where there were good reasons people were using the disposable alternative. Nobody who really had to manage their own resources would make these bad choices, but for the voting public, it only has to make sense for long enough that they check the right square on a ballot.

The reasons the disposable item has advantages will depend on what the item is. For glass, paper, and aluminum, the biggest issue is that a newly minted object is qualitatively better than a recycled item. For towels, kleenexes, and diapers, I don't think I need to describe the advantage of using a fresh disposable item versus a reusable cotton version of it.

Getting back to power sources, solar and wind have huge problems, including the overall capacity available to the entire planet, as well as the fact that they a fossil-fuel backup plant.

Nuclear energy, meanwhile, is extremely attractive if environmental concerns are what drive you....

Mark Bahner writes:
He’s simply saying that you need to take account of resources required to translate wind into usable energy, and going after the simple-minded view that because the wind is just there, it’s easy to do.

That's reasonable. But he chooses just one resource. A much better way is to look at life cycle resources...and even more importantly, life cycle costs, including costs due to negative externalities.

It looked to me (based on this excerpt...I haven't read the book) like Alex Epstein is trying to say, "Look, coal is wonderful and wind is bad...just look at the steel required."

But life-cycle analyses, despite being difficult to do, are a better way to attempt to compare different means of generating electricity.

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