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Real costs of extracting oil

June 1, 2010 - Jim Anderson
Is clean energy too expensive when compared to “cheap” oil?

Perhaps it still is.

The Gulf spill, however, is raising awareness of the true cost of cheap oil.

John Vidal, environment editor for the British newspaper The Guardian, says oil companies “are nervous now because the spotlight has been turned on their cavalier attitude to pollution and on the sheer incompetence of an industry that is used to calling the shots.”

The Gulf spill is drawing massive attention because it occurred so close to the U.S., Vidal notes.

On a global scale, the Gulf spill is hardly exceptional.

“There are more than 2,000 major spillage sites in the Niger delta that have never been cleaned up; there are vast areas of the Colombian, Ecuadorian and Peruvian Amazon that have been devastated by spillages, the dumping of toxic materials and blowouts,” Vidal writes (“The real cost of cheap oil,” May 27). “Rivers and wells in Venezuela, Angola, Chad, Gabon, Equatorial Guinea, Uganda and Sudan have been badly polluted.”

What the industry fears more than anything is being held fully accountable worldwide, Vidal says.

“The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil,” he continues.

Vidal asserts that if the oil industry were forced to really clean up its global messes, the switch to clean energy would be swift.

“If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world’s oil would almost certainly be left in the ground,” he writes.

There is a measure of wish in that conclusion, but its premise is undeniable. When comparing energy costs, the fact that there no solar spills needs to be part of the equation.

 
 

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