Security of supply: a neglected fossil fuel externality

Various groups have attempted to set a monetary value on the externalities of fossil fuel usage based on damages caused by emissions of particulates, sulfur dioxide, and oxides of nitrogen and carbon. One externality that has been neglected in this type of analysis, however, is the cost of maintaining a secure supply of fossil fuels. Military expenditures for this purpose are relatively easy to quantify based on US Department of Defense and Office of Management and Budget figures, and amount to between $1 and more than $3 per million Btu, based on total fossil fuel consumption in the US. Open acknowledgment of such expenses would, at the very least, have a profound effect on the perceived competitiveness of all non-fossil fuel technologies. It should also provide a simple and easily comprehended rationale for an energy content (Btu) charge on all fossil fuels. (Author)