Nuclear, Oil, and the Two Worlds of Energy

Have you heard that all big energy sources entail risk? I can’t count the number of times in the last few days that I’ve heard some variation on the following: “Yes, nuclear involves risk. But so does oil: Don’t you remember the BP disaster just last year?”

Pause for a moment and think about that. For more than a month, people have been following developments in the Middle East with rapt attention, not only because of the inspiring potential for political change, but because of the clear consequences for oil, and hence for the U.S. economy. When President Obama took to the airwaves last Friday, it was not to encourage change in Libya or reform in Bahrain – it was to tell the American people that he was monitoring their gasoline prices and would take all necessary steps to protect them. When Saudi Arabia suppressed protests last week, it might have been a moment for mourning; instead, most Americans looked at the price of oil and breathed a sigh of relief.

So why on earth do we reflexively turn to the Gulf oil spill when we want an example of oil-related risk? My hunch is that the nuclear situation sends us into an “environment” and “public safety” world; the Middle East situation, in contrast, fits in the worlds of “economics” and “security”. We seem incapable of thinking about both at the same time.

Part of the reason for that, I’d guess, is that many peoples’ concerns – and most experts’ expertise – doesn’t span all the areas that ultimately matter. If you care passionately about the environment, you’re probably not an aficionado of Middle East politics; if you’re focused like a laser on macroeconomics, you’re probably don’t spend that much time thinking about the environmental risks of fracking.

It doesn’t help that we don’t have good analytical tools to make judgments that cut across multiple dimensions of energy risk. My 2009 study on the Canadian oil sands attempted to develop one framework; many responses predictably ignored one of the two dimensions I was looking at.

This may be the natural state of affairs, but it is an awful foundation for making coherent energy policy. Until we can think about security, economics, and environmental risk at the same time, we’re going to have a lot of trouble developing an energy policy that makes sense.