The question arises: What is the true cost of petroleum?

On the surface this question seems readily answerable, rather simplistic and naive. However, a more in-depth look reveals many hidden costs not included in the daily commodity price quotes.

Excluded are the entire life cycle and financial costs of the commodity. Outside of carbon credits and the implications of the proposed cap-and-trade program, other underlying costs may include the short- and long-term impact on the environment and the contribution to the trade deficit. The financial ramifications of the national debt and the rapid decline in foreign investment in U.S. Treasury bills are most likely excluded from the commodity's price. Let's not forget the added health-care costs due to environmental pollution and climatic changes.

Furthermore, there are the costs to protect our overseas oil supply lines by the Department of Defense and the tendency of "the power of oil" to adversely alter the economies and politics of the petroleum producing countries, some of them petro-oligarchs with regimes, which may conflict with U.S. interests. Once these factors are taken into consideration, the true cost of developing and commercializing many renewable energy technologies becomes highly favorable and economically justifiable.

In closing, with all these unaccounted costs included, it would be nice to know "what is the real price we should pay for petroleum."

Barry Stevens, PhD, is the Managing Director of TBD America, Inc.

To read Mr Stevens' blog, click here.