Why America can’t afford an ‘all of the above’ energy policy

It’s a reliable tell: Politicians and pundits who want to sound like boosters of clean, safe, renewable energy, while clinging to dirty, dangerous energy sources like fossil fuels and nuclear power, will cover their assets by spouting support for “all of the above.”

“All of the above” apparently originated with Big Oil lobbyists at the American Petroleum Institute more than 20 years ago, when the nascent renewable energy industry began to challenge coal and oil. Now, with the cost of renewables plummeting; smart investors, industries and utilities embracing clean energy; and President Biden pledging to cut carbon emissions in half by 2030, the all-of-the-above gang is at it again.

But under their spin about diversification, bridge fuels and the limits of renewables lies a plain fact: We can’t afford it.

An all-of-the-above energy strategy is a money sink that will drain incalculable hundreds of billions of dollars from taxpayers, utility ratepayers and other consumers. What’s more, the climate impacts of not going all in on clean energy – hurricanes, flooded coastal cities, drought, wildfire, killer heat waves, lower crop yields and more – could cost the U.S. economy nearly $2 trillion a year by 2050, according to the global insurance giant Swiss Re.

The centerpiece of the all-of-the-above strategy for the fossil fuel industry is carbon capture technology, whether affixed to coal or natural gas plants, to stop carbon dioxide from polluting the atmosphere, or through removing carbon dioxide directly from the air. But whether the captured carbon is used to produce more fuels or stored underground – processes collectively known as carbon capture utilization and sequestration, or CCUS – the still-unproven technology cannot be developed or operated without heavy subsidies from taxpayers and ratepayers.

That’s already the story with nuclear power. The seven-decade history of the U.S. nuclear industry is a tale of hundreds of billions in federal subsidies and state bailouts, huge cost overruns passed on to utility ratepayers, and hundreds of taxpayer millions a year to store radioactive waste. The industry’s current fantasy is development of a new generation of supposedly cheaper and safer “advanced” modular reactors, which predictably has already been set back by cost overruns.

Those who tout CCUS or “advanced” nuclear as a way to keep using these outdated energy sources are turning a blind eye to clear market signals. Coal is no longer needed and is too expensive to provide electric power, natural gas is headed for the same fate and nuclear reactors routinely cost billions more to build and keep running than projected.

With or without the unproven future technologies boosters claim will make them viable, fossil fuels and nuclear power are on a parallel course with inevitable endpoints:

  • They will be unable to compete on the open market with combinations of renewables, battery storage, energy efficiency and other clean energy resources.
  • Implementation of CCUS and “advanced” nuclear will be too late, if somehow successful at all, to do anything about the climate emergency.
  • Pursuing them will place heavy financial burdens on ratepayers and taxpayers. 

Existing economics of fossil fuels and nuclear


The market, and utility companies smart enough to see the future, have essentially abandoned coal. Undercut first by a glut of natural gas and more recently by ever-cheaper renewables, coal now supplies less than a fifth of U.S. power. Morgan Stanley expects coal to disappear from the electric grid by 2033.

Since 2008, about one-third of U.S. coal plants have shut down. Because those remaining are increasingly unnecessary for maintaining electric system reliability, utilities are using them less and less. In 2011, the average U.S. coal plant ran at nearly 70 percent of its rated capacity, but according to the Energy Information Administration, coal plants’ output now averages just 40 percent of capacity. When coal plants run at reduced capacity, the cost to operate them increases, leading to further plant closures.

And coal’s decline will continue. A recent report by the non-partisan research firm Energy Innovation finds that 80 percent of the U.S. coal fleet is either uneconomic to operate or slated for closure. This is good news for ratepayers, because keeping them running comes with substantial costs:

  • Northern Indiana Service Company found that closing its coal plants and replacing them with wind, solar and battery storage would save ratepayers $4 billion over 30 years.
  • A 2019 Strategen analysis said that closing all 10 Colorado coal plants would save customers nearly $1.7 billion using wind instead, and $1.4 billion using solar.
  • The Union of Concerned Scientists reports that in 2018, ratepayers in 15 states paid a premium of $350 million because of utilities’ running uneconomic coal plants when cheaper generation was available.
  • The Ohio Legislative Service Commission estimated the annual cost to ratepayers for bailing out two uneconomic coal plants would be nearly $260 million.

 Natural gas

The fracking boom of the past decade produced a glut of cheap natural gas, sparking an almost 25 percent increase in the use of gas-fired power. But that’s changing rapidly as the cost of renewables and storage batteries plummets. Utility-scale wind and solar costs have declined by 90 and 70 percent, respectively, over the past decade, according to Lazard, and the cost of batteries by 89 percent, according to the American Clean Power Association.

Despite the recent run-up in natural gas capacity, utilization rates for the larger gas plants are, on average, under 60 percent, less than for coal in 2010. Analysts at RethinkX project further sharp declines as wind, solar and battery costs continue to drop, resulting in an average utilization rate of just 10 percent for natural gas plants by 2035.

As with coal plants, as the use of natural gas plants declines, they become more expensive to operate. But because state regulators guarantee monopoly utilities’ return on investment in big capital projects, some short-sighted power companies are pressing ahead with plans to build more gas plants.

That’s bad news for their customers: A 2019 analysis by Rocky Mountain Institute found ratepayers would be saddled with nearly $30 billion in excess costs if planned natural gas plants are built out, because clean energy would be cheaper.


From 1948 to 2018, nuclear power received nearly $110 billion in taxpayer funds for research and development. Despite the industry’s hype that new designs will bring down costs, nuclear power continues to be a money pit.  

A conservative estimate of excess ratepayer and taxpayer costs from nuclear cancellations, cost overruns and bailouts since 1972 is well over $350 billion.

Estimated excess costs of nuclear power in the U.S. since 1972

Excess costs from cancellations 1972-1984 $40 to $50 billion
Cost overruns (1972-1984) $150 billion
State-level deregulation bailout (late-1990s to mid-2000s) $110 billion
Cost overruns (2005 to present) $54 billion
State bailouts (ongoing) $14 billion*
Total $368–$378 billion

Source: EWG, from linked Union of Concerned Scientists report, news articles and regulatory filings

The only new nuclear reactors now under construction received $12 billion in federal loan guarantees, but they are five years behind schedule, with costs double the original estimate and continued delays costing ratepayers $25 million per month. Taxpayers are also doling out $500 million annually for storage of the nuclear industry’s toxic high-level nuclear waste. State bailouts cost ratepayers $30 to as much as $90 per year, depending on the state.

The false promise of future technologies

Carbon capture would capture taxpayers’ and ratepayers’ money

From 2010 through 2018, the Department of Energy, or DOE, funneled $5 billion in taxpayer dollars into the research and development of carbon capture. More than 60 percent of the money went to carbon capture at coal plants. The sum doesn’t include the $3.4 billion thrown at the technology in the 2009 stimulus package.

In 2008, Congress adopted a tax credit of $20 per ton of CO2 captured and sequestered and $10 per ton for using CO2 to force more oil out of the ground, a process known as enhanced oil recovery. In 2018, the credit rose to $50 per ton sequestered and $35 per ton for enhanced oil recovery. Both subsidies will increase with inflation. Even after a decade of the tax credit, plus the nearly $10 billion in research and development funding, and pilot and demonstration projects since the 1970s, the Congressional Research Service concluded that CCUS still costs too much to be deployed commercially. 

But some members of Congress want to keep running up the tab.

In March, lawmakers led by Sen. Tina Smith of Minnesota introduced a bill to increase the credit for CO2 stored underground to $150 per ton and for enhanced oil recovery to $75 per ton, adjusted for inflation. In December, Rep. Mark Veasey of Texas introduced the SCALE Act, proposing to spend about $5 billion in the next five years for transportation and storage of CO2 for use in fuels.

Those costs would still be a drop in the bucket.

A 2017 DOE report estimated transporting 100 million tons of highly pressurized CO2 would require construction of 1,000 miles of pipeline by 2030. Using the American Petroleum Institute’s 2017 estimate for the average cost of natural gas pipelines – about $5.3 million per mile – with the Environmental Protection Agency's 2018 average cost estimate for CO2 pipelines, which is about 3 percent higher, the cost of a 1,000-mile CO2 pipeline infrastructure would be in the range of $55 billion or more.

A recent study by researchers at the University of California at San Diego, Carleton University in Ottawa, Imperial College of London and the Brookings Institution finds that, worldwide, more than 80 percent of carbon capture and sequestration projects have been cancelled, with construction costs and weak revenue projections the leading factors. The researchers conclude that those obstacles can only be overcome with more subsidies, tax credits and other financial incentives.

Direct air capture, or DAC – sucking CO2 from the atmosphere, independently from a coal or gas plant – would also be cost-prohibitive.

In 2019, Energy Innovation said that although the estimated cost of removing a ton of CO2 has dropped in the past decade, it remains “a massive and costly undertaking,” and unless world governments enact a high price on carbon emissions, “a market to motivate deployment of DAC at the scale needed will not develop.”

“Fundamentally,” Energy Innovation said, “to avoid putting a molecule of CO2 into the air . . .  [by] switching from fossil fuels to wind or solar is far easier than getting that molecule back out.” 

Carbon capture’s impact on coal plant costs

The first attempt in the U.S. to showcase a large-scale carbon capture project at a coal plant was an expensive failure. When the Petra Nova coal plant, near Houston, opened in 2017, it was one of only two CCUS power plants in the world. It cost $1 billion, and the captured CO2 was used to extract oil. But when global oil demand tanked, so did the market for Petro Nova’s CO2, and the carbon capture system was mothballed in July 2020.

Oil demand continues to drop. Nonetheless, a CCUS project more than three times the size of Petro Nova is under consideration in New Mexico.

The San Juan Generating Station is scheduled for closure in June 2022. Its operator, Public Service Company of New Mexico, found that the most cost-effective option would be replacing the units at the plant with solar, wind, battery storage and natural gas resources.

But the nearby city of Farmington, hoping to avert the loss of coal jobs, wants to take over the plant, turn its operation over to a private company called Enchant and retrofit it to be the largest CCUS coal plant in the world.

A report by the Institute for Energy Economics and Financial Analysis, or IEEFA, estimates that the project – excluding basic, significant costs like land acquisition ­– could cost up to more than twice the initial estimate of about $1.3 billion. Calculated on the cost of producing a kilowatt of electricity, the Petra Nova project’s tab more than triples the developers’ estimates.

To make enough money through selling CO2 for oil recovery and to qualify for the federal tax credit, San Juan must have a high utilization rate. IEEFA notes the developers assume an 85 percent capacity factor. But in 2019, the units to be retrofitted fell to less than 50 percent utilization.  

In addition, IEEFA estimates the costs for transporting the CO2 via pipelines will be nearly the same as the price for the CO2 used for oil recovery, further eroding the economics of the project.

“Little more than unfounded conjecture is behind Enchant’s assertion that it can expand and improve on the questionable performance of the much smaller Petra Nova carbon capture project in Texas,” IEEFA said, calling the project “dead on arrival.”

Carbon capture’s impact on natural gas plant costs

Clearly, the economics of natural gas generation will continue to deteriorate as the cost of renewable energy drops and the use of renewables grows. Adding carbon capture equipment will only make things worse.

A 2020 study by the School of Sustainable Engineering and Built Environment at the University of Arizona estimated that affixing carbon capture equipment to a natural gas plant would increase the cost about 60 percent. That would make those retrofitted gas plants as expensive to operate as existing coal plants, according to analysts at Lazard.   

Utilization rates for natural gas plants are already reaching a point where carbon capture isn’t financially viable. A 2018 study by the Carnegie Mellon Tepper School of Business found that more than 60 percent of almost 500 natural gas plants analyzed in 40 states had capacity factors below 50 percent. Unsubsidized solar plus storage in some parts of the country is already competitive with gas plants, with below 50 percent utilization rates.

The only way to improve the economics of natural gas with carbon capture would be to shift almost the entirety of the fossil fuel industry’s business risk to the public – by making ratepayers pay as the plants are constructed, restricting renewables’ output to let gas plants run longer, and increasing subsidies.

The think tank RethinkX believes natural gas plant utilization rates will continue to decline. And, in its 2035 report, the Goldman School of Public Policy at the University of California, Berkeley shows we can reach 90 percent clean energy by 2035 by ramping up renewables and storage, keeping nuclear generation the same, increasing energy efficiency investments, and ratcheting down natural gas use to 10 percent of total national power generation, rather than adding to its capacity. 

Carbon capture for new natural gas plants is even more challenging financially:

  • RethinkX calculates that the lifetime cost of new natural gas plants is actually 60 percent higher than DOE estimates. And the gap will widen as renewable and energy storage costs decline, with lifecycle costs for new natural gas plants increasing fivefold by 2030.
  • An analysis performed by the Center for International Environmental Law found that adding carbon capture to a combined-cycle natural gas plant could increase the lifetime cost by more than 60 percent.
  • Adding the additional cost of RethinkX’s analysis to new natural gas plants would increase the lifecycle cost for power plants coming online this year to almost three times that of solar and 2.5 times that of wind.  

“Advanced” and modular nuclear technology

So-called modular nuclear technology is plagued by the same financial barriers as large units, according to an article by Arjun Makhijani and R.V. Ramana for EWG. Makhijani, president of the Institute for Energy and Environmental Research, and Ramana, a professor at the School of Public Policy and Global Affairs at the University of British Columbia, wrote that the only modular nuclear design viable to deploy in the next decade has already experienced $3 billion in cost overruns just in the development stage, with more budget-busting likely, and the delay of the first pilot project until at least 2030.

Proponents of the technology point out that the size and ability of these units to mass produce smaller units will exceed their lack of economies of scale. But, Makahajani and Ramana say, this creates a chicken-and-egg scenario – no mass manufacturing supply chain without mass orders, but no mass orders without a supply chain. Even then, developers will have to design facilities with multiple units to reach economies of scale, increasing the cost of the project. 

The difficulty in jumpstarting a modular nuclear market is a focus of a 2018 Carnegie Mellon University Department of Engineering and Public Policy analysis published by the Proceedings of the National Academy of Sciences. The authors find that there will not be much of a market for modular units, saying it would require several hundred billion dollars in subsidies just to breathe commercial life into the technology. 

The experience globally isn’t positive, either.

A few modular units are operating or under construction in Russia, China and Argentina. However, they all have substantial cost overruns. Of 26 current modular nuclear projects listed globally by the Nuclear Energy Agency of the Organisation of Economic Cooperation and Development, three are under construction – two in China and a very small one in Argentina that has been under construction since 2014. Most of the others are in the design stage.

“Advanced” nuclear designs are in the same financial vise. The 2018 analysis by the Proceedings of the National Academy of Sciences concluded that no new designs could possibly reach the market before midcentury. According to a report in the Bulletin of the Atomic Scientists, worldwide, so-called breeder reactors have received $100 billion in public development funds over six decades but have never gotten off the ground.

The bottom line

All-of-the-above is not a realistic strategy to decarbonize the economy but a scheme to sustain the use of costly, dirty and dangerous fossil fuels and nuclear power at a very high cost to taxpayers and ratepayers. The billions that would be spent developing unproven technologies such as CCUS and “advanced” modular nuclear reactors, with no guarantee of success, would divert resources from the clean, renewable energy solutions that we know will work – because they’re already working.

The most viable option, with the least risk to ratepayer and taxpayer finances and the environment, is to quickly phase out coal plants while steadily reducing output from natural gas plants until they can be fully replaced by clean energy resources, concurrent with or followed by the phaseout of existing nuclear power capacity.

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