ABSTRACT
In producing and using energy, tradeoffs can be made between the monetary (internalized) costs, the environmental and other external costs, and the security of supplies from unanticipated interruption. For example, the security of American energy supplies can be increased by relying more heavily on higher cost domestic sources. Similarly, environmentally cleaner energy is possible, if the United States is willing to pay more for its energy or to rely more extensively on less secure foreign supplies. At any particular time this tradeoff relationship (which can be conceived of as a surface in a three dimension diagram with monetary costs, environmental costs and other externalities, and security measured on the three axes) is fixed largely by state of technology, the quantity and quality of energy reserves available in the United States and abroad, and the prevailing political and economic institutions.
