Centralized distribution of energy is the "coin of the realm" around th world. In the United States, these various energy generators (central distributors) average 29% efficiency (FERC, 2000). Let us examine the 29% number in a realistic petroleum example. OPEC ships 1,000,000 million gallons of crude by tanker to the U.S. The tanker burns 5% (actual) of its cargo for fuel. The deferred cost of abating the pollution caused by this 5% is ignored. The U.S. receives 950,000 gallons for fuel at a Con Ed electricity generating facility in New York. The plant converts the fuel to electricity at 29% efficiency, producing the equivalent electric power of 275,500 gallons of the original fuel. The deferred costs of abating the pollution caused by the lost 674,500 gallons, 67.45% of the original 1,000,000 gallons, which went up the smokestack is ignored. The electrical distribution network (high wires, transmission lines) historically has required 5 kilowatts input to deliver 4 kilowatts output, which translates to a 20% loss. The heat loss by the transmission lines may be or may not be a pollutant, so the deferred cost would be minimal. The 275,500 gallons of power generated by Con Ed is reduced in actual use to 220,400 gallons at the end user.

The problem is that we have converted 1,000,000 gallons of usable energy to 220,400 gallons of usable energy. Simultaneously the centralized distribution system has been able to ignore the deferred cost of cleanup of the 779,600 gallons used to produce pollution. The central distributors are allowed to charge users handsomely for their own inefficiencies. The central distributors also become the tax collectors for governments, which make the governments de facto partners of the central distributors. The resistance to change, inertia, created by this partnership is the probable cause for its longevity. Even the simple-minded can relate to these numbers and facts. At this point, all deferred costs (pollution) are the burden of the taxpayers. Global warming is about heat, but we are talking about more than just heat.