LET LANTERN LIGHT THE WAY

ENERGY EDUCATION: A CALL TO ACTION

Energy Inflation

home energy improvement Energy inflation has become a front burner issue for small business and residential property owners throughout the northeast and the nation as a whole. The sudden spike in energy cost during the summer of ’08 has exposed how vulnerable we all are to circumstances beyond our control. The unpredictable and rapid acceleration in the cost of energy requires us to take action today in order to stem this tide. Business and homeowners are facing an energy crisis unlike any they have faced in the past; this one is here to stay.

Electricity:

Demand for electricity is expected to grow 29% by 2030, much of it driven by residential growth according to recent reports by the Energy Information Administration the statistical agency of the US Department of Energy. This growth is expected while the level of excess capacity has shrunk in the last few years to a level barely within the planning toleration of the industry. Excess capacity within the system is a hedge against problems. Construction, as well as plans for new plants, has slowed as costs to build and operate them have soared. The State and Federal government along with the utilities have all realized that it is far less costly to invest in demand side management than to build expensive (not in my backyard) power plants. The state legislatures have passed public acts to establish several initiatives and programs to significantly reduce electric power supply costs caused by inadequate transmission and generation in our power infrastructure. These initiatives are an important catalyst by providing resources to homes and businesses for energy efficiency projects. While offering an impressive four to one return on investment these funds are often cut or raided by state officials, however given the escalating cost of electricity and its continued projected rise, the return on an investment in efficiency requires no subsidy.

Cheap Oil:

The cost to extract a barrel of oil from the earth has been increasing steadily since the 1940’s. The Energy Profit Ratio (EPR) is the ratio of energy output to input. For example, the EPR of oil in the 1940’s was 100:1, which means that it would require one barrel of oil (energy equivalent) to discover, extract, refine and transport 100 barrels to market. The current EPR for oil of 15:1 now requires one barrel of oil to deliver 15 barrels meaning far less available fuel; some studies show this ratio closer to 10:1. This is one of the most effective tools used to compare differing sources of energy and measure the direction of profitability. For example the EPR for corn based ethanol is 1.35:1, while politically popular not a realistic alternative. The following is the EPR of some of the more commonly known energy sources:

Oil	15:1
Oil Canadian tar sands	7:1 to 13:1
Natural Gas	10:1
Hydropower	11:1
Methanol	2.5:1
Corn Ethanol	1.35:1
Coal	10:1
Nuclear	4:1
Solar photovoltaic	5:1 to 10:1
Wind	50:1

It can not be overstated the effect that cheap oil has had on the formation of society as we know it today. As the EPR decreases, industrial societies will have to find a way of working on the basis of using vastly less energy per capita than we’ve become accustomed to; this is especially true in the oil dependent northeast. We each have our own reasons for pursuing energy efficiency whether concern for global warming, geo-political instability, energy independence, all good reasons but it’s the economic express train that hits very close to home. The fact is a tipping point has occurred on the supply side resulting in a monetary impact on homes and businesses far greater and much quicker than we expected. The new reality of heating oil approaching $5/gallon and deregulated electricity rising every year lays the foundation for efficiency, conservation and alternative energy.