20060421
    The US is in an energy bind, and unfortunately it is a bind that was completely preventable with a little foresight. The bind is the fact that massive amounts of the US energy need is fulfilled by the byproducts of crude oil refining, and crude oil has entered a period of sustained volatility for a variety of reasons.
    This energy bind is not the result of a shortage. Indeed, the world is decades or even centuries away from a global shortage of oil as exploration and extraction technologies will allow more and more remote and inaccessible sources of crude to be exploited. Instead, the issue is demand. The US is by far the largest single consumer of crude oil byproducts, yet the supply has not increased to meet the demand of the US and the burgeoning economies of nations like China.
    The result is a volatile supply system that will push oil prices ever higher as the demand increases, and this is where the shortsightedness comes into play. Since 1973, the US has had a clear idea of the effect that oil supply volatility has on the economy and eventually the overall quality of life, yet instead of researching and investing in alternatives to oil energy, the US has increased its reliance of oil energy.
    Now that reliance is revealed for what it really is. There is no doubt that the cost of gasoline will surpass and remain above $3.00 per gallon sometime in the next year. Home heating costs will be higher by double digit percentages this next winter than this past winter. Electricity prices will continue to rise as the cost of generating energy continues to rise. And all of this because of shortsightedness.
    There is, however, still time to reverse this trend, and such a reversal is simple and does not actually require the investment of billions of dollars into research. Instead, those same billions could be invested into incentives by states and the federal government to encourage consumers to embrace existing alternative energy technologies.
    Consider what would happen if every house in a typical suburban neighborhood installed a single 1KW solar panel and its associated hardware. Such a panel will likely cost a consumer roughly $2000 to install, and would likely account for only about 10% of the household’s energy usage. Yet, when multiplied by 100 houses all doing the same thing, such an installation becomes the equivalent of taking 10 houses off the grid.
The cost of such an initiative could easily be counteracted by smart tax policy that would allow consumers to claim such installations as a credit. Consider that, after the initial installation, the cost of installing additional panels drops geometrically, while the savings created by such an installation goes up accordingly. If a plan that allowed consumers to claim such a credit every two or three years were in place, by the end of a decade, large swaths of suburban America could have reduced its energy dependence by as much as half.
    Now, there are practical limitations to such a plan, but the end result would be a dramatic transition away from traditional sources of energy to new sources that are renewable and far less costly over the long term. This is a practical approach that would lessen the US reliance on crude oil, help moderate prices, and ensure the continued growth or the US economy for decades to come. The alternative, continued reliance, does not have the same promise attached.
DLH
It’s interesting that people are complaining about how expensive gas is recently (an investment of sorts when you purchase a vehicle), but I wonder how willing they would be to invest in those solar panels for their home use. Would they look past the initial “start-up fee” to see the long term benefits even when presented with the facts of how much they would save over time?
Makes me want to buy a motorcycle.
Not for the gas mileage, just for the excuse to drive really fast.
What better whay to kill two birds with one stone?
DLH