- Three female fugitives wanted in New Jersey restaurant theft arrested in Illinois
- Man guilty in 2012 crash into home that injured 8-year-old
- McDonald’s: Federal complaint says company is joint employer
- T-Mobile settlement: $90M for cell phone bill cramming
- Shelter Care Ministries gets $30,000 grant
- Even more dead bees?
- Holiday travel: 98.6 million plan getaway, most on record
- Scam artists posing as utility reps, demanding payment
- Holiday mailing deadlines approach, Rockford Post Office warns
- Hispanics more than half of all renters, yet most are uninsured
Getting off the energy cost roller coaster
By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association
Our oil and gas energy industries, along with our political leaders, tell us that the U.S. will be the world’s largest oil producer and an exporter of natural gas. According to the oil and gas industry, fracking is providing us with energy security, low energy prices, economic growth and millions of jobs. Even President Barack Obama joined the chorus singing the praises of our 100-year supply of natural gas.
With gasoline prices close to $4 per gallon, Ralph Nader reminds us of the past when high energy prices led to congressional investigations and actions by state attorneys general and federal agency officials. Every 1-cent increase in the annual average price of gasoline takes more than $1.5 billion out of the pockets of consumers.
Deborah Rogers, a financial analyst experienced in investment banking, Wall Street and federal policy oversight believes we are being led into an energy price trap similar to our current oil situation. She identifies Wall Street as promoting the shale gas boom, driving prices below production costs so they could profit from the mergers, acquisitions and other transactional fees financing the shale gas frenzy. Speculators prefer price volatility, as it increases opportunities for large profits.
Utilities, owners of truck fleets and bus services and other gas consumers are attracted by low natural gas prices. A government official informed us that he remembers a few years ago when natural gas prices were $1.20 per therm and is enjoying the 40 cents per therm he is paying today. As the society invests in technologies to use the expanded cheap gas supplies, we will continue using them as prices climb.
Rogers reports that in March 2012, when natural gas was selling in the United States at $2.25 per MMbtu, China was paying $16 for the same volume. While natural gas prices are close to $3 today in the U.S., the price is still far below the $7 needed to make the wells profitable.
Rogers indicated when natural gas was at $2.25, it could be processed and shipped to China for a total cost of $9 per MMbtu, creating a handsome profit. If gas is shipped out of the country, the United States would be hard hit by an intense inflation of natural gas prices set by the world market.
Individuals and communities can take measures to get off the energy cost roller coaster. Energy efficiency remains a solid investment and pays far better than putting money in a savings account at today’s interest rates. While not as cost effective as efficiency, solar energy investments provide a measure of energy security and protection against future price increases for electricity. Modernizing the grid is expected to be costly, and our centralized system might end up overbuilt if the trend toward decentralized production and mini grids continue to expand.
The price of solar electricity is expected to continue to decline. As electronic devices, the price of PV panels is expected to continue to decline, as have radios, televisions, appliances, phones and computers. The majority of manufacturing facilities today produce a few hundred MW per year, but future manufacturing plants are expected to have gigawatts manufacturing capacities leading to far lower panel costs.
Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail firstname.lastname@example.org.
From the March 13-19, 2013, issue