I will often ask people to define "energy", and after a couple of minutes of awkward silence, someone will recall high school physics and answer, "Work." I usually follow this correct response by asking everyone in the audience to think back on their day and identify some non-work thing they did that required energy. After a bit of thinking, we all come to agreement that everything we do involves energy in some form or another, and I offer a more accurate, one-word definition of energy:
"Life."
Everything we do involves energy in one of its various forms. We burn chemical energy to heat water for our morning shower. We tap the potential in an alternating circuit to power our radio or television as we listen to or watch our morning news. We consume food grown through a process that uses intense, solar radiant energy to combine carbon dioxide, water, and other nutrients into the sugars, fats, and proteins we need to survive. The way that we manage these energy resources makes them reliant on finite and increasingly scarce resources. Because of this, they carry an economic impact; one that threatens to undermine the foundation of our lives.
Two components of our energy reliance drive this instability: quantity of usage and cost of resource. These concepts have some measure of independence, but extremes of either will have an effect on the other. When prices for energy sit relatively low, usage normally increases, and vice versa. Also, when have significant stores of available energy, prices stay low, and conversely, as supplies drop considerably, prices increase. One factor not often considered in this equation, at least from a planning perspective, is the increase in population. As populations increase, without a corresponding decrease in per-person consumption, energy usage increases; if per-person consumption also increases at the same time, we have geometric increases in energy usage that have significant effects on the price and availability of resources.
To see how this plays out for a typical community, consider a neighborhood of about 20,000 households and between 40,000 and 50,000 people. According to the Energy Information Administration, in 1980, the average household spent about $800 per month on energy to support their quality of life, and used about 130 million Btu of energy (with electricity making up about 30 million of that total). By 2009, the average usage dropped to 90 million Btu (with electricity now making up about 40 million of the total), at a cost of $2,025 per household. Even though the usage dropped by almost 30%, the cost per household barely changed (when adjusted for inflation). What's more interesting is that most of the increase in the unit cost of energy happened in the period from 2000-2009, since much of the 1980s and 1990s saw relatively little increase in price. From 1980 to 2000, the price of electricity dropped (in inflation-adjusted dollars) by nearly 25%. Between 2000 and 2013, the price increased by 25%. For our 20,000 households, the community spends approximately $40,500,000 each year on energy for the home. Add to that the $3,500 a year spent on gasoline (for the 25,000 miles a year that a two-car family will drive), and that brings the energy total per household up to around $110,000,000.* Even though our per-household usage had decreased by 30% over thirty years, our population has increased by nearly 40% during that timeframe, wiping out the gains.
Even more, of that $110,000,000, virtually none of it remains in the community. The average household spends 10% of its working time just earning enough to pay for the energy bills. This does not include the food energy or material energy...just the energy for heat, light, transportation, entertainment, and productivity. Based on the trends of the last decade, that price could increase from a combined $5,525 to nearly $7,500 or $10,000 per year over the next decade. Prices in a free market follow supply-demand curves. If supplies drop, but demand remains constant, prices must climb to offset. Our current, fossil-fuel based economy has followed the trend below for reserves of fossil fuels.
Over the past thirty years, the available reserves per person in the world has continued a downward trend (albeit with minor blips). For the better part of the first 75 years of last century, we found new reserves at a faster rate than we used the resources, so the future looked bright and prices stayed low. Since that time, we have found new reserves at a rate far less than consumption, and over the last half decade, we have found no net new reserves. Even with the explosion in hydraulic fracturing for oil and natural gas, we have not changed this picture. Significant increases in world population, and in the number of people in developing countries whose economies need energy to grow, will continue to strain resources and elevate prices.
If we do not get control of our energy use, and develop new ways to harness it that build strength in our communities, we will gradually create a drag on our economies from which it will be difficult to emerge. (This does not even take into account the interrelationship among food, energy, and water whereby each compete with the other for their mutual resources, or the mounting costs from the environmental damage of fossil fuel use.) On the other hand, in a functioning market economy, the increasing cost should drive innovation that can turn the challenge into an opportunity.
We have that opportunity now: to redevelop our communities and our main streets from a consumptive-based economic model to a support-based model that builds resilience and strengthens our communities for decades to come.
Part 1: Economy...We have found it more efficient to use cheap energy to deliver our quality of life.
Part 3: Developments...The key to this restoration lies in creative redevelopment of our main streets.
No comments:
Post a Comment