Sunday, April 24, 2011

$4.53 gasoline and 29 cents per kilowatt-hour electricity lessons

Relying on oil for transportation has pushed gasoline prices over $4 in 6 states plus DC and to $4.53 in Hawaii.

Oil provides 75% of Hawaii's electricity where it costs 29 cents per kilowatt-hour as of December 2010.

Fifty years ago, the USA was heavily dependent on oil to make electricity, but the amount of oil to make electricity has been declining since the Arab oil embargo of 1973.  Nuclear power and natural gas that provide 44% of our power took the place of burning oil to make electricity.

Today Hawaii is the exception to the USA rule of little oil used to make electricity.  Less than 1% of USA electricity comes from burning oil.  The USA now gets three times more electricity from wind than from oil.

The replacement of oil by other fuels to make electricity is a triumph for our environment, economy, and national security.

If the USA still heavily used oil to make electricity, a broad energy shock would be crippling our economy today and our air would be dirtier.  The national average residential electricity price would be  between 15 to 20 cents per kilowatt-hour rather than the 10 cents it is.  Families would be paying another $500 per year for electricity, in addition to the $1,000 more for gasoline.

Those combined additional costs of $1500 would devour another 3% of total income for families with the median income and would likely be the straw that would break the current economic recovery.

Good policy broke our oil addiction for making electricity.  Now we have to finish breaking free from oil and decrease by 70% within 20 years our use of oil for transportation.

1 comment:

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