Energy Costs

Energy Prices

According to the Energy Information Administration of the US Department of Energy, a rise in energy costs will look as follows:

· This winter, residential space‐heating expenditures are projected to increase for all fuel types compared to year‐ago levels. On average, households heating primarily with natural gas are expected to spend about $350 (48 percent) more this winter in fuel expenditures.

· Households heating primarily with electricity can expect, on average, to pay $38 (5 percent) more.

· Under the baseline weather case, Henry Hub natural gas prices are expected to average around $9.00 per thousand cubic feet (mcf) in 2005 and around $8.70 per mcf in 2006.

· Retail gasoline prices are expected to average close to $2.35 per gallon in 2005 and about $2.45 in 2006.

· Residential electricity prices are expected to average 9.3 cents per kilowatthour (kwh) in 2005 and about 9.5 cents per kwh in 2006, with significant regional differences depending on the fuel mix used to generate electricity in each region of the country.

· The price of West Texas Intermediate (WTI) crude oil is projected to average close to $58 per barrel in 2005 and $64‐$65 per barrel in 2006.

· Complete recovery of energy infrastructure from hurricane damage will take many months. However, considerable recovery should occur by the end of 2005.

For more information please see Short‐Term Energy Outlook and Winter Fuels

Outlook October 12, 2005 Release or visit www.eia.doe.gov

· At a hearing before the Senate Committee on Commerce, Science and Transportation, Tyson Slocum, research director, Public Citizen’s energy program, said that recent oil company mergers are partly responsible for gasoline price spikes.

· Despite Hurricane Katrina’s reported impact on gasoline prices, gasoline and oil prices have been creeping up for two years, in large part because of a wave of mergers in the oil industry.

· Last year, the top five U.S. oil refining companies controlled 56.3 percent of domestic oil refinery capacity. A decade ago, the 10 largest U.S. oil refining companies controlled 55.6 percent of refining capacity — which means that, due to mergers, the five largest oil refiners today control more capacity than the 10 largest did a decade ago.

· The five largest oil refiners — ConocoPhillips, Valero, ExxonMobil, Shell and BP — have seen profits of $228 billion since 2001.

· Despite government reports issued in 2001 and 2004 that directly link corporate mergers to high gasoline prices, no action has been taken to aid consumers who are suffering from a volatile market where prices spike day by day.

· oil industry profits are at record highs, largely due to record refinery profit margins. While in 1999, U.S. oil refiners earned 22.8 cents for every gallon of gasoline they refined, that profit margin increased 80 percent by 2004, to 40.8 cents per gallon.

For more information, see Rising Gasoline Prices Aren’t Wholly Caused by Hurricane Katrina, Public Citizen Tells Senate

Natural Gas

· Humans began tapping the Earth's deposits of oil and natural gas a little over a century ago. We've been exhausting the planet's oil reserves more quickly than gas reserves, because oil is easier to pump, transport and use. The planet's gas endowment will last longer, but the world is now using more each year than is being discovered -- an ominous sign.

· Accelerated consumption across the globe, says Darley, will continue to drive up natural gas prices, deplete reserves, and trigger chronic shortages. In a world where growing energy demand has begun to run up against environmental limits, gas is almost too good to be true, and, it seems, too good to leave in the ground. For instance:

• Countries trying to meet the greenhouse emissions limits set by the Kyoto Protocol are rapidly building natural gas-fired power plants, which emit much less carbon dioxide than do coal plants. Even in the United States, the world's number-one Kyoto deadbeat, most newly built power plants are gas-fueled, even as our domestic gas reserves dwindle.
• In response to criticism of its heavy coal burning, China intends to triple or quadruple its use of natural gas for power generation in the coming decade.
• The petroleum industry is pushing hard to build large numbers of liquefied natural gas (LNG) tankers, along with the requisite high-tech port facilities in the major producing and consuming nations. That will make it easier for a big energy-using nation like the U.S. to suck not only from gas pipelines on its own continent but from wells almost anywhere on the planet, as we currently do to feed our oil habit.
• Building and operating a global LNG system will require vast amounts of energy -- much of it supplied by gas, of course. To produce the power required to haul liquefied gas across oceans while keeping it cooled to about -260 degrees Fahrenheit, LNG tankers draw on their own cargo. And an explosion at a LNG terminal could produce a fireball a mile wide -- qualifying LNG as a potential WMD.
• The process of extracting oil from sands in the Canadian province of Alberta -- often looked to as a key new resource in a "safe" part of the world -- requires natural gas, and a lot of it. Darley predicts that if the oil sands are to satisfy even one-eighth of North America's demand, they will have to absorb a quarter to a half of Canada's natural gas production!
• Hydrogen is often hailed as a fuel of the future, but today, most hydrogen is manufactured from -- what else? -- natural gas. Hydrogen could be generated by, say, using solar energy to split water molecules, but don't count that happening on a large scale as long as gas is available. President Bush's well-hyped 2003 FreedomCar initiative relied mostly on gas-derived hydrogen.

· The timetable for peak gas or plateauing natural gas production and an eventual decline is much harder to forecast it is for oil. But a perfect storm of long-term forces appears to be blowing demand in only one direction -- up -- and the greatest access to such a hard-to-transport, hard-to-store resource will likely go to those players with the most money and the strongest armies.

For more information, see Hunger For Natural Gas By Stan Cox, AlterNet. Posted October 12, 2005

Energy policy

· The US House of Representatives passed the Energy and Commerce Committee's refining and pipeline bill Oct. 7 by a two-vote margin (OGJ Online, Oct. 4, 2005). But as members headed to their home districts for a week-long Columbus Day recess, it was still not clear how much effect the measure will have.

· Proponents said HR 3893, the Gasoline for America's Security Act, would reform cumbersome siting procedures by requiring the Department of Energy to coordinate refinery permitting—but only if a state's governor requests the process or if the US president designates the site as potentially suitable for a refinery.

· The bill did not include a provision addressing the New Source Review (NSR) permitting program under the 1977 Clean Air Act amendments. Electric utilities, as well as oil refiners, had sought reforms to clarify the process.

· Other parts of the bill would try to reform siting and construction procedures for pipelines and expansions and encourage prompt construction of a natural gas pipeline from Alaska to the Lower 48 states. The Alaskan pipeline provision includes a loan guarantee sunset provision if the state of Alaska and participants don't reach an agreement on constructing the system within 2 years of enactment.

· The bill also would require the US energy secretary to study whether essential crude oil and product pipelines have backup power to continue operating if their regular sources are cut off. It also would give the Federal Energy Regulatory Commission authority to regulate gas gathering lines on the Outer Continental Shelf.

· A provision that would have lifted offshore moratoriums and withdrawals for natural gas had been moved into the bill from a measure passed a week earlier by the Resources Committee (OGJ Online, Sept. 29, 2005). It was deleted during floor action.

For more information see US House narrowly passes bill on refining, pipelines

Nick Snow Washington Correspondent the Oil & Gas Journal http://ogj.pennnet.com/articles/article_display.cfm?Section=ONART&C=GenIn&ARTICLE_ID=238596&p=7

Renewable Energy and Conservation

Wind and Solar

· Customers of Xcel Energy's Windsource wind-energy program soon will have more to brag about than their environmental ethic. Namely, lower bills. The 29,000 Colorado Windsource participants who now pay as much as $6 more a month for "green power" soon will pay up to $10 less than their neighbors who use conventionally generated electricity.

· "People should be lining up now at Xcel to buy wind power because it will save them a lot of money," said Rick Gilliam, senior energy-policy adviser for Boulder-based Western Resource Advocates, an energy and environmental research group.

· Colorado voters in 2004 passed a law requiring the state's largest utilities to obtain 10 percent of their power through renewable resources - such as wind power - by 2015. Currently, Xcel gets about 2 percent of its power from wind farms.

For more information see Energy bargain blowing in wind By Steve Raabe

Denver Post Staff Writer DenverPost.com

· Whoever buys the house at 7387 Howell Mill Court will have a tough time keeping up with the Joneses. Like a jealous twin, it sits next to a replica dwelling that probably will receive far more attention.

· The neighboring house is a zero energy home, meaning that it should, over the course of a year, produce as much energy as it consumes. Ideally, it will tally up an annual energy bill of zero dollars.

· The University of Nevada, Las Vegas Center for Energy Research will monitor the two homes, which Pinnacle Homes constructed as part of a 146-home community called The Vinings in southwest Las Vegas.

· "There are two houses together that started life on the architect's drawing board as exactly the same house. One of them has been modified to be the better performance house, hopefully," said Bob Boehm, the UNLV center's director.

· The homes will be heated in the winter and air conditioned during the summer. The study will last 18 months before the model homes go on the market.

· The zero energy home is equipped with a photo voltaic electric system that receives energy from roof-integrated solar panels.

· The system is connected to the Nevada Power Co. grid, which will provide the home with energy when it's not producing enough.

· "If it generates more energy than what you need it turns the meter backward so you basically sell power to Nevada Power for the same cost they sell it to you," Boehm said. "When it's hot and sunny outside, that's when Nevada Power has the biggest drain on their grid and that's the time you're helping out with it the most."

For more information see Solar home uses zero energy By K.C. Howard, LAS VEGAS REVIEW-JOURNAL

· Wind power is the fastest-growing energy source in the world. (Worldwatch Institute)

· The wind in North Dakota alone could produce a third of America's electricity. (The Official Earth Day Guide to Planet Repair)

· Wind power has the potential to supply a large fraction--probably at least 20%--of U.S. electricity demand at an economical price.

· In 1990, California's wind power plants offset the emission of more than 2.5 billion pounds of carbon dioxide, and 15 million pounds of other pollutants that would have otherwise been produced.

· Providing power for villages in developing countries is a fast-growing market for photovoltaics. The United Nations estimates that more than 2 million villages worldwide are without electric power for water supply, refrigeration, lighting, and other basic needs, and the cost of extending the utility grids is prohibitive, $23,000 to $46,000 per kilometer in 1988.

· A one kilowatt Photovoltaic (PV) system each month:

• prevents 150 lbs. of coal from being mined
• prevents 300 lbs. of CO2 from entering the atmosphere
• keeps 105 gallons of water from being consumed
• keeps NO and SO2 from being released into the environment

For more on wind and solar power, see www.solarenergy.org

Energy Consumption

• Though accounting for only 5 percent of the world's population, Americans consume 26 percent of the world's energy. (American Almanac)
• Worldwide, some 2 billion people are currently without electricity. (U.S. Department of Energy)
• Total U.S. residential energy consumption is projected to increase 17 percent from 1995 - 2015. (U.S. Energy Information Administration)
• World energy consumption is expected to increase 40% to 50% by the year 2010, and the global mix of fuels--renewables (18%), nuclear (4%), and fossil (78%)--is projected to remain substantially the same as today; thus global carbon dioxide emissions would also increase 50% to 60%.
• Among industrialized and developing countries, Canada consumes per capita the most energy in the world, the United Sates ranks second, and Italy consumes the least among industrialized countries.
• Developing countries use 30% of global energy. Rapid population growth, combined with economic growth, will rapidly increase that percentage in the next 10 years.
• America uses about 15 times more energy per person than does the typical developing country.
• Residential appliances, including heating and cooling equipment and water heaters, consume 90% of all energy used in the U.S. residential sector.
• The United States spends about $440 billion annually for energy. Energy costs U.S.U.S. manufacturers $100 billion annually. consumers $200 billion and

For more stats on energy consumption see, www.solarenergy.org