Solaqua's Energy Future Project :: Context of the Project

Project Proposal

Section 1.1 Impending Energy Challenges

Section 1.2 The Rising Cost of Energy

Section 1.2.1 Energy Composition

 

 

1.1 Impending Energy Challenges

 

     The United States is faced with a substantial challenge in providing affordable, secure, and dependable energy for the immediate and perpetual future. The energy future of the US is currently a topic of great debate and concern as many schools of thought argue from opposing perspectives the costs and benefits of proposed and existing energy production and recovery technologies. Recent natural and social events have raised concerns over all three of those criteria as specific and severe vulnerabilities have been pointed out in the wake of events such as the hurricanes in the Gulf of Mexico in the fall of 2005. Economic watchdog groups such as the WTRG Economics have raised the question of an impending energy crisis, citing that certain indicator signs that were present before the oil crises of 1973 and 1979 are observable today, and in a more severe manner. To supply the future energy consumption needs energy must be available that is affordable, sustainable, and accessible. Our energy future depends on changes in the way we think about energy from production to conservation, and we will certainly fail to meet the criteria just mentioned if we do not change our current energy practices.

     Energy in the US is composed of mainly fossil fuels. We get most of our electricity from burning coal, natural gas, petroleum, and other fossil fuels. Nuclear facilities, hydroelectric and additional renewable sources such as wind provide the rest of our energy production portfolio. The question as to whether nuclear is a sustainable energy source will not be explored here, but as a very topical point it should be noted that nuclear energy production does produce waste, which is not sustainable. Predominantly economic forces drive energy production and obtainment in the US such that cost-effective technologies are attractive and thus easier to implement than more expensive technologies. However, non fossil fuel based energy production has been increasing in affordability and according to the Energy Information Administration (EIA), by 2010 the monetary cost associated with energy produced from new coal fired power plants will exceed that of new wind power plants (US Department of Energy January 2004). Interestingly, in certain parts of the country wind is currently the lowest cost energy provider over its lifecycle (Dutzik August 2005).

     In addition to the heavy reliance we have upon fossil fuels for energy production here in the US there are additional concerns regarding where those fossil fuel resources come from. The fact that the US relies on imports to provide nearly one-third of its total energy consumption, up from 15% in 1985, is an undeniable indicator that the US is dependent upon good trade relations with these exporting nations (EIA 2004). This dependency is on an increasing trend, and there is little information that there will soon be a shift in that trend. This increasing dependency on foreign energy brings with it a rising concern over energy security, as we are importing from some socially unstable countries.

     The bottom line to our energy future is likely going to be determined by costs. Costs drive markets and the US energy market is no exception. Energy is bought and traded on the open market as a commodity and its price reflects the market forces that impact it. Energy is not a pure commodity however, as its price is dependent upon socio-political factors as well. The complex method in which energy prices are controlled is, in itself, one of the vulnerabilities of the energy market, as the many forces impacting energy prices do not always agree. The costs of energy have been increasing consistently over the past nearly 150 years of energy production, and this trend, if business continues as usual, does not appear to be slowing down. Section 1.2 will discuss the composition of the US energy market and how the price trends of components that provide the majority of domestic energy have evolved.

 

 

Go to Section 1.2