Given supply and demand projections, fossil fuel prices have nowhere to go but up. The current economic recession will end, U.S. energy demands will increase, and without action to increase clean efficient energy, our economy will be wrenched by ever-higher more volatile fossil fuel prices.
- Indiana sends 75% of its of its energy money out of the state to pay for imported coal, natural gas and oil products. And, the state’s energy use is rising: Indiana’s petroleum consumption climbed to 1.8 million gallons per day – up over 300,000 gallons from 1999.
- The financial crisis we are experiencing now is in part due to our energy posture, according to high-ranking retired military leaders.[14]
- Over the last few decades we have seen fossil fuel prices fluctuate wildly in large part because of increasing demand and decreasing supply.
- Oil has jumped as high as $140 a barrel – sending prices at the pump upwards of $4 a gallon for gasoline.[15] Coal prices also spiked, with the benchmark Central Appalachian coal hitting $175 per short ton.[16]
- Coal is also subject to sudden price increases and supply disruptions. In mid-2008 coal prices spiked: The price of a ton of Central Appalachian coal more than tripled to $175 per ton. A major contributing factor to volatility was increased international demand for coal from developing countries – especially from China.
- Wood Mackenzie, which provides research and consulting services for the mining, metal, and energy industry, says that China’s coal exports have been declining in recent years, while imports have grown steadily – turning the country into a net importer of coal.
- The economic downturn has caused those prices to come down temporarily, but still they remain high – gas prices are 40% higher now than in January – and will continue rising once the economy recovers.
- Oil prices are projected to climb to more than $100 a barrel by 2015 and $190 a barrel by 2030 according to the International Energy Agency (IEA).[17]
- There are expensive national security implications of relying so heavily on fossil fuels: we pay for our oil by sending billions of dollars to countries openly hostile to the US. And because we consume far more than all our reserves, on or offshore, we can never stop that flow of money as long as we are using oil.
[1] Powering America’s Defense: Energy and the Risks to National Security, CNA May 2009 www.cna.org
[2] BBC News, Oil at Record Near $140 a Barrel, June 2008, http://news.bbc.co.uk/2/hi/7457157.stm.
[3] http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html – spot; http://news.bbc.co.uk/2/hi/7457157.stm
[4] http://online.wsj.com/article/SB125784836637040853.html#mod=todays_us_page_one. www.iea.org
We are Indiana business leaders who believe that Indiana has an extraordinary opportunity to become a leader in the construction of renewable energy and energy efficient systems, and the manufacturing of component of such systems. We are committed to advancing policy that will accelerate the development of these sectors in Indiana.
Header image courtesy of http://www.flickr.com/photos/roundaboutindy/
Header image courtesy of http://www.flickr.com/photos/roundaboutindy/