Price elasticities

Farm picture: the Womerlippi Farm wood pile, about 28 MWh of pure power

In the lingering absence of any real national energy-and-climate policy, the differential prices of energy resources are currently the most important factors in our climate future.

Tracking and using differential pricing isn't a very open kind of information. While the general public operates at a fairly sophisticated level in making choices when shopping for energy, trading off one kind of vacation against another, or one kind of house against another at the margin on the basis of embedded energy costs, the actual price of energy in scientifically comparative terms is badly hidden by efficiency factors and by the different mechanics of the systems used to extract the energy and put it to use.

This is why electric cars are so cheap to run.

They use a slightly more expensive fuel. Household electricity in Maine comes out at about 16 cents per kilowatt hour, where as gasoline is currently about 9 cents per kilowatt hour.

But your car's engine is usually only 35% thermally efficient.

In other words, you pay roughly three times 9 cents per kilowatt hour of actual motoring service, or, say, 27 cents/unit.

While a battery pack/electric motor combination is usually more than 70 or 80% thermally efficient, and the average electric car itself is usually lighter, about half or two thirds the rolling weight in most cases, and thus yet more efficient. Say 8 or 9 cents per unit.

An electric car can thus deliver motoring service for much less than a gasoline one. A plug-in hybrid delivers this kind of pricing too, for the first 25-40 miles of driving. After that the gasoline generator kicks in and prices go up.

Sure, a low-end pure electric car like the Nissan Leaf is more expensive than a comparable Ford Focus, and a medium-nice plug-in hybrid like the Toyota Prius or Chevrolet Volt is more expensive than a comparable Ford Fusion or Chevy Cruze. But the electric vehicle will pay that additional cost off very quickly in reduced gas prices.

This is also why wood stoves are so cheap to run.

There are similarly invisible energy cost comparison problems in household heating and cooling. Different mechanical forms of energy consumption have different thermal efficiencies as well as different prices for each different kind of energy.

So my wood stove, for instance, a super-efficient Norski model, gives me more than 85% of the energy I put into it back in the form of heat, at very little cost per BTU because I cut and split my own wood from my own land. It takes me about ten-twelve days a year to put up the four cords we use. My opportunity costs for fuel wood are low because I don't generally work in the summers when I cut wood. If we imagine that each of my cords of mostly ash wood costs me the market price of $250 per cord, then at 21 million btus per cord, a million btus costs me about twelve dollars to buy, and by the time I get it into my home's building envelope, it's up to $14/mbtu unit.

My forced-air oil furnace, on the other hand, only gives me 75% thermal efficiency, and each million btus costs me $25 to buy, and by the time I get to enjoy it, $32 to use each mbtu unit.

My wood stove cost about $4,000 with the chimney, but it paid for itself very quickly.

Additionally, different kinds of energy have different regional and local economic "multipliers." So, for instance, if we really want a thriving Maine economy, we would do much better to pay ourselves for energy than to pay the Canadians, or worse, the Saudis.

This is why on a purely economic basis, setting aside the environmental problems for a second, Maine wind power and Maine biomass energy make so much economic sense. Not only are they much cheaper to use and enjoy, but we also employ our neighbors and friends to access these energy forms, not some faceless, nameless guy in Edmonton or Riyadh.

And I haven't even talked about the dollar benefits of avoiding dangerous climate change, particularly the increased chance of extreme weather events.

I find it interesting how uninterested most folk are in knowing this kind of information.

We seem to much prefer to pay high prices for energy than to have to think about energy.

But at the margin, even high price has an effect. Most folk will curtail some energy use if faced with higher prices for long periods. They may not switch energy format. But they will reduce energy expenditures.

Which means that a lot of people are falling, ever so slowly, into energy poverty.

Why don't we want to think about this, when it creates so many problems, and when there are so many interesting solutions?

I don't know.

But what I do know, is we need a lot more energy geeks. And energy geeks are cost-effective.

They pay for themselves very quickly.