Are high gasoline prices ever a good thing?
They might be if you’re in the business of supporting renewable energy.
Pradeep Haldar, director of the Energy and Environmental Technology Applications Center at the University at Albany’s College of Nanoscale Science and Engineering, said rising energy costs are one of the major factors in increased support for renewable energy in New York state, the Capital Region and throughout the world. But even more important than cost, he said, are fears that global warming is caused by carbon dioxide emissions and a desire to reduce dependence on the source of those emissions — fossil fuels, a finite resource.
“Back in the 1970s, we had an oil crisis where oil prices went through the roof, people were waiting in long lines and they thought it was the end of the world. [President] Jimmy Carter’s administration at the time invested a lot of money in clean renewable energy, but by , the price of oil came back down again and everybody forgot about renewable energy technologies,” Haldar said. “What’s different between 1970 and today is the fact that we’re not just talking about the price of oil; we’re talking global climate change. Even if the price of oil comes back down again, people are still going to pursue renewable energy.”
New York state has the third-highest average retail price for electricity of any state in the union, 15.27 cents per kilowatt hour, 72 percent higher than the national average, according to the U.S. Energy Information Administration.
To combat those high prices, former Gov. Eliot Spitzer set out the goal to reduce New York’s electricity consumption by 15 percent below the projected consumption levels in 2015. Gov. David Paterson wants New York to increase its renewable energy use to 25 percent. That figure stood at 2 percent in 2006, according to the Energy Information Administration.
In part because of those initiatives and the bevy of local renewable energy companies in the Capital Region, New York was selected from among 16 states to participate in the International Renewable Energy Technology Institute, a venture sanctioned by the United States and Sweden. On Thursday, the NanoCollege announced that its Energy and Environmental Technology Applications Center, known as E2 TAC, will represent New York state in the group.
Haldar said the purpose of the collaboration will be to translate renewable energy technologies developed in Sweden to the United States and vice versa.
The two nations have very different electrical grids; technology developed for one would not be compatible with the other without additional engineering. Haldar said E2 TAC will begin work to develop that engineering over the next several months.
The collaboration is also expected to create a platform for quickly adapting new renewable energy technologies to both countries.
According to AAA Northway, the average price for a gallon of regular gasoline in the Capital Region on Friday was $3.37. That’s up about 53 cents from last year and only 2 cents shy of the record high price of $3.39 per gallon, reached in September 2005, right after Hurricane Katrina.
“I’ve seen reports that say where we are currently, on a national level, is right around where we were in the 1970s [adjusted for inflation],” AAA spokesman Eric Stigberg said.
Most gasoline pumped in the Capital Region also contains about 9.5 percent corn-based ethanol, subsidized by the federal government because of its status as a domestically produced renewable energy source. Ethanol contains about 3 percent less energy than gasoline and will reduce vehicle fuel mileage.
So while drivers pay near-record prices for diluted gasoline, the developers of renewable energy sources benefit from a narrowing of the cost difference between expensive but potentially limitless energy sources such as wind, solar and even experimental hydrogen fuel and cheaper but finite and “dirty” energy sources like oil, coal and natural gas.
“Solar is a little more expensive than these large coal-powered plants,” Haldar said. “Solar … it roughly costs 25 to 35 cents per kilowatt hour. We’re paying somewhere between 11 and 15 cents per kilowatt hour today, but in a place like New York City, where there are constraints on electricity, you could be paying 25 to 35 cents per kilowatt hour at peak times.”
Although solar cells don’t always function, due to a lack of adequate sunlight, they could be used to offset peak power demand during hot summers when downstate air conditioners strain New York’s power grid, Haldar said.
Haldar also said that Americans can learn a lot from the mindset of the Swedish.
“They are more conservative with their use of [energy]. Smaller cars, smaller buildings. They don’t drive long distances in cars, they don’t drive [sport utility vehicles], so fuel consumption is limited as much as possible. They take mass transit as much as possible,” Haldar said.
The Swedish also pay about $8 per gallon of gasoline, approximately 65 percent of the cost of which is taxes, according to the Swedish Consulate in New York City.
Haldar said he does not think it will be long before conditions will force similar prices in the United States, even without tax increases.
“In the next five years, oil is going to be $250 a barrel. This is my opinion, based on historical use and demand versus supply. The days of cheap oil are gone,” Haldar said.
Haldar’s views on the future price of oil are not that different from those of John Hofmeister, the head of the U.S. division of Shell Oil, who visited Albany in August. Hofmeister said then that in a few years, today’s gasoline prices will seem like a bargain if the federal government does not allow more domestic oil drilling.
“I want consumers to know gasoline doesn’t have to cost $3 a gallon. There is more than enough supply here to bring down the cost,” Hofmeister said. “I think that at some point this becomes a social justice issue because many of the people least able to pay higher gas prices need that gas to go to work every day.”
Haldar said he would rather see money invested in hydrogen energy than development of fossil fuel energy sources such as the oil sands in Alberta, Canada. He said he believes that viable hydrogen car technology, which would operate using fuel cells that produce only water vapor as a byproduct, is only 10 to 15 years away.
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