How much did you spend on energy in 2005?
Sharp increases in oil and gas prices meant that many of us spent more than ever before. But unless you kept detailed records, you may not know how much you actually spent. (I certainly don’t, and I imagine that I’m more inclined than most to keep those kinds of records.)
So I spent a few hours last week tooling around the US Energy Information Administration website, which has fairly detailed state-level data on how much gasoline, diesel, and electric power we use, and how much we pay for it.
The answer to how much we spent on energy—in one way of looking at things, we spent a lot. An awful lot.
But in another way, it’s also not that much. And therein lies a problem for conservation.
Find this article interesting? Support more research like this with a year-end gift!
For this exercise, I didn’t look at all energy spending, but just the big, day-to-day energy purchases that are common to most households: gasoline, electric bills, heating bills, plus diesel fuel that’s mostly used to move goods from place to place.
That’s a bit of an arbitrary choice, obviously. It leaves out some minor fuels (such as kerosene) as well as some major ones (such as jet fuel). And it completely excludes energy consumed by the region’s heavy industries, as well as most farm inputs—so the figures don’t account for the embodied energy of food and consumer products. If you add those in, then energy spending goes up a bit.
So how much did we spend in the Northwest states on energy last year?
About $2,200 per person.
Among the 11.4 million residents of the US northwest, that makes about bout $25 billion all told; in round numbers, $13.5 billion in Washington, $8.2 billion in Oregon, $3.3 billion in Idaho.
On the one hand, this is incredibly cheap. Just $6 per person day will buy many of the conveniences of modern, energy-intensive living.
But on the other hand, it’s also a substantial chunk out of the average household budget. Based on income statistics from the Bureau of Economic Analysis, the energy spending tallied above represents about 6% of per-person disposable income in Washington, 7% in Oregon, and 8% in Idaho. So at least one out of every 12 dollars earned in Idaho now goes to pay for energy. And when you add in the energy I left out—industrial energy, jet fuel, and the like—those figures probably rise.
What all this suggests to me is that increasing energy efficiency is a great way of juicing the region’s economy. Boosting efficiency by just a few percentage points could save a family hundreds of dollars per year—and those savings will add up over time.
But, less optimistically, it may actually be fairly difficult to get the typical household to make the commitment to greater efficiency. The gains from many simple household conservation steps may be only few nickels per family member per day. It’s hard to get people excited about those kinds of savings—even if, over time, they add up to a substantial chunk of change.
Curiously enough, homeowners are pretty irrational about energy savings; most of us wind up needing substantial incentives (or a kick in the pants) to do things that cut our energy bills. Rising energy prices will help give us that kick; but by themselves may prompt only incremental changes in our behavior. For bigger changes, we may need smarter incentives than energy prices alone.