“The price of oil is cheap. It’s only $28 a barrel right now. Why spend all this money on some new fangled clean energy stuff? Our current system is working fine.”
We’ve all heard these arguments for not pursuing new technologies in energy production. Stick to what we know, stick to what we’ve always done, and put off any changes until we really need to. Everyone does it in their daily lives, whether it be upgrading your smartphone, having to learn how to use a new computer, or figuring out what all those switches in your new car do.
The problem, though, is when it comes to energy production and the power that you have delivered to your home every day, the old ways aren’t often the best ways. Traditional power generation requires fuel to operate, whether it be oil, coal, natural gas, or nuclear material. All of these are commodities, traded on the international open-market, and susceptible to any number of uncontrollable factors – shortages, wars, accidents, political decisions, etc. No one can reliably predict their future prices or supply, although many stock brokers and hedge-fund managers try.
The argument that oil, and other fuel sources, are cheap so we should stick with traditional methods of energy production is a very short-sighted position. The current state of the oil market is a perfect example of this.
The current price for crude oil is at a historical low – $28 per barrel. That is incredibly cheap, but we can all assume it’s not going to stay at that level. In fact, looking back at crude oil prices since 1946 (adjusted for inflation) the price of oil has fluctuated wildly, from $18 in 1946, to peaks of $117 and $136 in 1979 and 2008 respectively, and has been over $100 per barrel twice in the last 5 years.
Even the historical averages don’t bode well for the future costs of traditional energy sources using oil. The average price of a barrel since 1946 is $41.76, since 1980 is $53.08, and since 2000 is $63.57. In other words, over time, regardless of the swings in prices, the average cost of oil is increasing steadily. The cost to produce energy from these fuel prices will continue to cost consumers and businesses more and more in the future.
Now, let’s take a quick look at clean, renewable fuel sources. Yes, new facilities and systems need to be built to collect and convert renewable sources into energy. And yes, those systems can be expensive, which affects the past and current costs of clean energy to consumers. But this must be kept in mind.
Just like your first smartphone, flat screen television or wireless sound system, which were all very expensive when the first models were introduced, you can now find the same model you first bought at an incredibly lower price. When technology advances and becomes more widely used, prices inevitably go down.
Clean and renewable energy systems are on the same path. The equipment needed to collect and produce energy has improved dramatically and the cost has dropped the same. The technologies that are needed to make solar, wind, and hydroelectric sources economically feasible are improving on a daily basis while helping to drive down initial costs as well as consumer prices.
All this being said, the bottom line is this. The cost of traditional fuel sources for energy production can fluctuate wildly and are on a historical climb upwards. The cost of sunlight, wind and water is constant, and will remain so over time. And with the constant advances in technologies, the cost of renewable energy will continue to fall for consumers.
The ultimate choice seems clear.