The Best Energy Policy Begins with Us Not Listening to Nuts

Developing an Energy Policy that is affordable, reliable, and secure

Aug 08, 2022. | By Will Hurd

Will Hurd Dalle Image Energy

If the United States is going to maximize the advancement of our citizens while sustaining harmony with our planet, we have to stop listening to the nuts on the fringes (extreme environmentalists AND climate deniers) when it comes to energy policy and environmental issues. While conflict sells advertising on television and garners clicks on social media, it doesn’t help develop good policies that help all Americans. It’s time for our country to have an energy policy that is affordable, reliable, secure, and cements us as energy independent. 

The cost of energy is always a hot topic in summer/winter, and throughout the year folks are always concerned with how much it costs to fill up our cars. On top of all this, the weather around the world is getting weirder and we are dealing with inflation that is leading our economy into a recession. To have an energy policy that is built for our present and future, we must first understand the elements affecting the cost of our electricity and gas prices.

The 3 Most Significant Drivers of Electricity Cost 

The Average American spends 2% of their monthly income on their electricity bill. The cost of electricity in the United States is affected by many factors. On an individual level, the expenses related to heating and cooling have a significant impact on costs a consumer pays, especially in areas with extreme climates. The type of heating/cooling system an individual owns, the size of a family’s home, and the local climate all matter. But, on an economy-wide scale, the 3 most significant facts that drive electricity costs are:

  1. The price of fossil fuels. Electricity in the U.S. is generated mostly from natural gas and coal. So, when the price of these fossil fuels goes up, so does the price of electricity. 
  2. Government regulations. Environmental regulations, for example, can require power plants to install needed pollution-control equipment. These costs are passed on to consumers in the form of higher electricity rates. 
  3. Infrastructure investment. In order to maintain a reliable electricity grid, utilities must continuously invest in upgrading and repairing infrastructure. These costs are also passed on to consumers. 

 

It’s time for our country to have an energy policy that is affordable, reliable, secure, and cements us as energy independent. 

The 5 Most Important Factors that Impact Gas Prices 

The average American driver spends 2.57% of their monthly income on filling up their gas tank, and the cost we have to pay at the pump is impacted by all of the following factors:

  1. The price of crude oil. This is the big one. Crude oil is what we refine to make gasoline, and the price of crude oil fluctuates based on a variety of factors including global demand, geopolitical instability, and weather. When crude oil prices increase, so do gas prices.
  2. The cost of refining. It costs money to turn crude oil into gasoline, and those costs can fluctuate based on the price of crude oil and other factors like the efficiency of the refinery. When there’s a lot of crude oil being refined, the costs go down. But if there’s an unexpected outage at a refinery, the costs go up.
  3. Federal and state taxes. Gasoline is taxed by both the federal government and most state governments. The federal gas tax is 18.4 cents per gallon, and the average state gas tax is 27.7 cents per gallon. 
  4. Distribution and marketing costs. Gasoline has to be transported from the refinery to gas stations, and gas station owners have to make a profit. These costs can fluctuate based on the price of crude oil, the efficiency of the transportation system, and other factors. For example, if there’s a hurricane in the Gulf of Mexico, it could disrupt the supply of gasoline and cause prices to rise.
  5. Seasonal demand. Gasoline demand usually increases in the summer because people are driving more. This can impact prices if there is a shortage of gasoline. 

 

The Average American spends 2% of their monthly income on their electricity bill.

The 3 Things Necessary for an Energy Policy that is Affordable, Reliable, and Secure

As the United States looks to address its energy needs in the years ahead, a reasonable approach to energy policy would be to focus on developing domestic energy sources while also promoting energy efficiency and conservation. 

  • Continue developing our domestic oil and natural gas resources while speeding up the mass use of carbon neutral sources. While we must continue to invest in renewable energy sources like wind, solar, and nuclear, we must be realistic about their ability to meet our energy needs in the near-term. 
  • Make energy efficiency and conservation a priority. We should pursue policies that incentivize Americans to use less energy, whether it’s through more efficient appliances or steps like better insulating our homes. 
  • Reduce energy waste in our economy. Utilize industrial applications to use less energy overall. 

Ultimately, our goal as a nation should be to develop an energy policy that is affordable, reliable, and secure. We CAN still maximize human advancement while sustaining harmony with our home, but time is not on our side.



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