RE: Energy costs

It's good stewardship (and good sense) to analyze one's expenses. Our
electrical energy usage has decreased over the years but that's because our
four teenagers eventually moved out. Our water consumption probably has
decreased as well, but there's no way of knowing because we don't have water
meters (we live along a wide river).

Burgy is correct in that he has options, including driving less, putting on
a sweater, or dipping into his 401-K plan. My concern is more about people
who live from paycheque to paycheque in highly mortgaged houses and who have
little, if any, wiggle room. When the energy crunch comes (as it will!),
they will have their back against the wall.

Incidentally, from a fuel consumption perspective, it doesn't matter how
many cars one owns. One can only drive one car at a time.

When it comes to energy prices, we tend to have short memories and look only
at the small increases in energy costs and we soon get used to the new
reality. In this part of the world, the price of gasoline gradually climbed
to 108 c/L last year. When hurricane Katrina struck, the price shot up to
118.9 c/L. We were happy to see it come down to <1$. Two years ago, we
would have been aghast at prices hovering at the dollar mark. Yes, yes, I
know, these prices are not adjusted for inflation but that's hardly the
point. The point is that more and more of our income will be going to
paying for energy if we 'stay the course.' Something will have to give and,
for those at the margins and have little to give, the ramifications will be
considerable.

I've pointed out before in this forum that the costs of most materials
reflect the cost of energy. For example, the cost of concrete is linked to
that of energy and since hydro dams and nuclear power plants require
concrete, the cost of building hydro stations and nuclear plants will
increase. So, the longer we wait, the less affordable alterative energy
sources will become.

Chuck Vandergraaf

-----Original Message-----
From: asa-owner@lists.calvin.edu [mailto:asa-owner@lists.calvin.edu] On
Behalf Of Carol or John Burgeson
Sent: Tuesday, January 31, 2006 2:02 PM
To: asa@calvin.edu
Subject: Energy costs

Back on 1/18 Chuck wrote, in part: "The average guy (and gal) would do
well to plan ahead and to anticipate increases in energy prices in real
terms. This means maybe to resist buying a 200+ m2 home in the suburbs
for a family of 3-4 people. A home that will require large amounts of
energy to heat and cool the place and large amounts
of fossil fuel to power the cars to commute for the next 25 or so years."

As it happens, I just finished my analysis of my 2005 expenses. The cost
to heat my 3000 foot "cabin" last year was about $1000. The cost to drive
my three 4x4 vehicles over mountain roads was about $2000.

Suppose energy costs were to double? Well, I'd have to "find" the extra
$4000 somewhere. Maybe go back to work (I'm retired). Or cut back on a
few things. Or dip into my 401-K plan. Or drive less and put on a
sweater.

All of these don't look all that much formidable. Of course, I'm not
factoring in the rise on other costs as fuel prices rise).

Burgy (akin to Pollyanna)
Received on Tue Jan 31 18:17:28 2006