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The Cost of Energy Dependence. Frank Clemente Ph.D. Senior Professor of Social Science & Energy Policy Penn State University fac226@psu.edu. The Price of Energy Dependence.
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The Cost of Energy Dependence Frank Clemente Ph.D. Senior Professor of Social Science & Energy Policy Penn State University fac226@psu.edu
The Price of Energy Dependence • Dependence means loss of control. In 2000, the EIA projected oil would be $25 per barrel in 2008. Actual price is over $130 • Cost of imported oil- record trade deficits. Over a decade we will spend more than $5 trillion to buy foreign energy -- $50,000 for each American household. • Disproportionate costs. Lower income groups spend as much as 15% of their income on energy. • Competition for oil from China, India and other developing nations must now be factored into our energy planning. • National security is at risk because we are vulnerable to sudden disruptions and extortion---Iran, Russia, Venezuela
The Reality of Energy Supply in the U.S.-- Oil and NG Production have both Peaked 3 3 3
Our Growing Dependence on Foreign Crude Oil D e p e n d e n c e
The Cost of Dependence— Transferring wealth of the American People Annual Cost of U.S. Petroleum Imports 5
The U.S. Bets On A Brave New World Where new supply is projected to come from 2006-2019 Where new NG supply came from 1993 - 2006 “North America is setting itself to import LNG in large quantities” (IEA, 2007) 6 6 6 • Source: EIA
What We Pay for LNG Now and Will Pay if NG Replaces Coal • For perspective, if NG replaces coal generation the cost for LNG from 2015-2030 would be over 3 trillion dollars with • Projection based on NYMEX Future Strip to 2013 8