Do We Have a Domestic Energy Crises Here?
It’s been talked about. It’s been debated. I blogged about it a month ago.
And, it’s going to sting.
Global demand for oil, coupled with strained supply, finally is driving gas prices in the United States to levels previously only experienced by other countries.
John Hofmeister, former president of Shell Oil, said in an interview on December 28 that he expects the retail cost of a gallon of gasoline to reach $5 by 2012. That’s only a year away. A great website to keep track of gasoline trends (and to see if Mr. Hofmeister’s prediction comes true) is www.gasbuddy.com. I’ll save you the trip for right now; it points out that our current gas price situation (December 2010/January 2011 prices) is as high as it was in the winter of 2008. That following summer, gasoline per gallon prices exceeded $4.00.
As a country, we must declare our oil/energy independence. We must.
A major telecommunications company (which I’ll be announcing later this month) has converted a portion of their fleet to propane autogas. Here’s why they are geniuses:
· When gasoline hits the $5.00/gallon mark, historic trends indicate that their propane costs will be 36 percent less at $3.20/gallon.
· With the $0.50/gallon tax credit that was extended through the end of 2011, their actual cost is $2.70/gallon (54 percent decrease).
· Their vans typically cover about 30,000 miles a year and get 10 miles per gallon. That means they will pump 3,000 gallons per van in 2011.
· At a $2.30/gallon cost save over 3,000 gallons, they are saving $6,900 in fuel costs in 2011 alone.
· Over the life of each van (150,000 miles and 15,000 gallons of fuel), they will save $34,500 (based on prices remaining constant).
Look, we can do math all day. The fact is that the long-term benefits of switching from gasoline to propane autogas are in greenhouse gas, carbon monoxide, and nitrogen oxide reductions. Another fact is we control our own destiny by not being as dependent on the cost of a barrel of oil. And yet another fact is that 90 percent of propane we use today comes from domestic sources of production, with 60 percent as a byproduct of the natural gas refining process. And we know natural gas is as abundant and as American as apple pie.
Our domestic energy crisis is coming. We can beat it, but we must take it in steps. First, we need our North American fleet managers to stay motivated to convert away from gasoline and diesel; this most recent spike will help serve as a reminder and create a sense of urgency. Second, we need Washington D.C. to create and continue tax benefits that reward companies, cities, counties, and states that are doing their part to clean up the environment and lessen dependence on foreign oil (while saving themselves money).
ROUSH CleanTech has solutions and is working on more.
And that’s your fuel for thought.
P.S. Stay tuned for some unbelievable feedback I was given from the CEO of a major electric company.
