One quick question: Will rising gas prices encourage the growth of renewable energy?
The military conflict in Iran and surrounding region continues to restrict the global supply of oil and send the price of gas soaring, but will that encourage more people to consider renewable energy?
We recently asked Darrin Magee, director of WWU’s Institute for Energy Studies, whether rising prices at the gas pump will hasten a greener energy future.
Do you think rising gas prices will have any impact on interest in and adoption of greener energy sources?
“Yes, but the ease with which this transition occurs depends on whether we’re talking about a household choosing to purchase an electric vehicle the next time they’re due for a new car, or the U.S. committing, across both political parties, to a wholesale change in the way we produce, convert, and use energy.
As an individual, I can opt for an EV (already did, and love it!), insulate my home better (done!), add solar panels (done!), and electrify my heating and water heating (working on it), and thereby reduce my exposure to fossil fuel price volatility.
Washington state has set ambitious goals and is making important strides. But we’ve seen how hard it is to make that transition on a national scale.
As we’ve already seen during the weeks since Israel and the U.S. began attacking Iran, gasoline prices are rising at the pump. While the U.S. isn’t heavily dependent on Middle East oil right now due to recent increases in domestic production, a reduction in oil flowing out of the Gulf region reduces supply of a globally traded commodity, and will thus push prices upward.
This will almost certainly continue as long as shipping through the Strait of Hormuz is constrained. Perhaps most ironic outcome is that the shutdown of shipping through the Strait led the U.S. to remove sanctions on Russian oil in an attempt to prevent shortfalls in the global supply. That is definitely a geopolitical and economic win for Russia.
Fluctuating petroleum prices have already altered the ways we transport energy to homes. The boxy 18-wheeler tractors that dominated U.S. roadways from the 1970s were rapidly replaced by the curvier, more aerodynamic, more efficient ones beginning around 2008, when diesel prices jumped to $4.50 a gallon (higher in some areas). That was driven in large part by companies who, long accustomed to cheap diesel, suddenly saw their fuel costs double or more. If I were the owner of fleet of vehicles for a school system, delivery service, or the like, I would be very seriously considering electrifying that fleet at my next opportunity to reduce my exposure to petroleum market swings.
Conflict in Iran and threats to vessel traffic will also affect shipments of liquefied natural gas (LNG). The U.S. Energy Information Administration estimates some 20 percent of global LNG flows through the Strait.
Like oil, natural gas is a global commodity, so reductions in one source will likely drive prices up everywhere. Unlike petroleum which goes primarily to transportation, natural gas plays a significant role in electricity generation in the U.S. at nearly 40 percent, as well as a small but growing fraction in China. Given that many U.S. households rely on natural gas for heating as well, I don’t foresee any way that the current conflict can be good news for energy affordability for U.S. consumers. As a result, I would expect those consumers who can afford to do so will look to improve their energy efficiency and move toward non-fossil energy sources where possible, a trend I think will only become clearer the longer this conflict persists.”
Mary Gallagher covers Western’s Academic Programs, Institutes and Centers. Have a great story idea? Reach out to her at gallagm7@wwu.edu