As a global surge in the price of oil places increased strain on American families’ budgets, some policy analysts think the high cost of fossil fuels could prompt a shift toward renewable energy in the United States.
When the global economy, still recovering from COVID-19, slammed up against the supply chain disruptions caused by Russia’s invasion of Ukraine, energy prices have been skyrocketing for the last year.
The cost of crude oil in the U.S. rose to a record-breaking $130. Similarly, gasoline prices spiked to $4.33 per gallon.
This surge in prices made every related product, including fertilizers, metals, dairy, and daily essentials such as groceries, enormously costly to consumers, disrupting household budgets.
“For the first time in more than a decade, America has the opportunity to enact a comprehensive energy policy that will yield measurable savings to consumers and free us from oil and gas industry control over our wallets,” wrote Sara Baldwin, director of electrification policy at the think tank Energy Innovation.
President Biden echoed these sentiments in a press conference last Monday, saying, “When it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over we’ll be stronger and the world will be stronger and less reliant on fossil fuels when this is over.”
Biden made similar remarks when commenting on the threat of climate change in 2021: “This is a moral imperative, an economic imperative, a moment of peril — but also a moment of extraordinary possibilities.”
Acceleration Toward a Paradigm Shift
More Americans than ever are already prepared to phase out fossil fuels altogether. According to a Pew Research Center survey of over 10,000 U.S. adults, 31% of respondents favored a complete pivot toward “renewable energy.”
The same survey also clocks 69% of respondents as wanting to “prioritize developing alternative energy, such as wind and solar,” and “favor the U.S. taking steps to become carbon neutral by 2050.”
The survey was conducted in January 2022, a month before oil prices began increasing at a more aggressive rate.
Ryan Kellogg, a faculty affiliate of the Energy Policy Institute in Chicago, opined to CNBC that high gas prices could motivate American consumers to switch to more fuel-efficient or electric vehicles for personal transportation.
“These higher prices — even if they’re short-lived — just being exposed to this higher price volatility is going to make consumers think about alternatives,” said Kellogg.
Consumer trends may support a shift to electric-powered transportation; according to a recent J.D. Power study, more Americans than ever are considering electric vehicles.
John Larsen, a policy analyst with Rhodium Group, commented to CNBC, “All else equal in the medium term, higher prices are good for clean energy.”
Political and Economic Brakes
A number of obstacles could still frustrate a pivot away from fossil fuels and toward renewable energy, not least of which is the incredibly high upfront cost, reportedly.
Renewable technologies and infrastructure would require massive investments at taxpayer expense. Private companies in the renewables industry already rely heavily on subsidies, including Tesla Motors, whose cheapest vehicle starts at around $45,000. Even with taxpayer support, it will be difficult to compete with fossil fuels when and if prices eventually decrease.
Additionally, technological and environmental factors limit the energy that can be sourced from wind and solar power. Major advancements in battery storage technologies would need to be made in order to seriously consider replacing fossil fuels.
“Both solar and wind are intermittent. Industries can’t plan production if electric power depends on the weather,” wrote energy policy analyst Peter Z. Grossman for The Hill.
“Blackouts are unavoidable with solar and wind because the wind can stop blowing strongly, sometimes for weeks, and the sun sets daily and may be blocked by clouds for many days consecutively. Massive storage to date cannot fill in for more than a few hours at anything like an acceptable cost. Blackouts can cost electric customers their lives,” he continued.
Most importantly, a pivot away from fossil fuels would require enormous political will from the electorate. Given the difficulties American families currently face under high oil prices, it is hard to say if the country would commit to a lengthy, expensive transition that would replicate much of the inflationary pricing already being experienced.
