A bargain at twice the price

Steve Wilcox, one of the readers of this column, suggested I write about the good value that electricity provides for our lives. He is a smart engineer and that isn’t an oxymoron in his case. (Oxymoron examples – clean coal, government organization, tax return and you soon get the drift).

When an elevator takes you up to the 15th floor of a building, few of us give it a second thought, unless the elevator is broken and we have to walk up. We tend to take things for granted. Electricity is ubiquitous, inexpensive and not at all respected for what it can do. (Ubiquitous = being everywhere, omnipresent) I just hate it when a word slips into general usage and I didn’t get the memo on it.

A kilowatt-hour costs roughly 10 cents and provides you with 1000 watts of electrical energy for an hour. By comparison, a human can only provide a peak work output of 500 watts for several seconds. A level of 200 watts output from a trained athlete can be sustained for several hours and was enough for the amazing man-powered flight across the English Channel back a number of years ago. One can quickly see that the human body could not sustain a lifestyle of lighting, heating or appliances. And who would want to be tied to a bicycle generator for 8 hours a day working for a measly 10 cents a shift.

We have been seduced by the plentiful, low cost supply of electrical and oil based energy sources to fulfill our desires. Our houses have become filled with appliances, grown much larger and we have bought large cars and trucks. Our cities sprawl over large distances without efficient public transport. A litre of gas costs roughly $1 with taxes and refining costs. It contains 35,000 Btu’s and when burnt for transportation purposes will last 25 kilometers in a car with excellent mileage (4L /100 km) but only 6 km in a vehicle with a poor rating of 16L / 100 km. At its best, that is 4 cents per kilometer.

The use of electricity for refrigeration is a remarkable value as well. Before electrification, ice blocks were cut in winter, stored, and transported to homes for use in iceboxes. We are now able to keep our food fresh and safe for a very small cost of electrical energy. Efficiency NB tells us that an efficient fridge uses 405 kWh per year or a little over 1 kWh per day (11 cent/day). An inefficient unit from 1984 uses 1457 kWh (40 cents / day). The annual difference is $105 per year – enough savings to justify a changeout.

The biggest use of electricity in our homes or apartments is for water or space heating. Oil and wood heat remains to some extent. Natural gas is prominent in many provinces across Canada. Central heating controlled by thermostat is extremely convenient for our society and has become the norm due to the low cost of energy. If the average salary in Canada is $38,000 per year, then a total home energy bill of $2500 per year is 6.5% of gross salary. Your percentage may vary based on salary, heating / electrical bill and size of home.

Most people would not be willing to cut their own wood in the forest or go back to one woodstove as the only heat source in their house. We may complain but we realize how great a value energy really is.

If the world had infinite sources of energy, no changes in our lifestyle would be required. However, with 6.6 billion people on this planet demanding resources, something has got to give. A recent sign is the rising price of oil, which indicates some real difficulties in world supply. Given that the supply will eventually start a downward trend, what would be our appropriate energy strategy?

David Hay of NB Power recently indicated that the price of electricity is too low to encourage conservation. Very true. Unfortunately just raising the cost of electricity is not politically feasible at this moment. However, raising the price of a kWh while simultaneously lowering the provincial income and corporate tax rate by an equivalent amount is a neutral step that gives money back to the people and makes saving energy into an interesting proposition for us. Taxing the carbon-based production facilities of NB Power does the transfer of the money. The government should also agree on an accelerated time frame for power rate reform from declining to inclining block, again on a neutral basis.

The reduction of the gas tax by Shawn Graham after the last election was a retrogressive step. Re-installing the tax with compensating subsidies for vehicle efficiencies and public transport would be tax neutral and encourage conservation.

Sweden has a plan. “Our dependency on oil should be broken by 2020,” said Mona Sahlin, minister of sustainable development, in an interview with The Guardian newspaper. How do they plan to do it?

What is our plan for New Brunswick? When the price of a barrel goes above $100, will we see a plan? Perhaps, when the price of oil hits $150. So far, the rising Canadian dollar has taken the sting out of recent increases.

Electricity and gas are worthwhile at twice the price of today and the sooner we get there the better off we’ll be in the long term. Shawn Graham seeks transformational change in this province. Unfortunately, he doesn’t recognize the real problem.


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