How Much Does Energy Really Cost?

U.S. consumers spend about 7.3 percent of their annual incomes on energy. But that’s not the whole story.

In 2014, the United States took first and second place in a ranking of nations by the Energy Information Administration: We’re the world’s No. 1 consumer of petroleum and natural gas; we’re No. 2 when it comes to coal and electricity.

Yet the average U.S. consumer spends only about 7.3 percent of his or her annual income on energy costs. Using this number as a jumping off point, WalletHub released a study last month comparing the utility bills and gas expenditures of every U.S. state, as well as Washington, D.C., which they calculated through a rather complicated equation:

(Average Monthly Consumption of Electricity * Average Retail Price of Electricity) + (Average Monthly Consumption of Natural Gas * Average Natural Gas Residential Prices) + (Average Monthly Consumption of Home Heating Oil * Average Home Heating Oil Residential Prices) + (Average Fuel Price * (Miles Traveled/Average Motor-Fuel Consumption/Number of Drivers in the State)) = Average Monthly Energy Bill

But when we talk about energy use in America, we’re not getting the whole picture if we only think about the kind that we directly purchase, even though it’s the “easiest to tally,” as explained by UC-San Diego physicist Tom Murphy. Most of us are fairly aware of how much electricity or natural gas we’re consuming at home—we might even try to use CFL lightbulbs, or make sure our thermostats are set at a responsible temperature. And personal transportation is pretty easy to wrap our minds around. According to Murphy, “The average American household uses about 1,050 gallons of gasoline each year to move their personal vehicles around.” In a general sense, we’re all aware that commuting by foot, bike, or bus brings that number down.

But for all we think about how much a gallon of gas costs, or how high our heating bill is come wintertime, the bulk of American energy consumption doesn’t even take place in our homes or cars. That becomes startlingly clear when you look at the “winner” of WalletHub’s study: Washington, D.C. Our nation’s capital ranked lowest for total energy costs per month at only $223. But, per capita, the District of Columbia consumes more energy than one-third of all other states.

How is that possible? It’s not as easy as saying that energy there is cheap. It’s because residents (and tourists) aren’t paying for the energy they use the most—the kind they access when they’re out of the house, taking advantage of the air conditioning or lighting when they’re visiting shops, museums, and monuments. According to the U.S. Energy Information Administration, “In 2014, 76 percent of retail electricity sales in the District of Columbia went to the commercial sector, and only 2 percent went to the industrial sector, reflecting the District of Columbia's large concentration of government buildings and museums as well as other commercial activity.”

When we limit our perception of our energy use to what we can be billed for, it becomes easier to ignore how reliable our region’s infrastructure is, or even the average hours of sunlight a building gets per day—and whether it’s absorbing that extra heat, or turning it into energy via solar panels. Any one of these factors could catapult our consumption levels in either direction. It’s also necessary for us to be mindful of what the Washington Post has called the “social costs” of consuming energy. Sure, they’re not as easy to tally, but their consequences can have significant impacts on the general public, because they so vastly increase the rate of pollution and even public health.

A coal power station in Florida. Image via user Wknight94 from Wikimedia Commons.

Coal, for example, which accounts for 45 percent of America’s electricity use, is our nation’s cheapest source of energy. But working conditions in coal plants have been blamed for thousands of deaths, and hundreds of thousands of illnesses. The real “cost” here is shorter lives—or, if you really want to quantify it, higher medical bills. If we were to include these things in the equation that determines how much we pay for our energy, our coal consumption rates would increase from 3.2 cents per kilowatt hour to 8.8 cents per kilowatt hour, ultimately making coal more expensive than wind or nuclear power.

WalletHub’s ranking was positioned as a relocation guide for the energy-conscious consumer. (If you’re curious, Connecticut’s in last place, at $410 a month.) But without considering all the moving parts of energy usage and living costs, it provides only a partial picture of an area’s true energy expenses.

It doesn’t have to be hard to reduce our dependence on energy at home. Murphy, for one, has stopped taking frequent showers. The Natural Resources Defense Council (NRDC) and the United States Environmental Protection Agency (EPA) suggest looking for Energy Star products to replace common power-sucking appliances like refrigerators and washing machines. The NRDC also offers device-based guidance, advising us to turn things off and unplug them when not in use. The EPA says to consider switching to a ground-source heat pump and light-color roofing.

Perhaps more importantly, we can be more demanding about the places we spend most of our money and time. At the office, we should try to encourage a switch to LED lights; we can frequent museums that make use of rooftop gardens or solar panels to off-set their energy usage. We can vote with our dollars and with our behavior. Such strategies should be able to reduce our consumption—and our reliance on unsustainable energy practices—substantially.

Illustration by Brian Hurst

Julian Meehan

Young leaders from around the world are gathering at the United Nations Headquarters in New York Saturday to address arguably the most urgent issue of our time. The Youth Climate Summit comes on the heels of an international strike spearheaded by Greta Thunberg, the 16-year-old climate activist from Sweden, who arrived in New York via emissions-free sailboat earlier this month.

Translated from Swedish, "berg" means "mountain," so it may feel fated that a young woman with Viking blood in her veins and summit in her name would be at the helm. But let's go out on a limb and presume Thunberg, in keeping with most activists, would chafe at the notion of pre-ordained "destiny," and rightly so. Destiny is passive — it happens to you. It's also egomaniacal. Change, on the other hand, is active; you have to fight. And it is humble. "We need to get angry and understand what is at stake," Thunberg declared. "And then we need to transform that anger into action."

This new generation of activists' most pernicious enemy is denial. The people in charge — complacent politicians and corporation heads who grossly benefit from maintaining the status quo — are buffered from real-life consequences of climate change. But millions of people don't share that privilege. For them, climate change isn't an abstract concept, but a daily state of emergency, whether it comes in the form of "prolonged drought in sub-Saharan Africa…devastating tropical storms sweeping across Southeast Asia, the Caribbean and the Pacific…[or] heatwaves and wildfires," as Amnesty International reportsare all too real problems people are facing on a regular basis.

RELATED: Greta Thunberg urges people to turn to nature to combat climate change

Keep Reading Show less
The Planet

Millions of people in over 150 countries across the globe marched for lawmakers and corporations to take action to help stop climate change on Friday, September 20.

The Climate Strikes were organized by children around the world as an extension of the of the "Fridays for Future" campaign. Students have been walking out of classrooms on Fridays to speak out about political inaction surrounding the climate crisis.

"We need to act right now to stop burning fossil fuels and ensure a rapid energy revolution with equity, reparations and climate justice at its heart," organizers say.

There's no doubt the visual images from the marches send a powerful message to those on the ground but especially those watching from around the world. GOOD's own Gabriel Reilich was on the scene for the largest of the Climate Strikes. Here are 18 of the best signs from the Climate Strike march in New York City.

Keep Reading Show less

September 20th marks the beginning of a pivotal push for the future of our planet. The Global Climate Strike will set the stage for the United Nations Climate Action Summit, where more than 60 nations are expected to build upon their commitment to 2015's Paris Agreement for combating climate change.

Millions of people are expected to take part in an estimated 4,000 events across 130 countries.

Keep Reading Show less
The Planet
via Apple

When the iPhone 11 debuted on September 10, it was met with less enthusiasm than the usual iPhone release. A lot of techies are holding off purchasing the latest gadget until Apple releases a phone with 5G technology.

Major US phone carriers have yet to build out the infrastructure necessary to provide a consistent 5G experience, so Apple didn't feel it necessary to integrate the technology into its latest iPhone.

A dramatic new feature on the iPhone 11 Pro is its three camera lenses. The three lenses give users the the original wide, plus ultrawide and telephoto options.

Keep Reading Show less
via I love butter / Flickr

We often dismiss our dreams as nonsensical dispatches from the mind while we're deep asleep. But recent research proves that our dreams can definitely affect our waking lives.

People often dream about their significant others and studies show it actually affects how we behave towads them the next day.

"A lot of people don't pay attention to their dreams and are unaware of the impact they have on their state of mind," said Dylan Selterman, psychology lecturer at the University of Maryland, says according to The Huffington Post. "Now we have evidence that there is this association."

Keep Reading Show less