WHY LOCAL ENERGY?

A scant 100 years ago, communities throughout America were still predominantly self-reliant. Residents grew their own food and purchased locally made goods from area merchants. Even energy needs were met locally, with farm animals and human muscle serving as the primary energy sources. But by 1950 the gasoline-powered tractor had revolutionized farming, and during the years that followed, the economy was transformed by plentiful, cheap supplies of oil and natural gas. Using fossil-energy resources enabled rapid economic growth, and the loss of local self-reliance surely seemed an insignificant price. Economic expansion continued even after America's production of oil and natural gas peaked in the early 1970s, but the depletion of our domestic oil and gas supplies has left us precariously dependent on imported energy resources. We now import about 60 percent of our petroleum and 16 percent of our natural gas, and America's energy self-reliance is a thing of the past.

The problem of losing our self-reliance in energy is becoming increasingly apparent as crises develop within the oil and gas industries worldwide. Although the U.S. has depleted its energy reserves further than any other country, more than half of the world's oil-producing countries have passed their peak of production and are now in permanent decline. New oil discoveries have meanwhile slowed to the point where four barrels of oil are consumed in the time it takes to find a single one. The natural-gas industry in the U.S. is also in steep decline, with production from existing gas wells now falling at an alarming 29 percent per year, and drillers unable to bring new wells online fast enough to offset this loss. The new wells they do bring on line produce much less gas than the ones they replace, and despite all-out drilling efforts, U.S. gas production now appears to be declining at about 2.5 percent per year.

The result of continued dependence on these troubled industries has been destabilization. As supplies of oil and gas have become tighter, market prices have spiraled out of control. In the fall of 2004, crude-oil prices in New York rose to about $55 a barrel, an all-time record for the NYMEX exchange. Wholesale natural-gas prices in the U.S. are nearly three times what they were five years ago, and are expected to go much higher as the crisis deepens. High energy costs are extremely damaging to our already weakened economy. Efforts to shore up the economic situation through relaxed environmental regulations, shifts to coal and nuclear technologies, and increased drilling in sensitive wildlife areas are increasing risks to our health and our environment.

Perhaps the most destabilizing influence has been the concentration of geopolitical power in the Middle East, where the world's richest remaining oilfields are located. The Middle East is the only region still capable of increasing oil production sufficiently to delay the onset of world oil decline-and thus world economic decline. Tensions in and around this region are understandably high.

Recognizing the dangers of continued dependence on unstable resources, communities throughout the world have already begun putting their local energy resources to work. The city of Reykjavik, Iceland, built a geothermal-powered district heating system to provide heat for all 160,000 residents of the surrounding community. Austria has installed more than 300 biomass-fueled district heating plants in its rural villages.

Here in the U.S., progress has been slower. Vermont is leading the way with wood-chip heating systems now installed in 23 public and private schools. While this is a good start, implementation of local renewable-energy projects must increase dramatically if we hope to neutralize the threat of ever-increasing instability.

For more information, visit our FAQ page