Energy Is Everywhere: Nearly half of what people pay for energy comes from food and health care
Nearly half of what people pay for energy comes ‘embodied’ in the various goods and services that they use, and about half of that comes down to two things: food and health care.
Editor’s note: This is part three in a series of essays on energy system dynamics and energy policy.
There is no substitute for energy. The whole edifice of modern society is built upon it … It is not “just another commodity” but the precondition of all commodities, a basic factor equal with air, water, and earth.—E. F. Schumacher, 1973
Energy costs are experienced in many ways in American society. There is, of course, the cost of energy you pay for directly, such as your monthly electricity and gas bills, gasoline, and so on. But people also pay for energy that they consume indirectly — that is, in the goods and services they consume.
According to the last Residential Energy Consumption Survey, the average American household in 2005 spent about $1,800 on non transportation-related energy use, including electricity, natural gas, fuel oil, kerosene, and liquid petroleum gas. About $1,122 of that was spent on electricity, $471 was spent on natural gas, and $115 was spent on fuel oil. The amount spent on kerosene was relatively trivial. On top of that, the average American household in 2005 paid about $2,000 per year for gasoline. Considering that the average household income was about $46,000 in 2005, direct energy expenditures would have consumed a little over 8 percent of the household budget.
But that’s just the beginning of America’s energy bills. In addition to the direct use of energy, Americans consume a great deal of energy indirectly. Consider a simple cotton T-shirt. Energy is used to grow and harvest the cotton. More is used to transport that cotton to a factory. Still more energy is used to process the cotton, bleach, and dye and to weave the cotton into cloth. More energy is used to package the T-shirt, get it to a store, and so on. And that’s only the tip of the energy iceberg, because it took energy to make the machines used throughout the process, as well as the dyes and chemicals. And we haven’t even mentioned keeping the lights on at the various factories, moving the workers around, powering the looms, using the washing machines, and so on. All of the energy used at each stage of production factors into the final price you pay for whatever good or service you consume.