In 2011, the average American spent $732 to heat their home with natural gas. In contrast, they spent $2,535 to heat their homes with oil. Ouch!
That’s a recipe for bankruptcy.
It’s also pretty good example of why specialization can hurt you.
How?
By specializing on oil to heat their homes, these homeowners made themselves acutely vulnerable to changes in the price of oil. So when oil prices spike as they do whenever there are disruptions in the Persian Gulf or Nigeria, people that are reliant on oil to heat their homes pay a high price for specialization.
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The sad fact is that these oil heat customers are in no way unique. Most people are specialists when it comes to energy.
For example. Answer this question: How many types of energy do you purchase?
It’s a good guess that you said two. Gasoline and electricity.
In northern climates it may be three. There we tend to see more use of natural gas, oil, or wood for heating. Regardless, it’s pretty safe to make the claim that we are all somewhat specialized in how we consume energy.
But, as we have seen, specialization can be dangerous.
It’s easy to understand why specialization is so popular. It’s efficient. The equipment needed is less costly since it is optimized for a specific fuel.
However, as we will see again again, specialization has one fatal flaw:
During periods of rapid change — economic to environmental — a specialized strategy to energy consumption can be extremely disadvantageous to your economic health, particularly at the individual level.
Worse, it can get bad overnight.
Israel could decide to attack Iran tomorrow and the price of oil could go through the roof in response. At that point, if you need to buy oil to heat your home, your options are limited. You either pay the price, or freeze.
Fortunately, there is an approach that can provide you with a much higher level of energy security.
Here How and Omnivorous Approach to Energy Can Improve Your Situation
In a perfect world, we would be as omnivorous with energy consumption as we are with food.
If we were truly energy omnivores, we wouldn’t care much if oil prices spiked due to a war with Iran. We’d simply switch to the less expensive and more plentiful alternative if some source of energy became too expensive or unavailable.
What’s required to be an energy omnivore? The ability to:
- produce a home’s electricity from a variety of fuels.
- heat and cool a home with oil, wood, natural gas, passive solar, electricity, and geo-exchange.
- power a vehicle with gasoline, natural gas, diesel, bio diesel, and electricity.
As you can see, this is a pretty extensive list. It’s likely much more expensive to implement than most people can afford at the individual level. Further, much of this omnivorous production might be best done at the community level rather than at the household/complex level.
Given the hurdles and complexities involved, let’s treat this list as a touchstone. Something to guide our efforts over the long term. We won’t get there overnight, but we’ll get there with some clever thinking and hard work.
Let me know what you think about it.
Your omnivorous analyst,
John Robb
PS: Omnivorous food consumption has proven to be a very resilient energy strategy — it successfully kept homo sapiens out of Darwin’s abattoir when a more specialized/optimized strategy would have failed. An omnivorous strategy shines during periods of stress and change, which is what we are headed into.
PPS: Currently, centralized electricity production is relatively omnivorous. It’s generated by everything from nuclear power to solar to hydro to natural gas to oil to wind. However, this production is both remote which makes it vulnerable to disruption and changes very slowly. It also represents a very small portion of our total energy consumption (15%), a percentage that is unlikely to change given an inability to build new delivery infrastructure to meet demand growth.
