Eight ways $100 a barrel oil may affect you

Here are eight ways that higher energy prices are starting to affect America.

6. Renewable energy: Not as big a boost as you’d think

Ann Hermes/Staff
A wind energy installation, pictured in March 2011, is part of a farm in Fond du Lac County in Wisconsin.

Do high prices for oil help in the development of alternative renewable fuels, such as solar, wind, and bio- fuels?

Yes and no.

The market for corn ethanol is benefiting because it is now considerably less expensive than gasoline. But wind and solar power are used principally to generate electricity, which means they compete more with coal and natural gas than with oil.

Still, a jump in gas prices gets Americans – and their elected officials – thinking about the need for alternative fuels, says Nathanael Greene, director of renewable energy policy at the Natural Resources Defense Council in New York.

“There’s a psychological effect that’s clearly impacting Washington, D.C., and will trickle out more broadly the longer [high] prices are sustained across the country,” he says.

In the short term, that pressure “may be enough to extend some of the really critical [alternative energy] incentives that we have, especially at the federal level right now.” He adds, “The federal government took some really important measures as part of the stimulus bill to help renewables through the recession.”

What’s holding back alternative fuels is the weak demand for electricity, says Rob Gramlich, senior vice president for public policy at the Amer-ican Wind Energy Association in Washington. “It’s down currently,” he says. “That’s one of the challenges renewable sources like wind have right now. Utilities are sort of waiting and seeing what the future is going to look like.”

That future could be one of much greater demand for electricity. As more electric-powered vehicles hit US roads, Mr. Gramlich says, wind-generated electricity will compete more directly with oil as a vehicle “fuel.”

Nuclear energy is also considered an alternative energy source, but its future is murkier than ever in light of events in Japan.

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