Why Gas is Charlie Sheen to Electricity’s Dick Clark

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Over at NRDC’s Switchboard blog, my friend Max Baumhefner has a pretty cool little electric-car-related post comparing oil prices to electricity prices over time. The whole thing is worth reading; there’s a lot of great detail and chart renderings to geek out on if that’s your thang. But the basic point is that while oil prices jump up and down in accordance with geopolitical events, electricity prices remain relatively stable.

Check out this chart by the Energy Information Administration (EIA):

Now look at this chart about electricity prices over the same time period:

You can see that electricity doesn’t correlate nearly as much with the news, but it’s a little hard to compare since the Y-axes are so different. Here’s how Max sums it up:

Electricity is made from a diverse supply of largely domestic fuels, and its price is closely regulated by public utilities commissions.  Accordingly, the price of electricity doesn’t care if workers strike in Venezuela or if rebel forces make progress in Libya.  When Iraq invaded Kuwait in 1990, the price of oil spiked, and the price of electricity continued a gradual twenty-year decline. While the price of oil increased almost tenfold following the Asian economic crisis in 1997 until its peak in 2008, the price of electricity increased about 12%. 

In short, the price of oil reads the morning’s headlines and freaks out, while the price of electricity is blissfully ignorant and kinda boring. Which would you rather depend on to fuel your car?

Or as another friend who has a way with celebrity analogies put it, oil prices are like Charlie Sheen to electricity’s Dick Clark. Eh? 

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

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As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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