Strategic Issue 5.

Each year Missourians consume almost 1,800 trillion British Thermal Units (Btus) of energy at a cost of more than $11.5 billion. Much of this money leaves Missouri as more than 95 percent of the conventional fuels we consume come from outside the state. If all forms of conventional energy used – coal, electricity, natural gas, petroleum products, like gasoline and diesel fuel, and other fuels – were converted into a petroleum equivalent, our consumption would equal more than 310 million barrels of oil. That translates into each Missouri resident using an average of 57 barrels annually. To provide a sense of scale (based on Btu content), 57 barrels of oil can run 387 color televisions or 744 home computers for a year.

Energy use plays an integral role in Missouri's ability to improve economic prosperity. It also greatly influences the quality of our environment. When we use energy more efficiently, energy costs are reduced and the resulting savings can be used for other purposes. Lower energy use also reduces power plant emissions that are harmful to human health.

Energy operating costs
Greater efficiency should increase the dollars of products created for a given amount of energy. The data from 1992 through 1997 indicate that output per energy input has moved in a generally positive direction during the past few years. Increases in this ratio may also reflect simultaneous improvements in energy efficiency and shifts away from energy-intensive manufacturing industries. Dollars of gross state product per dollar spent for production, rather than energy use measured in Btus, show that output per energy expenditures fluctuated during the past few years. Energy expenditures also would be affected by energy prices. If prices decrease, the trend looks positive (greater efficiency); if energy prices increase, the trend looks worse.

Data from 1992 through 1997 indicate a mixed, but generally upward trend in energy use per capita in Missouri. An increase in this ratio probably means that Missouri citizens have become less efficient in their use of energy. The mixed pattern of increases and decreases may reflect countervailing trends for different uses, for example, improvements in appliance efficiency balanced by increased use of sport utility vehicles for personal travel. An increase could also mean a new energy-intensive technology such as personal computer use is introduced representing a change in the energy intensity of personal lifestyle rather than a change in the efficiency of energy technologies that were already in place.

Data from 1992 through 1995 indicate a generally downward trend in energy expenditures as percent of disposable personal income. This contrasts with the upward trend of per capita energy use noted above. The downward trends in expenditures as percentage of disposable personal income may reflect efficiency gains in some end uses but also probably reflect increased disposable income and falling energy prices, particularly gasoline and electricity prices during these years. This trend will be affected in future years due to the increasing prices and volatility of gasoline, electricity and other fuels.

State government energy expenditures
When state government uses energy more efficiently, its energy costs are reduced and the resulting savings of taxpayer dollars can be used to cover other operating costs necessary to deliver goods and services to Missouri citizens. A decrease in the ratio of state energy expenditures to total operating expenditures could reflect greater energy efficiency by lowering energy's slice of total operating expenditures. Expenditure data indicates that the ratio of state energy expenditures to total operating expenditures has generally decreased in the past few years. This positive trend could reflect a combination of factors – genuine gains in operating efficiency, growth in total state operating expenditures and decreases in energy prices relative to the general price index.

In state buildings, the ratio of actual energy savings to potential savings indicate that much more can be done to further reduce state government's energy expenditures. By installing cost-effective measures, energy costs can be reduced an average of 25 percent.

Additional efficiencies can be attained in state vehicle fleets as well. Fleet efficiencies are required by statute to meet federal fuel-economy standards of 27.5 miles per gallon for passenger vehicles and 20.5 miles per gallon for light-duty vehicles. In 1999, Missouri's fleet of eligible vehicles stood at 24.4 miles per gallon for passenger vehicles and 16.1 miles per gallon for light-duty vehicles.

Diverse energy resources
Diversifying energy sources for electricity generation as well as for transportation will provide benefits to the nation and to Missouri by reducing our vulnerability to volatile oil markets, increasing the competitiveness and reliability of U.S. businesses and energy systems and improving the environment through less harmful energy production. Clean domestic energy choices for power generation, including solar, wind and biomass, can improve efficiencies and avoid costly expenditures on transmission and distribution equipment by siting these technologies close to the point of consumption.

In Missouri, fossil fuels represent approximately 93 percent of energy consumed; nationally, fossil fuels represent 85 percent. Nuclear represents 5 percent of the energy used in Missouri. Solar, wind and biomass sources of energy represented 1.1 percent in 1997. These statistics represent a decline from a high of 1.4 percent in 1995.

To diversify energy choices, public policies to remove market barriers, such as incentives for commercialization should be adopted. Like all emerging technologies, renewables lack infrastructure and their initial costs are often higher because of a lack of economies of scale.

Promote energy efficiency and diverse energy supplies to protect the environment

Outcome A.

Decreased energy operating costs for Missouri's firms, farms, families and communities

Outcome Measures

Objective 1

Increase the weatherization of low-income households from 135,000 households to 141,000 households by fiscal year 2005.

Objective Measures

Return to Table of Contents