Energy and Our Daily Lives
Energy Costs, Events, and the Economy
Oregonians spent more than $12 billion on energy in 2020—from electricity and natural gas used in homes and businesses, to the fuels that run our vehicles. The methods of production and delivery of energy to consumers varies widely. Depending on the type of energy, there are varying levels of state and federal price regulation and opportunities for policymakers to affect end-use costs to consumers.
There are three main types of energy that most Oregonians typically use daily: electricity, natural gas, and gasoline. Each varies significantly in its physical characteristics, industry composition, and regulatory structure. These differences have an impact on the extent to which state policymakers can influence retail prices for Oregon consumers. A little talked-about benefit of electrification and electric vehicles is moving consumers from gasoline—a fuel whose price is unregulated—to electricity, a fuel whose retail price is regulated either by the Public Utility Commission or by local elected boards. Unlike with gasoline, state regulators and elected boards play a central role in setting retail prices for electricity, which can provide a valuable safeguard for consumers.
More on Consumer Energy Cost Drivers
Average Cooling Types Across Oregon Homes
Average Heating Types Across Oregon Homes
Agriculture and electrification
An electric Soletrac tractor. Photo: Wy’East RC&D
Electrifying equipment and vehicles in the agricultural sector can reduce pollution and greenhouse gas emissions from fossil fuels and save energy costs for farmers and ranchers. While electric tractors have so far received the most legislative discussion in Oregon, there are several other important on-farm fossil fuel uses that could be electrified now and in the near future. In some cases, electric equipment is already available, like electric heat pumps for space heating, electric forklifts, and robotic dairy feeders. Electric vehicles like pickup trucks, utility vehicles, and small tractors are new to the market with long waiting lists of potential customers despite higher upfront costs than gas- or diesel-powered versions. Electric and hybrid versions of heavier farm vehicles are still in the research phase and not yet commercially available, while researchers are also exploring options for post-harvest crop processing using electricity. The pace of technological innovation and development in the sector has accelerated in recent years, with researchers developing precision agricultural techniques and autonomous equipment incorporating sensors, wireless communications, and in some cases battery-powered devices such as robots and drones.
Major Events
War in Ukraine
Russia is one of the top three crude oil-producing countries in the world (alongside the United States and Saudi Arabia). As a result, the global instability in crude oil markets created when Russia invaded Ukraine in early 2022 contributed to the national average gasoline price spiking from about $3.35 to over $5.00 per gallon between January and June 2022.37 A price for a barrel of crude jumped from approximately $75 to over $125 in the same period.
Enbridge Natural Gas Pipeline Rupture
A rupture of a gas transmission pipeline between British Columbia and Washington state in October 2019 sent local natural gas prices skyrocketing as the supply of natural gas sharply decreased. Average next-day prices at the Sumas Hub were in the range of $2 to $3 per million British thermal units but rose to $9.55 per million Btu in the weeks following the rupture.
Summer 2021 Pacific Northwest Heatwave
During June 2021, the Pacific Northwest suffered through an unrelenting heatwave that set records for both its severity and length. Portland recorded a temperature of 115 degrees at the heatwave’s peak. During this record heat, wholesale electricity prices in the region climbed 435 percent. The large increase in prices was driven by higher demand for electricity, largely from the widespread and prolonged use of air conditioning. Consumers were spared the real-time increase in price, as retail rates help to insulate consumers from this type of volatility in wholesale prices.
Over $12 billion
Oregonians spent on energy in 2020.
25.2%
Residential sector’s share of Oregon’s energy use in 2020.
1.6 Million
Number of occupied housing units in Oregon in 2020.