In a study released April 7 by the Small Business and Entrepreneurship Council, Alabama ranked No. 23 in energy costs.
"It's pretty much the middle of the pack," said Raymond Keating, chief economist with the Small Business and Entrepreneurship Council.
"If you break down the individual measures, in terms of electricity costs and gas prices, Alabama does come in a bit below the national average, which is good."
According to sbecouncil.org, the cost of energy is determined by many factors, including economic growth and the development of resources.
"We looked at two key energy cost measures," Keating said. "One is the price of gasoline at the pump and a second is electricity costs, and we get the number there in terms of kilowatts. We do an index on both and combine into one larger energy cost index."
Yvonne Taylor, macroeconomic analyst for the Energy Information Administration, said multiple types of energy sources are considered when figuring energy costs.
"All kinds of petroleum products, like all the gasoline, all the natural gas, coal and all the renewable energies (are counted)," Taylor said. "Nuclear fuel is also included."
Taylor said the government also affects energy costs with regulations and taxes.
"There are a lot of regulations and legislations that affect energy consumption," Taylor said. "There are taxes, which affect prices, and there are subsidies."
James Barth, Lowder eminent scholar in finance, said there has been a push for alternative sources of energy.
"Right now, coal is our major source of energy, but people are concerned about the pollution that coal causes when you burn it," Barth said, "and people are somewhat concerned about nuclear power plants, so (they) are pushing for alternative forms of energy."
Barth said the biggest problem today is that highways and interstates don't have an electricity grid, which the U.S. can use to get energy where it's most needed.
"We need an electricity grid, a grid to get the energy to where the people are who will be using it," Barth said. "President Obama's administration (is) pushing for, and there's money to be devoted to building that grid."
If this happens, Barth said, the grid can help lower energy costs in general, including in Alabama.
Keating said he thinks in order for Alabama to lower its ranking, lawmakers need to look at their tax regulatory issues.
"That's where I think that we could see some changes," Keating said. "Lawmakers should take a look at this -- we're in the middle of the pack. How can they improve things?"
According to sbecouncil.org, in comparison to other Southern states, Alabama is still around the middle of the pack.
"It is important to think of it just beyond the neighboring states," Keating said, "because labor and capital are so mobile today that Alabama's not just competing with immediate neighbors, but with the rest of the nation and really the globe."
Do you like this story? The Plainsman doesn't accept money from tuition or student fees, and we don't charge a subscription fee. But you can donate to support The Plainsman.
