With the price of crude oil hovering around $50 a barrel, the energy pinch in the United States is being felt, especially within the University of Wisconsin System. According to Darrell Bazzell, the vice chancellor for administration at the Madison campus, the UW System has accumulated a shocking $30 million utilities deficit in the past year.
“We are just trying to pay our bills,” Bazzell said. “But the money that is allocated for the UW System just isn’t enough.”
Bazzell, who worked on conservation issues at the Capitol for 20 years, oversees the physical plants at the Madison campus and works with budget drafters to create a reasonable energy budget.
Currently in the U.S. market, the supply of crude oil is not meeting demand and it is proving a big problem within the university system. With continuing price hikes on the horizon, a solution seems impossible, according to Bazzell.
“We have nowhere to go,” Bazzell said. “We can’t just shut off the heat completely, especially in some laboratories on campus — they have room-temperature regulations.”
“We use a variety of fuels to heat the university because we know price spikes are a reality,” said director of the physical plant at UW, John Harrod. “Right now we are using a lot more coal to compensate for the jump in oil prices … we even mix in recycled paper pellets from Wisconsin’s own paper industry.”
The UW System is currently run on a biennial budget allowing budget-makers to try and rectify flaws from the past budget fairly quickly.
“Frankly, I don’t know how we are going to make up the deficit,” Bazzell said. “We also need to worry about this year. But, don’t worry. It would never come directly from tuition.”
Bazzell said the deficit might take quite a while to remedy. The budget committee meets in the beginning of January and intends to take a deeper look into current budget allotments.
“We are a large campus. We consume 70 percent of the energy throughout the whole UW System. Twenty years ago, the utilities budget remained the same year after year and so did the utilities cost,” Bazzell said. “Now our utilities budget is what it was 10 years ago, while prices have skyrocketed.”
According to UW’s budgetary guide, the Redbook Magazine, the current utilities budget for the UW System is at about $56 million, down from the past 2003-04 year, when the utilities budget was $58 million.
“The trend the budget is taking doesn’t match up with the trend [fuel] prices are taking,” Bazzell added.
For the budget drafters in Madison, the price relief seems to be nowhere in sight. The Organization of Petroleum Exporting Countries (OPEC) is trying to accommodate for increased demand. The organization has increased production levels to one million barrels a day as of Nov. 1. However, the oil-producing Gulf of Mexico is still recovering from a barrage of hurricanes assaulting the area during late summer and early fall.
Although UW uses oil, it is not the only fuel utilized on campus. The Madison campus physical plants use a variety of fuels including natural gas, ground tires and coal, according to Harrod.
The current price of coal per unit is around $3.73, which is still relatively high for the characteristically steady coal market.
“When prices are high we have to weigh what to do,” Harrod said. “Using the cheapest alternative usually wins.”
Growing concerns for energy efficiency have come to the forefront on the UW campus. Abbie Klostermann, a UW junior majoring in landscape architecture, said she was shocked to find out how much the deficit was.
“It seems like there is no good solution because the University already is really energy efficient,” Klostermann said.
Bazzell added the aggressive energy efficiency push on the Madison campus is helping with the utilities cost, but not nearly enough.
Bazzell also said the target request for the budget committee is the utilities budget and the projected solution for the $30 million deficit.
“We are tying to look toward the future, what would be beneficial in the long run,” said Bazzell. “But in the meantime, $30 million is a lot of money.”
