Saturday, May 01, 2010

Investment in Energy Efficiency--the everybody wins solution!

I believe that April 2010 is a perfect illustraion of all that is wrong with our national energy policy which I can only describe as "produce more at any cost".

April started with President Obama opening up "vast" new areas for offshore drilling (actually that was the tail end of March), in order to entice a few Republicans into supporting a climate bill. This legislation looks to be in serious trouble in any case.

That was quickly followed by the Massey Energy mine disaster which killed 29, and since news reports were so focused on finding any possibly trapped survivors and the raw emotion of the families involved, I have no idea how many were injured. Obviously this was tragic, but it is hardly surprising given the industry, the company and even this particular mine's astonishing tally of thousands of safety violations and millions in unpaid fines outstanding. There was also a much smaller mine accident that killed 2 more miners last week.

Then came the British Petroleum contracted drilling platform explosion in the Gulf of Mexico. This disaster is still unfolding, but while the immediate human death toll is *only* 11 (gosh that seems so wrong to say that *only* 11 platform workers died), with another 17 or 18 injured. The cause is completely unknown at this point but what is clear is that the enivornment of the entire Gulf coast is taking a massive hit--on all fronts. The livelyhoods of millions are already begining to be negatively impacted. The spill rate now estimated at 200,000 gallons/day (5,000 bbl/day) seems to grow daily and all effort to slow the leaking oil are coming up duds. People are rightly asking if this is bigger than the Exxon Valdez spill. The answer appears to be a clear maybe, but we won't know for weeks maybe months.

While there is always the macabre fascination with dwelling on the details of each gristly incident, the reason for this post is to re-iterate the fact that we need to change this equation.

How? We could change the equation by investing massively in energy efficiency. Everyone that knows anything about energy use in this country will tell you that the fastest payback of any energy expenditure is that spent on efficiency. Amory Lovins of the Rocky Mountain Institute likes to say that energy efficiency is not the low hanging fruit, it is the fruit that is already lying on the ground waiting to be picked up. While an investments in energy production will take years or decades to pay off, many energy efficiency investments pay themselves back within months or a few years at the longest. (Months? *you ask in disbelief* Yes months *point to energy efficient light bulbs*)

We should rename the Department of Energy (DOE), the Department of Energy Efficiency (DOEE) and re-task it with developing our vast--yet largely unexplored--energy efficiency reserves.

At an absolute minimum we as a country should take 1% of what we spend on imported energy each year (i.e. several billion $) and use that money to invest in R&D (20%) on new more efficient technology and in deploying the already existing energy efficiency technologies (70%) and in paying producers to design more efficient products in the first place (10%). The long term benefits to our nations finances, our national security, our environment and even our health and general wellbeing will be out of sight!

Why is it that every oven vents into the house in summer? and no refrigerator takes air from outside in winter? Compared to solving the nuclear waste disposal conundrum it would be trivially easy to build kitchens in a way that exhausts heat from appliances outdoors in summer and uses outside air to reduce the cooling load of fridges and freezers in winter. All you need is a little bit of ducting and a fan! Yet nobody is in charge of these interfaces and so we use energy to freeze water in winter and air-condition ovens in summer. I just pick this example because it is one that everyone can relate to. There are many many business specific examples, one that leaps to mind is the energy cost of cooling computer server "farms" in winter. Why not harness the extra heat from the servers to pre-heat water for general use?

Why not let every home or business install a heat exchange interface with the water main? This would let them pull heat or dump heat into the millions of gallons of water that flow under our feet every day--micro-hydro-geothermal. To the extent these millions of gallons of water increase a few degrees in temperature (and I would suggest that reasonable limits be set on any such scheme) that would reduce the energy needed to heat the water from the water mains that goes into each homes, water heater/boiler. I throw these ideas out, not as full fledges solutions, but as simple examples of trivial things that we could do if we all had different incentives.

The beauty of energy efficiency investment is the fast payback. You start saving money on energy immediately. It is like a permanent tax cut for the person making the investment, except everyone in the economy benefits as the upward pressure on energy prices is reduced. (With a normal tax-cut only the person(s) recieving the cut benefits, and everyone else pays more!--or recieves less.)

Efficiency investments are "shovel ready" and the US workforce already had 90% of the necessary skills. These are jobs we can start doing today. Maybe we can do extra training for the guys wearing the toolbelts, but most people who already work in the trades, the salesforce, the purchasing, and accountants, the stock-keeping, the shipping departments etc. can just apply their existing skills to deploying these efficient technologies.

Economy wide investments in energy efficiency strengthen our balance of trade (as we spend less on imports and effectively export the energy we would have used) and better position us to repay our international lenders. If we as a country reduce our energy bills (just like each household) that leaves more money to pay all the other bills that remain.

Efficiency investments reduce our need to import massive amounts of energy from unstable parts of the world, and our need to secure these import routes. Efficiency investments reduce our vulnerability to supply disruptions, and our need to send our children into harms way. Becoming more energy efficient increases our national security.

And returning to the start of this post, investing in energy efficiency will reduce the need to squeeze energy out of every rock we can find or every hole in the ground we can make. Will we still need energy? YES. Hell yes!, but if we are not pressing the accelerator pedal all the way to the floor, we have more time to plan a safe route, and in the event of an accident we will have more time to react to aviod a sudden guard rail or ditch, by not going full throttle.

And finally we will never have to fear the headlines that energy efficiency will bring. Just imagine this headline: "NegaWatt Bomb explodes in Washington DC--saving taxpayers billions! Details on page 3".


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