This is the era of Big Oil. Could the next be the era of Big Efficiency?


A new report by the American Council for an Energy-Efficient Economy suggests the possibility. Re-invented with today’s smart energy technologies, energy efficiency could displace 40 to 60 percent of our total energy needs by the year 2050, according to The Long-Term Energy Efficiency Potential:  What the Evidence Suggests.


Sound far-fetched?  ACEEE says history backs its assertion. Over the last 40 years we tripled the US economy, “and three-quarters of the energy needed to fuel that growth came from an amazing variety of efficiency advances—not new energy supplies,” said the report.  Energy forecasters at the time predicted we would be using far more energy than we do now. The advent of the computer, the Internet, energy savings appliances and other efficiencies saved us a lot of money and a lot of oil. In 1970, our economy required 15,900 British Thermal Units of energy to support $1 of economic activity; by 2010 we needed only 7,300 Btus.


But there is a problem in repeating this feat. Today’s energy policy begins with the premise that we need to build more power plants, more refineries and more delivery systems. We do not try to first achieve greater efficiency. In other words, we build more energy infrastructure before we try to wring more work out of each unit of energy we produce.  If we instead pushed efficiency first, the US could save $400 billion per year in energy costs, amounting to about $2,600 per household, according to ACEEE.


“The U.S. would prosper more if investments in new energy were not crowding out needed investments in energy efficiency,” said John A. “Skip” Laitner, ACEEE director of economic and social analysis.


In short, we are thinking small about efficiency, when we should be thinking big.


ACEEE further warns that the deck contains at least three jokers, or unwelcome wild cards, that could threaten our hand if we fail to pursue energy efficiency. These include 1) diminishing supplies of cheap and available energy; 2) a slowing rate of energy productivity and 3) climate change.


How do we keep the jokers buried? The report says it requires “a different recipe of technology investments” than we are now making.


“The question is will we choose to make those more productive investments?”  says ACEEE.


ACEEE’s full report is available here.

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Comment by Tom Mallard on February 6, 2012 at 11:21am

Adding that the underlying thought was that people on this list should consider learning how to collect-store-distribute heat and cold as part of their business along with raising the efficiency.

Nothing's cheap, the pvc pipes used for thermal-mass under the floor & wall to keep my little cabin warm will cost $1,000, but then it's the "heater" solar-gain is using to make it work on a daily basis to add that input.

Comment by Dave Conna on February 6, 2012 at 11:10am

In order for our political leaders to get it, we need to talk their language - and understand why they don't talk ours:

1) The word conservation has bad connotations to many - they think of cold houses, slower cars and deprivation.  (Never mind that cooler houses are generally healthier, slower cars would reduce traffic fatalities and we are so spoiled that deprivation means not being able to afford able, NOT whether or not you go to be hungry). The Republicans fully understand this: they renamed the inheritance tax the death tax - and suddenly Americans were against it. 

I'm not suggesting we become (what I would consider) dishonest) but I do suggest that we start talking about conservation in terms of healthy, more comfortable homes with better air quality and how much money we can save and remain competitive in the world market.  This leads to my next point about talking their language.

2) Conservation is the wisest investment with the quickest ROI.  If we included the externalities of health and environmental impacts, it is very clear to me that renewables beat all non-renewable energy sources (though that conclusion is harder to prove as there are some assumptions, value judgments and ethical considerations in that calculation).

So while we should continue to build the renewable infrastructure in order to displace the non-renewable energy sources (which are both more expensive and, by definition, limited), we short change conservation at our own peril because the economy that uses it's resources the most wisely is the one that has the lowest costs of production - and is able to win in the marketplace.

The enormous subsidies for fossil fuels and nuclear energy (both in terms of actual dollars and unpaid for societal effects) totally skewer the equation and, all other things being equal, result in ALL countries with those subsidies being less competitive than countries that do not.

The Union of Concerned Scientists (based in Cambridge, MA) has some information on the subsidies that various energy sources receive.  Obviously the issue is complex and there is disagreement on some of the assumptions and facts (I suspect there is a good deal of obfuscation practiced by the fossil fuel and nuclear lobbies as well) but we should educate ourselves on the issues involved and start spreading the word as quickly and accurately as we can.

3) Let's not forget the corrosive effects of money in politics.  We have to pursue campaign finance reform and repealing the Citizens United ruling as well.

In the meanwhile, we can feel very pleased that, when one considers these overwhelming odds stacked against the most intelligent course of action, we have made incredible progress.  If/when we do get the political system working the way it should, conservation and renewables will REALLY take off - at a pace that will astound all of us.

I only hope it is in time to avert the worst effects of climate change and to address the issues of peak energy as well.

Comment by Tom Mallard on February 6, 2012 at 11:03am

Consider beyond what efficiency can do, and that's to supply energy to lower the remaining grid demand for especially space-heating & hot-water.

Passive-solar is ancient, solar hot-water pre-heaters work so where are they being used in our architecture?

Regardless of how low the loss percentage is, aka how "efficient" a home is, if a home doesn't gain thermal energy when it's available to store & use then it's an energy sink, so requires energy inputs for space-heating and heating water.

Most urban settings will need collectors & thermal storage added, this can be separate from the building in a the best spot & piped around, when a home wasn't being built to take advantage of passive-solar this is a practical way to deal with it.

So given a great reduction in energy demand by conservation, if you add in basic daily solar-gain, done properly it'll take the home off-the-grid for heat needs most of the year. Subsidize those first!!

Comment by Joseph Novella on February 6, 2012 at 10:35am

I am astonished when political candidates bang their fists exclaiming "drill, drill, drill" and NOBODY in the news media or surprisingly their opponents mention the option of conservation. We have lost touch with the most basic concept of energy consumption. It is a two sided equation i.e. supply=demand. Look at the recent controversy over a new oil pipeline from Canada that would bisect the U.S. Not one news pundit even thought to say that a small effort in conservation would actually eliminate the need for more oil infrastructure. The public debate is stunted, ignorant, and manipulated by special interests.

Comment by tedkidd on February 6, 2012 at 10:33am

The cheaper the energy input, the less efficiency efforts justify.  In order to effectively drive efficiency demand we need more energy cost certainty, or at least minimum cost certainty.  

In a competitive economic environment, efficiency efforts need to justify.  There needs to be incentive, or their implementation causes competitive disadvantage.  Wide swings in price and future price uncertainty are an impediment to major efficiency investment as efficiency efforts that justify must do so significantly given price uncertainty.  

Removal of subsidies for non-renewables, utility and efficiency program incentives and ability to prove delivery capability (energy tracking) would cause paradygm shift in the way our country views energy efficiency.  Even simply implementing automatically resetting price floors would have tremendous impact.  

Our biggest competitor is the promise of infinite cheap energy - "frac baby frac" and the current huge decline in Natural Gas prices has really hurt our industry.  

We really need an Energy Policy, and it needs teeth.  The problem is policies that achieve our long term best interests appear very unpleasant to the uninformed, which is the majority of our populace.

Comment by Bob Blanchette on January 21, 2012 at 11:51am

Bud, in our area electricity is significantly CHEAPER in winter than summer. No TOU rates for winter, all electricity over 600KWH is HALF PRICE. This makes even strip heat competitive with gas once meter fees/base charges are accounted for. OG&E is more concerned about summer generating capacity since winters are relatively mild here. The way the rates are structured I've even considered going all electric to eliminate the $26/mo base charge for the gas meter. Going all electric would require replacing the HVAC and water heater, not economical to switch unless they are in need of replacement anyway.

Comment by Bud Poll on January 21, 2012 at 11:39am

Bob,  There is at least one company out there using ceramic bricks to store extreme temperature heated by electric, thus lots of btus, and a good match for off peak timing.  In my state our rates are out of sight and no smart meters as yet, so they have to apply to the puc to be allowed to install timing systems to accomplish the off-peak shift.  Smart meters and high/low pricing would make that an easy system.  Our electric costs are still way out of line vs oil or gas, but in many areas of the country, electric is competitive, thus the extra savings would make it a win.

Elisa, your blog mentions 3 jokers in the deck, that is very optimistic, IMO :).  Unfortunately, a squirrel falling out of a tree in the Philippines seems to create enough of a stir to generate a spike in energy prices.  But the article is correct, "technology to the rescue".

One book from years ago described our technical advancement as each engineer standing on the shoulders of those who came before them.  When I entered the technical field, a slide rule was the standard calculator, yes I'm that old, with only major corporations and the government able to access mainframe computers.  Today, children play with computers that scientists back then could only have dreamed about.  Between communications, collaboration, and computational advances, we only need a few years to see major advances in producing and harvesting new energy.  Yes, we will have to watch out for those jokers, but a world with a low cost abundant energy source would no longer have to fight over decomposed dinosaurs and that is something I hope to live long enough to see.


Comment by Bob Blanchette on January 20, 2012 at 11:53pm

Smart grid/meters have been implemented in the Oklahoma City area to delay the building of another power plant and the associated infrastructure. The idea is to reduce PEAK usage and reward ratepayers for shifting their use to off peak times. Electricity costs to generate vary WIDELY depending on peak demands. Electricity only costs 4.5cents KWH during off peak times, but 23cents KWH on peak. Most utilities don't have smart meter technology therefore no practical way to vary the rate based on demand/cost to generate. TOU pricing is one of the most effective ways to reduce utility bills and infrastructure requirements if implemented properly.  Consumers can knock off 25% of their bill by simply changing the time of day they use peak energy.

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