I’m going to go out on a limb – I oppose energy efficiency programs that are marketed as a source of new energy. I know that some people who work in this field are quite sincere, but I have been paying close attention to energy issues for too many decades now to get hoodwinked. When Shell Oil Company, the Sierra Club, the Cato Institute, the Rocky Mountain Institute, Exelon, and ExxonMobil (among many other strange bedfellows) all agree on the “best” source of new energy that is not really a source at all, I get really suspicious of the underlying motives.
A few days ago, I went into Washington, DC to visit with my in laws who were passing through Union Station on their way north. Hung on the side of RFK stadium – a location that catches a lot of traffic flowing in from Central Avenue across the Anacostia River bridge – there was a huge yellow banner with a Shell Oil logo encouraging people to “make what we’ve got go further” and asked them to “let’s go.” As we wandered through Union Station window shopping and stopping for a meal, I counted at least two dozen similar banners and signs in prominent locations. I have also seen the same campaign in at least two major weekly magazines and all over the web.
A few weeks ago, Patrick Michaels, one of the senior fellows of the Cato Institute told CNN’s Fareed Zakaria that we do not have any available replacement technology for fossil fuel and that he favored efficiency as the best way to reduce greenhouse gas emissions. By stating that we do not have any replacement technology available today, he is recommending inaction or continuance of the status quo – at least until something better comes along.
On August 21, 2010, Amory Lovins, head of the Rocky Mountain Institute, recently joined three people – Tom Blees, Dr. Yoon Chang, and Dr. Eric Loewen – in a panel to discuss whether or not nuclear energy was renewable. Lovins made a presentation stating that the best energy source of all was not using energy. His position that stood in stark contrast to the optimistic future that the other three panel members described. They discussed their excitement for a world of abundant energy made possible by fast reactors that could effectively recycle used nuclear fuel and depleted uranium to produce energy from the 99.5% of natural uranium that currently is stored as “waste”.
That abundant, nearly inexhaustible energy that does not produce any greenhouse gas emissions could be used to solve water supply issues, avoid the health effects of indoor pollution caused by burning available biofuels like cow patties in poorly ventilated hovels, and raise living standards for the billions who already use 1% or less of the energy available to the average American. For Lovins, a better path is to just use less. The underlying message is that we can get by on what we already have without investing in a production system that produces even more useful and reliable energy than the one that we have in place today.
At a recent public meeting to discuss a proposal to build a new nuclear power plant on the site of the Piketon Ohio enrichment facility, Jen Miller, of the Sierra Club’s Ohio chapter spoke up and said that energy efficiency programs would be cheaper than a nuclear power plant. Though that might be true, the implicit assumption is that it would be better for Ohio to simply continue producing electricity in the plants that it already has – which are nearly all heated by burning coal. Efficiently using electricity from a coal fired power plant is a bit like reducing from a three pack a day habit to a two and a half pack a day habit.
ExxonMobil is also running an expensive advertising campaign to promote energy efficiency and make better use of the fossil fuels that they are already producing.
Exelon CEO John Rowe was interviewed a few days ago on CNN. He repeatedly said that there is no demand in the market for any new capacity and that the cheapest new capacity was energy efficiency. Those statements reinforce the establishment message that there is no need to build any new plants that produce more reliable, cleaner power than the plants that are currently running. Based on what Rowe told CNN, when there is a need for new capacity, he recommends building new gas plants because gas is currently cheap.
Aside: Did you know that Exelon feels so strongly that there is not enough market demand that they are currently destroying – oops, I meant decommissioning – a nuclear plant that could be renovated for far less than the cost of building new plant. In 2008, TVA demonstrated the value of increasing clean energy capacity by renovating a long shuttered nuclear plant at Browns Ferry. End Aside.
During the interview, Rowe stated that his company benefits by higher gas prices. When a CEO whose company benefits financially by higher gas prices recommends that future capacity additions should be gas fired, alarm bells should sound. A critical thinker who understands markets should know that increasing demand for a commodity with a limited capacity to increase the rate of production will raise the price of that commodity – especially when there are also pressures to increase regulations that will slow production. There is a very interesting segment of the video near the end where the visual is even better than the audio. Here are the words – please watch the video to see the facial expressions. (As a teaser for what you might notice, I would love to play poker with Rowe.)
STEVE HARGREAVES: There is a lot of concern with water contamination associated with gas extracted from shale. You don’t think that will play out in the form of tighter supply?
JOHN ROWE: I think it will have an effect on the economics of shale production. I’m quite certain there will be regulation because of that concern. I think some regulatory structure is legitimate. I would be sitting here smiling like a chipmunk if I really thought that it would have a massive effect on the gas market because it would make my nuclear plants even more valuable than they are. But I really think shale gas is good for consumers and with some reasonable regulation will have a major impact on the long run gas supply.
Bottom line – you should only be excited about energy efficiency programs if you are excited about the current methods that we are using to supply the energy we use. Since the United States burns about a billion tons of coal and 23 trillion cubic feet of natural gas every year; I am not satisfied that our current supply is sustainable from either an energy supply perspective or from a perspective of environmental stewardship. We need to replace the aged infras
tructure that is limited to burning massive quantities of fossil fuels and we need to start doing it now.
The efficiency message is seductive; there is still a strong influence in American society from people who adhere to the Depression era mentality of doing more with less. My experience has been that doing less with less is a far more likely consequence of a single minded devotion to “saving” and conserving.
Wind and solar power systems are – at best – distractions that also support continued demand for fossil fuels. Take a hard look at the results in countries like Germany, Spain and Denmark that have tried really hard to make those sources work. Unless you like very high electricity prices with higher risk of system failures, you would not like those results coming to your state or nation.