Energy Conservation Bonds

Here is the language in the stimulus package increasing the national limitation on energy conservation bonds.

http://feingold.senate.gov/e4/bill_energy_crec09.pdf

Cato versus Save the Watts Guy

Before I start, here is a cool quote I found. In 1998, Microsoft’s Bill Gates said about the Wright brothers’ invention in a speech he gave at Time Magazine’s 75th anniversary celebration of the airplane that, “We have to understand that engineering breakthroughs are not just mechanical or scientific, they are liberating forces that can continually improve people’s lives.”

The dog in the photo on my blog is Cato. He is a Jack Russell terrier. For those who aren't familiar with Jack Russell's, they are killing machines (click to see video). I didn't know that when we got him. He was just this adorable little puppy. He is still adorable but must be kept under close control.

I guess Cato symbolizes my philosophy of how we should approach the need and opportunity for energy efficiency because he is focused, ferocious, and relentless. That's the kind of symbol that we need for the energy efficiency fight, not some dufus like Save the Watt Guy. Do you know Save the Watt guy? He is Progress Energy's spokesperson for energy efficiency. They run commercials in the Raleigh-Durham market with him talking about saving energy. Did I say dufus? I am being kind. Here he is: http://www.progress-energy.com/shared/stw/car/main.html See what you think.

To me, what Save a Watt guy symbolizes is why utilities should not be in charge of this country's energy efficiency efforts. There have been some utilities that have been pretty good at promoting energy efficiency but most are culturally unable to adapt and grow the skill sets necessary to achieve the broad scale energy efficiency market penetration we need. Lets face it, their regulatory incentives are to build power plants and produce power. Their skill sets are to manage those power plant and electricity distribution assets and manage the regulators.

I know this because I consulted for many years with utilities looking to transform themselves into 21st century retail energy services providers. But it was like trying to turn the Titanic. These companies have been built a certain way for a certain purpose and have operated in this way for probably 75 years. As one of my consulting colleagues, a marketing guru, told me, "When it comes to marketing, these companies aren't the brightest bulbs in the box."

When I worked at XENERGY, we referred to the power generating side of the utilities as the "dark side". I am not saying there weren't some very enlightened people in the industry. There were lots of them at New England Electric -- now ?, Irene Stillings at NYSEG -- now ?, etc., but it was a smattering here and there, not a quorum.

Unless something has radically changed in the past couple of years, I very much hope that no one will be looking to the utility industry to take the leadership role in implementing energy efficiency, particularly when it comes to opportunities in the stimulus package. I would like to see some more groups like 1BOG involved.

Opportunities for Energy Efficiency in the Stimulus Package

Here is a summary of the funding and tax cuts for energy efficiency in the package signed by President Obama on February 17th, 2009

Energy Efficiency and Conservation Block Grants $3.2 billion

Weatherization Assistance Program: $5.0 billion to weatherize over a million homes.

Home Efficiency Retrofit Program: Creates a new $2.25 billion program to upgrade Housing and Urban Development sponsored housing to make it more energy efficient

State Energy Program: $3.1 billion

Energy Efficiency Tax Credits: One-year extension and expands the credit to increase the amount of the tax credit from ten to thirty percent of the amount paid by the taxpayer. (Estimated cost: $4.275 billion)

Federal Buildings Efficiency Improvements: $4.5 billion

Energy Efficient Appliances: $300 million

Native American Housing Block Grants: $510 million

Qualified Energy Conservation Bonds: $3.2 billion in bonding authority

Department of Defense Energy Efficiency Research: $300 million

Department of Defense Energy Conservation Construction: $220 million

Total Energy Efficiency Investment:: $26,855,000,000 investment including the projected investment from tax cuts for energy efficiency tax credits.

More to come.

I got a bit sidetracked in the course of my research. Here are two excellent presentations and a website discussing energy efficiency by a professional society of physicists.

http://www.aps.org/energyefficiencyreport/index.cfm

http://files.eesi.org/lubell_020509.pdf

http://files.eesi.org/laitner_020509.pdf

By the way, Daniel Sperling was on the Daily Show the other night promoting his book Two Billion Cars: Driving towards Sustainability.

Not to Rest on Our Laurels but Progress is Being Made

Energy efficiency measures are already working in the US in our homes, schools, institutions, commercial buildings and factories. It's just that there is so much more that can be done.

Following the oil crises of 1973 and 1979, regulators in a number of states ordered utilities to set up programs to encourage customers to cut electricity use. Demand side management (DSM) programs and integrated resources planning played an important part in curbing the growth of U.S. electricity demand well into the 1990s. But with electricity deregulation, the role of the state regulatory bodies were downsized and many of the DSM programs atrophied.

With or without utility DSM programs, each unit of energy consumed today provides significantly more energy services than the same unit of energy provided in 1970. In fact, energy efficiency has contributed more value to the economy in recent decades than any conventional energy resource, meeting three-fourths of all new demand for energy services since 1970. To all those people who have stuck with the energy efficiency industry through the ups and downs of the last 20 or 30 years, you should give yourself alot of credit.

Efficiency Gains Compared to New Supply, 1970-2008

(Sorry if this is hard to read. I am still mastering the art of adding images with the blogger software. The source of this graph is "The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture" Karen Ehrhardt-Martinez and John A. “Skip” Laitner,May 2008, Report Number E083, American Council for an Energy-Efficient Economy, www.aceee.org. )

Estimates indicate that by the end of 2008, U.S. energy consumption per dollar of economic output will have declined by more than 50 percent since 1970, from 18,000 Btus to about 8,900 in 2008. As such, current levels of energy consumption in the U.S. are only half of what they would have been if levels of energy services, the structure of the economy, and overall energy productivity had remained unchanged. But I am not suggesting we should rest on our laurels. There is significant improvement yet to be made.

Dear US Representative Price

(I just sent this to my US representative David Price.)

We met in front of Northern High School one very cold afternoon in Durham when I was poll greeting and you were campaigning. You were a bit worried about the TROSA guys who were campaigning for your opponent.

I am getting pretty darn sick of listening to the Republicans bashing President Obama. We had to spend eight years of hearing that it was unpatriotic to bash Bush and like the wusses that we Democrats generally are we kept our mouths shut. Now we are in the majority and while I don't think criticism is unpatriotic I do think that the Democratic leaders in Congress of which Rep Price is one need to step up and express some heartfelt moral outrage at the disrespect of the Republican Party towards President Obama. If you need my help on this let me know. I can do moral outrage very well.

Also, NO BAILOUTS for the car companies. I am okay with helping displaced auto workers but I believe in the definition of insanity as the act of doing the same thing over and over and expecting different results. We have been propping up the US auto industry for years. It ain't working and meanwhile their unwillingness or disinterest in building fuel efficient cars has been enormously hurtful to this country. They need to fail or dig themselves out of this hole. As far as I am concerned my fellow Dukie Rick Wagonner needs to retire.

Okay, lastly, no federal investments in alternative energy sources without a commensurate investment in energy efficiency. Basically I would define it as one negawatt for every kilowatt. Energy efficiency is a strategy not a virture and a very good one at that. It is our cheapest and lowest risk source of energy and still ignored.

That's all.

Rebecca

FUEL EFFICIENCY AND THE COLLAPSE OF THE U.S. AUTO INDUSTRY

Enough about building efficiency. It's time to talk about the efficiency of our vehicles particularly as we debate bailing out the auto industry. You may want to stop reading right now if you support a taxpayer funded bailout of the auto industry because I don't. Charles E. Wilson,while president of General Motors Corporation, once said: “What’s good for the country is good for General Motors, and vice-versa.” It may be good marketing or lobbying but it's not true. Most of what has gone wrong with the US auto industry stems from our continual propping of this industry and the US auto industry has done little right for the US particularly when it comes to fuel efficiency.

Don't believe me? Here are the facts: Cars have shown relatively little improvement in fuel efficiency over the past forty years and even less over the past 100 or so years since their invention. Their efficiency improvements surpass only the truck’s, which has remained virtually flat or has even dropped in the past forty years. Over a 54-year time span, from 1949 to 2003, the mileage performance of transportation vehicles has improved by only 7.3 mpg, from 15 mpg to 22.3 mpg. Most of that gain occurred within the time frame of the enactment of federal Corporate Average Fuel Economy (CAFE) mandates in 1975 that required the car companies to nearly double the average fuel economy of passenger cars or light trucks by 1985. By 1982, the combined average fuel economy of new U.S. cars and trucks had reached around twenty-five miles a gallon—about where it stands today. The original legislation for CAFE improvements died in 1985 at the hands of the U.S. auto industry and its supporters.

One hundred years after their popularity took root, cars are still powered mostly by gasoline and still use an internal combustion engine. In the same time period that we have been driving cars, the computer has been created, vastly improved, and reduced in size; medicine has found cures for countless diseases; men have landed on the moon; and planes have become a common mode of transportation, moving more people farther and faster. The century that started with steam-powered ships as the most sophisticated means of transport ended with the space shuttle and fuel inefficient cars.

Automobile fuel efficiency has improved 50 percent over the 54-year period from 1949 to 2003. If you think for a moment that is a good rate of improvement, compare it to Moore’s Law in the information technology industry. Moore’s Law, based on a statement made by Gordon Moore, a cofounder of Intel, in 1965, says that the rate of technological development with respect to component cost will double every twenty-four months. Moore made this statement more as an observation than a prediction, but it became widely accepted as a goal for an entire industry. It has pretty well held true, and digital technology has profoundly changed Americans’ lives in much the same way cars have but at a much lower cost.

Fuel efficiency has never been a hallmark of the U.S. auto industry. A 1956 report of the U.S. Senate’s antitrust subcommittee contended that “Efficiency to General Motors is apparently its ability to achieve its planned return on investment.”

Let’s face it, the fuel efficiency of the vehicles the Americans build and drive should be better. The fact that it isn’t is symptomatic of the general resistance to change in the American automobile industry. The auto industry is the world’s largest manufacturer, and the American automakers long dominated the world industry. As the largest manufacturer in the U.S. since the early 1920s, automaking has been instrumental in shaping labor relations, corporate structure, and political influence. It has exerted enormous influence on economic events, and the U.S. government believes that “without question a successful and growing automobile industry is critical to the overall strength of the U.S. economy.” The lessons of the U.S. automobile industry vis-à-vis fuel efficiency offer insight into our conundrum of energy inefficiency. This resistance to change in the automobile industry has been fed by public policy and government regulation that protected the car industry from market forces and competition, a focus on car styling and marketing over performance, and the death of a product culture in American car companies.

With America’s rush to become a middle class society and its insatiable demand for cars, it was impossible in the heyday of the car companies for them not to make money. The inevitability about increasing sales led to little focus on improving the product. From 1949, when the automatic transmission was introduced, to the late seventies, the cars remained almost the same. What innovation there was came most reluctantly. While foreign carmakers were rapidly introducing new features into their cars to improve their performance, most change that the Big Three car companies brought to cars in that time period was focused on taking the cost out of them in order to increase corporate profit. The effect was to weaken the integrity and quality of the vehicles.

The size of cars in post-World War II America grew at an amazing rate—from 90 to 100 cubic-inch engines, to 160, to 250, and finally to Chevies with 325 and 400 cubic-inch engines. Gas mileage went down proportionately. Hal Sperlich, who was one of Detroit’s leading car designers, said car engineers no longer sought maximum efficiency but rather deliberate waste. This was viewed as feasible due to the discovery of immense amounts of oil in the Middle East even while American reserves remained static. On top of that, the countries that held these reserves were viewed as weak and they attributed to Americans and the West great power. No one foresaw that someday these oil-holding countries would form a powerful cartel, OPEC, the Organization of Petroleum Exporting Countries.

As the Big Three’s market share and sales and size of cars grew, it was as if they were minting money. Ford and Chrysler were afraid to cut prices for fear of a price war with GM that they would lose. The result was that consumers paid more for the same product. In this situation, American carmakers turned cautious and staid. According to George Romney, one-time chairman of American Motors, the companies became muscle bound and mindless in the U.S. market—locked into mindless practices but unable to break out because they were so profitable. According to Romney, “There is nothing more vulnerable than entrenched success.”

Neither Detroit nor the buying public seemed interested in the late 1950s in smaller, more efficient vehicles. For one thing, designing and building big, heavy gas-guzzling vehicles was easier. It is harder to design and build small, efficient, yet high-quality cars that handle well and appeal to consumers. It takes great skill, creativity, and will. The American carmakers built monopoly products like the Russians in the Communist era measuring the success of the iron beds they built by weighing them. The more they weighed the better the beds were considered to be, even though the weight of a bed has nothing to do with how comfortable it is or how easy it is to move.

Art Rosenfeld --The Father of Energy Efficiency or Energy Efficiency is not Rocket Science

Just when you think you know it all, you learn something new. I was searching for research to support an upcoming post about the recalcitrance of the automobile industry in improving the fuel efficiency of cars in order to compare it to the relative cooperativeness of appliance manufacturers and more specifically refrigerator manufacturers. I recall that in the 1980s and 1990s either the DOE or California conducted a competition among refrigerator manufacturers for the best way to improve refrigerator efficiency. The competition was successful and is certainly a factor in why our refrigerators today are much more energy efficient than they used to be. I still haven't found the details of that competition, but I did stumble upon an article about Art Rosenfeld, who when he received the Fermi Prize for lifetime achievement in physics last year the EPA credited with all the efficiency initiatives adopted between 1973 and 2005—the "Rosenfeld Efficiency Factor"— saving an amount of electricity equivalent to 21 percent of U.S. consumption last year, or $228 billion. He should be a national hero. Here is an article about him. Here is another one.

It turns out that Rosenfeld was a very accomplished physicist in the early 1970s when he realized during the OPEC oil embargo how much oil he was burning by leaving the lights on in his office at night. This inspired him to seek out ways first to make his office more energy efficient and then to look more broadly at the issue. He figured he would go back to physics eventually but has been leading the energy efficiency charge in California and the rest of the world ever since. California residents, by the way, consume 30% less electricity per capita than the rest of the country. Though his field of expertise in physics was not rocket science, the point is that he left the field of physics to pursue energy efficiency.

A friend of mine recently told me that I should write a book about how to be more energy efficient because he just didn't know how to go about it. I told him it wasn't rocket science. Most everything you need to know already exists in books, magazines, or on the internet. Much of it comes down to choosing the more fuel or energy efficient options. I think in fact the reason it seems so difficult to some people is that it is actually so remarkably simple. The challenge is how to collectively motivate ourselves to make the choices and take the actions to be energy efficient. With Valentine's Day coming up, I keep thinking I should start a little business to attractively decorate and gift wrap compact fluorescent light bulbs (CFL) that people could give as housewarming gifts or send to each other on special occasions -- "You Light Up My Life...". One of the presentations would be as a bouquet with the CFLs in place of flowers.

My father, when we played tennis together, would regularly point out that I had a very energy efficient game. I think this might have been a subtle way of telling me he thought I was lazy. I have though maintained that energy efficient bent throughout my life though not slavishly. Our home is small by modern standards, heavily insulated, and configured to optimize the use of sun and shade. We have SEER 19 heat pumps, CFLs, an on demand hot water heater, all Energy Star appliances, and a hybrid vehicle. I try to eat as little meat as I can which doesn't mean I don't eat any but I try to keep it to a minimum for both health and energy reasons. I am by no means a paragon of energy efficiency but I think that's okay. If we collectively held ourselves to these standards, our energy security would be vastly improved. Unfortunately, many of us simply can't afford to spend the upfront money to live to these standards, which gets back to my idea of giving the gift of energy efficiency. That gift could go to a friend, someone less fortunate, a charity, or an institution like your local school, hospital, or college. And to make that gift even better, you could in the case of light bulbs screw them in yourself. What a great and easy way to make a difference.

Should You Eat Out Tonight?

Here is a reason to go out for dinner tonight, besides being too tired to shop and cook.

Storing and preparing food at home is the largest use of energy in the U.S. food system. This energy use includes the electricity for refrigerators and freezers, energy for stoves, ranges, and microwave ovens, dishwashers, and heating water for dish washing. Over 40 percent of food-related household energy consumption goes to operating refrigerators. Improvements in appliance efficiencies have decreased refrigerator energy consumption over the past decade, but the number and size of refrigerators in American households continue to grow. Cooking at home accounts for about 20 percent of our household food-related energy use, while hot water heating for dish washing is estimated to be another 20 percent.


I found this is information in a report called: Life Cycle-Based Sustainability Indicators for Assessment of the U.S. Food System, Martin C. Heller and Gregory A. Keoleian, Center for Sustainable Systems, University of Michigan, Report No. CSS00-04,December 6, 2000, p. 41.