For as long as most of us can remember, the nation’s energy news has trended from bad to worse, starting with the oil crises of the 1970s. But today, the good news is that our energy productivity and security are better than they have been in decades.
You’d never know it by listening to those who say our energy security requires construction of the massive Keystone XL pipeline, or a new surge of oil and gas drilling, or a nuclear power renaissance, or all of the above. And while “all of the above” has emerged as the favored national energy policy of both parties, fortunately that is not the focus of President Obama’s promising climate action plan.
He has given top priority instead to our most productive and lowest-cost option: the “energy efficiency resources” that come from getting more out of oil, natural gas and electricity with increasingly efficient equipment and vehicles, used more carefully.
Government data indicate that our energy-saving efforts already have yielded some amazingly good news. Our factories and businesses are producing substantially more products and value with less energy, which goes to the heart of the president’s climate strategy. In fact, energy use in the United States has been dropping since 2007, and last year’s total was below the 1999 level, even though the economy grew by more than 25 per cent from 1999 to 2012, adjusted for inflation.
At the same time, the amount of oil we are using in our vehicles, homes and businesses continued to decline last year, down 14 per cent from a peak in 2005. Surprisingly, oil use was lower in 2012 than in 1973 (when the nation’s economy was only about a third of its current size). The main reason is that we are demanding better mileage from our vehicles and driving them less.
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Total energy use per dollar of goods produced is down, as are gasoline use per mile driven, cost of energy services (from lighting to refrigeration) and greenhouse gases emitted. These reductions are saving hundreds of billions of dollars every year.
These remarkable trends began decades ago. Without trying too hard, over the past 40 years we found so many innovative ways to save energy that we more than doubled the economic productivity of our oil, natural gas and electricity.
Moreover, efficiency’s contribution to meeting the nation’s overall energy needs over that period exceeded that of all fossil and nuclear resources combined, according to a recent study by the Bipartisan Policy Center, a result of 18 months of work by a panel that included me as well as prominent industry representatives.
Total energy use per dollar of goods produced is down, as are gasoline use per mile driven, cost of energy services (from lighting to refrigeration) and greenhouse gases emitted. These reductions are saving hundreds of billions of dollars every year. They are helping American workers and companies compete worldwide. And they are making our country more secure.
With numerous studies uncovering vast untapped energy efficiency savings, there are several critical steps we should now take. First, the federal and state governments must keep tightening efficiency standards for buildings, equipment and vehicles. This also means ensuring that the administration follows through with its recent commitment to end what my organization and a number of states contend are unlawful delays in releasing standards already approved by the Department of Energy. Second, the Environmental Protection Agency must reduce carbon dioxide emissions from new and existing power plants by adopting standards that recognize the contribution energy efficiency can make to reducing such pollution.
In addition, state regulators should reward utilities for helping residential, business and industrial customers use energy more efficiently, and stop the widespread practice of penalizing utilities when their sales level off or decline because customers are using less energy. When regulators set rates, they establish targets for utilities’ allowable revenues, and this unintentionally links the companies’ financial health to robust sales of electricity and natural gas. The problem can be solved if regulators allow modest annual rate adjustments that correct for any unexpected changes in utility sales.
Half the states have instituted such “decoupling” systems for at least some of their investor-owned natural gas and electric utilities, but the process is taking too long and only one publicly owned utility, the Los Angeles Department of Water and Power, has adopted these reforms. The rest should step up.
When it comes to our personal and government energy budgets, we must focus on achieving still more energy savings that cost (and pollute) far less than the electricity, natural gas and oil we won’t need as a result. There are so many steps we can take, ranging from upgrading our light bulbs and insulation to retrofitting our homes and buildings with new energy-saving products and appliances. Most utilities have become good sources of information and financial incentives for interested customers.
For 40 years now, energy efficiency has been America’s most productive energy resource. In a nation and world with funding constraints, an “all of the above” energy policy that threatens the environment is a guarantee of costly disappointment. As the president knows, it is far better to give priority to efficiency improvements that cost less than the energy they displace.
Ralph Cavanagh is co-director of the energy program at the Natural Resources Defense Council. This post originally appeared here.
