America has saved more energy than you might think. YOU are saving more energy than you might think.

Saving Energy Comes in Many Forms
“Saving Energy Series, Part I”

by Russell Lowes, April 2, 2011

In 1973, at the height of the OPEC Oil Embargo, America was coming to grips with the concept of limited oil reserves. During that year, all companies, citizens and governments in the U.S. used a total of 77 quads of energy—that is, 77 quadrillion British thermal Units (Btu).(1) 

Thirty-eight years later, the country’s annual consumption is 98 quads,(2) only 27% more than in 1973.
 

“Wait a minute,” you might ask, “our economy has expanded much more than that, right”?  You would be right. Our economy expanded from $4.93 trillion to about $13.19 trillion. These figures are in 2000 dollars with the inflation adjusted out.(3) Yet, all of the energy that we use as Americans — living in houses, driving everywhere, producing goods and services, governing our nation, states, counties and cities — adds up to just 96 quads, just 27% more than almost 4 decades ago.

That means that we had a 267% increase in economic output, an increase that is radically more than the 27% energy growth.  When you factor in our conversion from a medium manufacturing country in 1973 to a lighter manufacturing country today (manufacturing uses more energy than services) the energy equivalency needs to be adjusted downward. However, still, our improvement in energy consumed per dollar of economic output since 1973 is undeniably impressive.

This is illustrated by the table below.

So how did we do that? How did we increase our economic activity with so little energy expansion? We did so by saving energy. Saving energy falls into two categories: energy conservation through cutbacks in the use of energy, and what I will call energy efficiency, through improving the way goods and services are produced.  This article and the table above, address only energy efficiency.

Energy efficiency includes producing more services like delivering packages around the country for less energy. It also includes producing more goods for the same buck, like reducing the plastic and metal in a radio that performs the same function.

How Are YOU Saving Energy Through Energy Efficiency?

In all likelihood, you are contributing to this increased energy efficiency.  You may not even know that you are buying something that has been manufactured in a way that has improved in efficiency. 

Take the clothes you are wearing. Since 1973, that first year of increased energy awareness in the U.S., clothing has been dyed using more effective technologies, like using electrostatic adherence techniques. That has allowed manufacturers to use less dye, which means producing less dye and reducing all the energy that used to go into manufacturing. You may not have even known it.

On the other hand, if you have changed the type of light bulbs you use, you probably do know that compact florescent lights save about 75% of the energy that old-fashioned incandescent bulbs use. These CFLs have improved in recent years to give better lighting.  For example, the U.S. Government Energy Star-rated CFLs now start out with the same amount of light almost the instant you turn them on, the amount of mercury has been reduced, the light spectrum has improved, and the annoying hum has been eliminated.

Even some power plants have contributed to our energy efficiency gains.  These power plants have increased their thermal efficiency, which means that for every 100 units of heat they produce, they now convert more of that heat to electricity.  That reduces the need to produce so much heat (raw energy production) and pump so much water to cool these plants, which uses a tremendous amount of energy.

With that in mind, below is a graphic of the energy efficiency categories that will be helping America reduce its energy use per dollar of economic activity, or per average item bought. This is a projection of what might happen between now and 2020. The point of presenting this is to show the vast array of efficiency techniques that we both have been using and are still improving upon.

The improvement in energy efficiency since 1973 has saved more energy than all the additional energy expansion since that year. This will continue on into the future, and negate the need for additional power plants and oil consumption for transportation and more.

Above table: McKinsey Report finds that U.S. could save $1.2 trillion through 2020, by investing $520 billion in improvements. Kate Galbraith, “McKinsey Report Cites $1.2 Trillion in Potential Savings from Energy Efficiency,” New York Times, July 29, 2009,

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(1)    U.S. Department of Energy, Energy Information Administration, http://www.eia.doe.gov/…/All_25th_Anniversary.xls and http://www.eia.doe.gov/totalenergy/data/monthly/pdf/mer.pdf
(2)    Data360, http://www.data360.org/dataset.aspx?Data_Set_Id=354

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Pro-Coal and Pro-Nuclear Congressional Energy Bills on Crash Course with Environment, U.S. Economy and the Public

By Russell Lowes, November 22, 2009

 

This may seem like blasphemy: the House Bill on energy known as The American Clean Energy Act is the most detrimental bill the House has passed since the Patriot Act. Like the Patriot Act, it is not what it says it is. It should never become law.

        It is not a clean energy bill.

        It is not a pro-solution climate bill.

        It is not a pro-American bill.

 

        It is an energy giveaway bill.

        It is a bill that deletes Clean Air Act authority for the Environmental Protection Agency over nearly 50 coal plants.

        It is a bill that sets up an unfair energy tax system called cap & trade tax (CTT).

        It is a bill that sets up CTT, that doubles as a financial derivative, which would be responsible for economic deterioration of U.S. economy, just like the CDOs and CDSs that helped cause the current economic downturn.

Further, the Senate bill versions are just as bad or worse.

At issue is a battle that has a huge bearing on the United States and world’s environment, economy and social order. The American Clean Energy and Security Act, or ACESA, has passed the U.S. House and is now in a number of different forms before the Senate.  With the change in the administration and increased majorities in Congress, we had all hoped that the 111^th Congress would act fast to implement a new climate bill to start controlling our pollution output like carbon dioxide.

The House Bill (HR 2454), however, is replete with problems, as are the Senate versions currently being drafted. While it is significant that a house of Congress has, for the first time, passed an energy & climate bill, it is also important that the bill that Congress ultimately enacts imposes a tax on energy in a way that will discourage excess energy use.  That is because energy use analysis indicates that price increases are the most effective way to curtail energy use, improve the way we use energy and decrease pollution.

THE PROBLEMS WITH ACESA

There are numerous problems with the 1428-page House Bill (HB)¹, so I do not attempt to address all of them.  Rather, I will highlight three main areas that need to be corrected in a final bill if it is to be effective: 

 

ACESA implements cap & trade tax and financial derivative system instead of a simple carbon tax.

 

 

Emissions trading, also known as “cap & trade tax” is a way of controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.  Under “cap & trade tax” the government sets a limit, or “cap” on the total amount of a pollutant that can be emitted.  Companies or other groups are issued permits that give them the right to emit a certain percentage of that amount of pollutant (“credits” or “allowances”).  The total amount of credits or allowances cannot exceed the cap.  Companies that need to increase their emission allowance can buy credits from other companies who don’t need all of their credit because they pollute less.  This transfer is the “trade.”  Thus, companies have a financial incentive to reduce the amount of pollution they emit and a disincentive to exceed their set allowance. 

While cap & trade is a tax in that the U.S. Government will be collecting auction fees/taxes, it is also a financial derivative, in that the certificates issued through auction will derive their value from the sold “right” to pollute.

ACESA includes a cap & trade tax system where the certificates would be issued through an auction.  By requiring companies to buy their certificates, the government forces them to pay for the “right” to pollute.  When he was campaigning for the presidency, candidate Obama promised that under his cap and trade plan, 100% of the certificates would be auctioned—in other words, no one would get a free ride to pollute. 

 

Unfortunately, the house bill only requires 15% of the emissions certificates to be auctioned, or paid for, during the first year.  That figure will increase to only 70% by 2030.  Obviously, this reduced auction amount is a major disappointment to those of us who want to see polluters, not the public, bear the financial burden of their pollution.  

 

The reduced auction amount isn’t the only problem with the cap & trade provision in the bill. Although cap & trade systems can be effective they are also susceptible to abuse.  Opportunists are able to take advantage of the complexity of the mechanism to “game the system.”  To curb this potential problem, the House Bill sets up an oversight committee under the Commodities Futures Trading Commission to regulate hedge fund and other derivative-related aspects of cap & trade. However, it is only a cursory oversight arrangement and there is legitimate concern that it would not prevent market manipulation, which in turn could lead to a new economic bubble in this new speculative market and ultimately hurt the U.S. economy. Illicit cap & trade tax schemes have already been exposed in Europe.²

 

All of these problems with the cap & trade tax approach could be eliminated by implementing a simple carbon tax.³

 

ACESA Eliminates EPA Clean Air Act authority to regulate carbon dioxide.

 

The House Bill is also problematic because it proposes to strip EPA’s authority to regulate carbon dioxide under the Clean Air Act.⁴  This authority was only recently recognized by the United States Supreme Court, and EPA is only now moving toward exercising it; however, the House Bill would reverse that progress. 

 

At least one analysis of the House Bill indicates that this proposed de-authorization of the EPA would mean that 47 coal plants will be able to be built without EPA regulation.  Clearly, that outcome is contrary to any meaningful goal to reduce carbon emissions. 

 

ACESA Funds coal and nuclear energy more heavily than increased efficiency and renewables.

 

Finally, the proposed funding under the bill for new technologies has misplaced priorities and incentives.  Under the House Bill, $60 billion would be allocated for “clean coal” carbon capture and sequestration (CCS) technology. CCS is a technology that would capture the carbon coming out of the coal stack and then sequester it so that it does not get into the atmosphere.

 

There are a number of CCS different possibilities in the process of being developed, but none has been demonstrated on a commercial scale, and it is unlikely that CCS will be economically practical.  Yet, this is the largest chunk of money directly listed in the bill for any one technology. While energy efficiency and renewable energies get $90 billion by 2025, or $6 billion per year or so, that is only a fraction of the amount that coal and nuclear energy will get.

 

One of the Senate bills includes loan incentives that would give nuclear and coal CCS hundreds of billions of dollars in aid.  The decision to disproportionately encourage these two technologies with financial aid and incentives in a “clean energy” bill is simply baffling.  Keep in mind that nuclear has been shown to be an uneconomical technology, and that coal CCS, even if it works, will lead to much more coal mining. The truth is, there is no clean coal, nor would any reasonable person consider nuclear energy a “clean” fuel given its significant waste problem. 

 

Yet the bill’s definition of clean energy is so loose, under it coal CCS and nuclear energy will be considered “clean.”  And here’s the kicker–these two technologies, coal CCS and nuclear, are so expensive (in the range of 25-35 cents per kilowatt-hour for new units) that if we put our dollars into them, they will suck so many dollars away from energy efficiency and renewables (in the range of 2-25 cents per kilowatt-hour) that there would not be enough money to solve the climate solutions we desperately need.

 

In summary, here is what needs to happen to make these bills a positive force: 1) restructure cap & trade tax or, better yet, replace it with a simple carbon tax; 2) do not remove the Clean Air Act authority from the EPA; and 3) define clean as clean, and re-design this bill to fund the technologies that are truly clean.

 

You can call your senators and stress how irresponsible the cap & trade system is. If it passes the Senate, you can then call your Representatives and Senators to ask them to block the authorization of the reconciliation of these two terrible bills.

 

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Note: An earlier version of this article appeared in the Sierra Club Rincon Group newsletter, under my new appointment as Energy Subcommittee Chair for this Group.

¹Available at http://energycommerce.house.gov/Press_111/20090701/hr2454_house.pdf

²Associated Press article in Arizona Daily Star (AP), Fight Against Global Warming Spawning New Type of Crime: Carbon-Permit Fraud, 8/22/09, p. A12, http://www.azstarnet.com/sn/news/305938.php

³See http://carbontax.org

⁴See analysis at http://www.psr.org/take-action/senate-letter-climate-legislation.html

Post-Mortem for a Pseudo-Climate Security Act

By Russell J. Lowes, June 8, 2008

The Senators from Connecticut and Virginia thought they could pull a fast one. They thought they could play the game the Bush Administration is so into, the mis-naming game. Healthy Forests runs down our forests. No Child Left Behind leaves an underfunded ill-conceived program putting our public school system at risk. So why not call this the Climate Security Act?

Security is the opposite of what this act was intended to bolster. This Senate bill was intended to instead increase the profit of the few at the expense of the many. The names of the authors/sponsors of the bill could have been a warning clue. The Lieberman-Warner bill had numerous problems in it.

However, there were two problems of epic proportions.  One was promotion of a massive nuclear energy system for the U.S. This bill would have had the effect of promoting the nationalization of financing for nuclear energy.

The other was the promotion of an inherently unaccountable cap & trade pollution-“rights” trading system. This proposal is so non-transparent and complex that headlines of the future would have been declaring fraud after fraud, corruption after corruption.

Funny thing is, there was no mention of “nuclear energy” in the bill. The bill just mentioned that there would be funding for low-carbon technologies and then it defined low carbon in such a way that didn’t include life cycle. It defined it so that nuclear energy would be an easy recipient, without counting the life cycle energy inputs.

On a life cycle basis, nuclear energy produces massive amounts of carbon dioxide (CO2), a greenhouse gas. On a standalone reactor basis, nuclear energy does not produce very much. Even while a reactor is running, it sometimes requires grid electricity or backup diesel generators to be assisting while power calibration between the reactor and the grid is occurring, for example.

However, this minimal on-site power requirement is dwarfed by the twenty steps of the nuclear fuel cycle, from mining to enrichment, from milling to construction of waste facilities, from fuel fabrication to environmental cleanup of nuclear energy and waste accidents, nuclear energy is a CO2 hog, just like coal.

The authors of this bill knew that nuclear energy would be the recipient of the endowment. Karl Grossman pointed this out in his article, “Half-Trillion Dollars for Nukes!” (See http://www.counterpunch.org/grossman05312008.html).

Let’s just run some simple numbers about how the vast nuclear program of this bill would hurt America and you, the taxpayer. This program is just the beginning of what some would like to see become of a beefed-up nuclear energy “solution.” In the early days of this decade, Massachusetts Institute of Technology concluded that in order for nuclear energy to have a significant impact on our energy strategy, it would take 1,000 reactors. Another major study since then put a range at 1,000 to 2,500 reactors. Our average size reactor in the U.S. is, coincidentally, 1000 megawatts, or 1,000,000 kilowatts. Here’s the scoop on costs for such a program.
– Number of reactors:                  1,000
– Size per reactor average:         1,000,000 kilowatts of capacity
– Cost per kilowatt, approx.        $9,000
– Multiplying the above figures:   $9,000,000,000,000 (9 trillion dollars)

Simple enough? Well the payback on that $9 trillion is about 15% per year for a thirty-year loan schedule in a free enterprise system. That would equate to $1.35 trillion per year. If citizens in the U.S. average 350 million over that 30-year period, the amount paid per year in the U.S. would average $3857 per person! This is just simple math. This $1.35 trillion for loan repayment  compares with the total $900 billion or so that the U.S. spent in 2007 on ALL energy costs (electricity, gas for vehicles, heating oil, etc.). There is no getting around it – nuclear energy is a 20th Century technology that keeps rearing its ugly head.

The renowned Rocky Mountain Institute shows how nuclear energy is about 7 times the price of energy efficiency. Energy efficiency combined with a solid renewable energy program is the centerpiece of any sound energy policy. Nuclear energy is now about 3 times the cost of wind energy, and a little higher than what concentrated solar power is going for.

On the issue of cap & trade/pollution-rights trading, and the much more effective program called “carbon tax.” there is a great website called http://www.carbontax.org

Quoting from this website:

Why revenue-neutral carbon taxes are essential,

The next Administration and Congress will be called upon to address 21st Century climate realities. In a carbon-constrained world, a permanent, essential feature of U.S. policy must be a carbon tax that reduces the emissions that are driving global warming.

* A carbon tax is a tax on the carbon content of fossil fuels (coal, oil, gas).
* A carbon tax is the most economically efficient means to convey crucial price
signals and spur carbon-reducing investment and low-carbon behavior.
* Carbon taxes should be phased in so businesses and households have time to
adapt.
* A carbon tax should be revenue-neutral: government can soften the impacts of
added costs through rebates or by reducing other taxes (“tax-shifting”).
* Support for a carbon tax is growing steadily among public officials; economists;
scientists; policy experts; leading business, religious, and environmental
figures; and on the opinion pages of leading publications.

 

                                                                                 –from carbontax.org

 

The next climate act should be a real climate security act. Let’s make it well-known that nuclear and fossil energies need to be phased out, and that energy efficiencies and renewables need to be the centerpiece of any effective legislation.