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| TABLE OF CONTENTS |
| WELCOME TO EFFICOLOGY |
| INTRODUCTION |
| OVERALL APPRECIATION |
| THE GIFT OF NATURE |
| THE GIFT OF ENERGY |
| THE GIFT OF TIME |
| THE GIFT OF RELATIONSHIPS |
| CONCLUDING REMARKS |
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Vaclav Smil, Energy at the Crossroads: Global Perspectives and Uncertainties. Cambridge, MA: MIT Press, 2003. ISBN 0262194929. Chapter 6, Page 317
Anybody even cursorily familiar with the current state of principal energy conversion techniques appreciates the enormous opportunities for using fuels and electricity more efficiently…. Whatever the future gains may be, the historical evidence is clear: Higher efficiency of energy conversions leads eventually to higher, rather than lower, energy use, and eventually we will have to accept some limits on the global consumption of fuels and electricity.
From the Alliance to Save Energy’s website, January 24, 2004 WHAT’S ENERGY? http://www.ase.org/powersmart/whtsenrgy.html
Energy used to heat your home and power your TV is not too different from the energy your body gets when you eat a bean burrito. Your body is like a powerhouse, turning food (fuel) into usable energy— the ability to do work—and eliminating waste byproducts.
A power plant does the same thing: Coal, oil, or natural gas (nonrenewable fossil fuels) goes in and gets burned up to power a big generator that sends energy to your house, with carbon dioxide, some noxious gases, and/or sludge as byproducts.
The problem: Fossil fuels (from fossils, or remains, of dead animals and plants) take millions of years to make. The volume of byproducts created when we burn fossil fuels are not easily reprocessed in our environment and cause pollution and related health problems.
Energy production and use account for nearly 80 percent of air pollution, more than 88 percent of greenhouse gas emissions, and more environmental damage than any other human activity.
Energy Efficiency vs. Energy ConservationEnergy efficiency is a far cry from old energy conservation images. It’s not turning down the thermostat and sacrificing comfort. Energy efficiency means getting the most from every energy unit by using state-of-the-art technologies to provide daily needs— comfortable homes, profitable businesses, convenient transportation. It is the single most immediate, cost-effective way to reduce energy use and pollution.
If your house were energy efficient, you could lower your thermostat and be comfortable day and night, without drafts, cold spots, or guilt while doing your share for your family, your finances, and your environment.
If you replaced just four 100-watt incandescent bulbs that burn four or more hours a day in your home with four 23-watt fluorescent bulbs, you’d get as much light and save at least 1,356 kilowatt-hours of electricity and $108 over three years. If all our nation’s households did the same, we’d save as much energy as is consumed by some seven million cars in one year.
Join our “treasure hunt” to discover ways to save home energy and money. Gain the Power$mart edge—the knowledge and power to make energy-efficient choices. The brochure’s Power$mart Tips highlight efficient technologies and approaches, while its Energy Consciousness Tips provide the best energy-saving conservation behaviors. Together, they produce maximum results.
Mithra Moezzi and Maithili Iyer, Lawrence Berkley National Laboratory, “What Else is Transfered Along with Energy Efficiency?” Human and Social Dimensions of Energy Use: Understanding Markets and Demand. 2002 Summer Study of the American Council for an Energy Efficient Economy. Page 8.204Our argument is not that technologies in general don’t often make people more comfortable or otherwise better off given the subjectivities of these notions. But perhaps a good deal of the core of this concept of “standards of living” is supplied by mandates to consume and control that inhere in technology, its marketing, and its infrastructure. Whatever one may think of the morals of this, the idea that promoting control through energy efficiency actually reduces energy consumption and carbon emissions deserves critical and multi-disciplinary reflection. The current levels and configuration of standards and codes in the United States are not absolute and technically perfect. Rather, they have been shaped by extraneous factors such as manufacturer interests and changing definitions of comfort; they thus often follow technological trajectories which bring the “final” configuration something much different than might be consider socially reasonable).
Though the Green Revolution is often described as increasing agricultural productivity, it also replaced older methods of farming with new, more resource-intensive methods that basically increased the yield on the basis of higher inputs. There was no double-speak about what it was meant to accomplish: it was a new way of doing agriculture. Like the Green Revolution, such programs are justified on the basis of reducing environmental impacts, and opening up trade. And also like the Green revolution, there are both stated and unstated motivations for providing assistance.
We draw attention to the fact that there is a lack of consideration of key types of applicable experience and analysis, for example, theories from anthropology, social studies of technology, and past experiences of technology transfer. Attending to such experience is critical to the development and execution of standard and codes, if they are to fulfill the objectives of the transfer program. Technical assistance affects far more than “just” technology. Thus assistance programs like those we consider here cannot legitimately separate their responsibility from pre-assessing potential impacts, direct or indirect, technical, economic, or social. To do this requires engaging in discussions with specialists from disciplines outside of those now in the formal policy-making arena.
In 1999 the American Water Works Association’s Research Foundation published a study of Residential End Uses of Water. http://www.waterwiser.org/frameset.cfm?b=2&wateruse=1.
They studied 1,188 homes in 12 sites, with 28,015 logged days of residential water use. They found that 42% of water use was indoor and 58% outdoor. While variations in water use depended on obvious factors such as lot size and climate, they also determined that:
The great water myth -- Mexican farmers are being urged to 'save' water by investing in more efficient irrigation. But the initiative may have the opposite effect. Fred Pearce reports on the makings of an environmental disaster. 28 January 2004, Independent Digital (UK) LtdIn a world of growing water shortages, farmers are becoming convinced that they need to grow, "more crops for every drop." Water efficiency is all the rage in an industry that uses two-thirds of the world's water. But could the farmers be wrong?
From the corn fields of Mexico to the paddy fields of China to the lettuce plantations of California, farmers are discovering that a few simple inexpensive techniques, such as lining irrigation canals to prevent leaks and delivering water directly to plant roots rather than flood fields, could cut world water use by a quarter or more.
The World Bank and aid agencies are pouring money into water efficiency. The water saved is being earmarked for growing more crops; for refilling empty rivers; and even for resolving international disputes. It could solve the US's current dispute with Mexico for not delivering all the water to Texas which was promised under a 1944 water-sharing treaty.
And yet one of the World Bank's chief advisers on water, Stephen Foster of the British Geological Survey, is horrified by the idea that making irrigation more efficient will free water for other uses. "It has the makings of a very dangerous myth," he says.
There is, he adds, a horrible flaw in the argument. Most of the water being "saved" is never truly wasted in the first place. Some, it is true, is lost to evaporation. But most - the water that seeps underground from fields and canals - eventually finds its way to nature's underground water reservoirs, from which millions of farmers subsequently pump water to supplement river water for irrigation.
This water is not being wasted at all, merely put into store; "saving" it will simply empty the water store. The repercussions, says Foster, could spell hydrological catastrophe in countries such as Mexico and India that rely increasingly on underground water for irrigation.
Andrew Keller of the International Water Management Institute, a World Bank-backed research body, agrees. In a recent paper, he argued that, "the classical concept of irrigation efficiency can lead to serious mismanagement of scarce water resources, because it ignores the potential re-use of irrigation return flows."
And that is what seems to be happening on the banks of the Rio Grande, on the border between Texas and the Mexican state of Chihuahua. After more than a decade of drought, this is a region desperately short of water. And the river is failing. In its middle stretches, downstream of El Paso, the Rio Grande is virtually empty. All the water has been taken by cities and farmers upstream, where the river is entirely within the US. The river only recovers a little when a new tributary, the Rio Conchos, arrives from Mexico bringing a small but significant flow.
Well done to the Mexicans, you might say. But Texas is not so charitable, for the Mexicans are in default of a treaty signed 60 years ago with the US to share the river's flow. Come drought or flood, the Mexicans are required to deliver at least 350,000 acre-feet of water to the border. But for the past decade of drought, as their own reservoirs have emptied, the Mexicans have not delivered enough. They are now four years behind with their water deliveries.
Texas farmers are angry, but Mexican farmers shrug their shoulders. "We have no water to give," one told me. "How can we give the Texans what we don't have ourselves?" But unless they make good soon, the US administration has threatened hydrological retribution by stopping flows down the other cross-border river, the Colorado, into Mexico.
Water engineers along the border hope they can stave off a water war. The Border Environment Cooperation Commission (Becc), a cross-border body set up under the Nafta free trade agreement, is investing in water-saving measures on Mexican farms in order to help them meet their treaty obligations.
This summer, engineers are lining the canals on the largest irrigated area, at Delicias, which waters fields of alfalfa, pecan and tomatoes for 90 miles along the River Conchos. And proud farmers there show off the perforated hoses they now run across their fields to deliver water where once they simply flooded the fields.
The plan is to halve the water use in the Delicias irrigation district. "The Americans will get what we save," says Marcial Marquez, chairman of the irrigation district. That, says Gonzalo Bravo of the Becc, "will be nearly equal to the amount of water Mexico is required to send to the US under its treaty obligations."
It sounds like a win-win situation, until you remember that farmers here also use a large amount of underground water to keep their crops growing, especially during the drought. The worry is that with less water allowed to percolate from fields into the underground reserves, those reserves will soon begin to falter.
The Delicias irrigation operations manager Ezequiel Bueno told me he had no such fears. So far, he explained, there are only sporadic signs of falling water tables. But local researchers I spoke to are worried and tell a very different tale.
"Some people think groundwater comes from Mars and surface water comes from Venus. They just don't realise how connected they are," says Hector Arias of the conservation group WWF, which has a project to help save the rivers of the Chihuahua desert. The tragedy is that, to meet their immediate treaty requirements for delivering water to Texas farmers, the Mexicans are imperilling the long-term future of their own underground water reserves. This story, albeit without the troubles of cross-border antagonism, is being played out in different forms across the world, as farmers pump ever more water from their underground water reserves while starving those reserves of the water they need to refill.
So what should happen down on the desert borderlands between the US and Mexico? Arias says that water managers need a better understanding of both the water cycle and the sheer scarcity of water.
Some farmers are taking the hint and giving up. Terry Bishop at Presidio in Texas is negotiating a deal that will allow him to sell his share of Rio Grande water - allocated to his land 80 years ago - to thirsty cities downstream such as Laredo. He would like to carry on farming, on what he believes is one of the longest continually cultivated stretches of land in the US. But, "the water is too valuable to stay here," he says.
Just over the border from Presidio in Ojinaga, where huge areas of irrigated farms have been abandoned to the desert in the past decade for want of water, the Mexican agriculturalist Humberto Lujan has another idea. He says the future lies in new crops that need less water. Why not grow ornamental cactuses, he says, or herbs such as rosemary, or mesquite, a desert shrub that provides both good timber and cattle fodder with very low water needs?
Lujan has planted a patch of abandoned farmland with these crops to show how it can be done. If the scheme succeeds, he says, he may not be producing more crops per drop - but he will certainly be earning more dollars.
The Top Ten Reasons Why We Need a Renewed Commitment to Energy Efficiency 2.16.04 Bill Prindle Deputy Director, American Council for an Energy-Efficient Economy <http://www.energypulse.net/centers/author.cfm?at_id=435 Looking back on the energy events of 2003 and recent years, with an eye toward the future, the energy policy experts at ACEEE offer their top ten reasons for renewing America’s commitment to energy efficiency.
10. Efficiency is much more than a personal virtue. In the spring of 2001 senior Administration officials opined that energy efficiency, while a “personal virtue”, is not a serious energy policy solution. That same year, the state of California, faced with an electricity crisis, mounted a multi-pronged energy efficiency program that achieved an unprecedented 7% reduction in electricity demand, corrected for weather and economic factors [http://aceee.org/pubs/u021full.pdf]. This reduction in demand succeeded in preventing any further blackouts in the state and was the major factor responsible for reducing excessive wholesale prices in the California power market, saving customers billions of dollars. State officials close to the situation said it was this demand-side response, led by energy efficiency, that contained the crisis. This experience has cemented the role of energy efficiency as a “public good” that has enormous benefits for our economy and the environment.
9. Efficiency is the key to a sustainable economy. Over the last 30 years, the energy intensity of the U.S. economy has fallen by more than 40%. That means that without energy efficiency, we would be using 70% more energy to support our economic growth. It’s not likely that we could have found the land, the capital, the infrastructure, or the fuel to sustain that much demand growth. In faster-growing economies, this is even more critical. In China, for example, the electricity system is currently overstrained, threatening several planned factory openings and thus crimping China’s economic growth. That’s why China is developing some of the world’s toughest efficiency standards for vehicles and other equipment, and sees efficiency as a central principle for sustaining a strong economy.
8. Efficiency is no-regrets insurance against global warming. Most of our greenhouse gas emissions come from energy consumption in powerplants, factories, buildings, and vehicles. ACEEE research shows that without efficiency, carbon emissions would be 30% higher today. A 2001 ACEEE study calculated that the U.S. can reduce its carbon emissions back to 1990 levels by 2020, through cost-effective policies such as appliance standards, building codes, public benefits funds, fuel economy standards, accelerated use of combined heat and power, and tax incentives [http://www.aceee.org/pubs/e012full.pdf]. These measures will help, not hurt, the economy; so regardless of the ultimate relationship between energy use and climate, energy efficiency investments are a “no-regrets” insurance policy that will provide net benefits in any case.
7. Efficiency can cut powerplant waste in half. Our aging powerplant fleet (average age approaching 50 years), with a typical thermal efficiency of less than 35%, wastes more than one-quarter of all the energy consumed in the United States. Modern combined heat and power (CHP) systems offer a form of distributed generation that attains net thermal efficiencies up to 80%. ACEEE research estimates that over 150 GW of power generation capacity could be developed as CHP between now and 2020 [http://www.aceee.org/pubs/ie983.htm], which is almost half of forecast demand (and would be over half of forecast demand if rigorous end-use efficiency were pursued in the electricity sector). To get CHP’s benefits, however, we need fair and consistent national interconnection standards, and we need state utility tariff policies that eliminate predatory pricing for standby and supplemental power. We also need air quality policies that allocate emissions based on useful output, not on fuel input, and that streamline permitting for smaller facilities.
6. Efficiency policies are needed to overcome barriers and market failures. Academic economists often theorize that market forces spur the optimal level of investment in energy efficiency, and that public policies to increase efficiency are not needed. These theorists ignore the realities of the marketplace, which throw up numerous market barriers and cause markets to fail to make optimum efficiency investments. For example: · Builder-Buyer. Homebuilders, appliance manufacturers, automakers, and other producers of energy-using equipment are more concerned about up-front cost that operating cost. They compete based on reducing the first cost of their product, not the operating cost to the user. They thus often fail to offer more energy-efficient models that may cost a little more initially but would minimize consumers’ life-cycle costs. This “builder-buyer” barrier is why appliance standards, building codes, and fuel economy standards are needed to keep efficiency levels improving. · Information Gap. Energy-using technology is sold to millions of homeowners, car buyers, and other consumers, many of whom don’t understand the science or economics of efficiency, and thus don’t know what to look for in a product. This lack of information and awareness makes efficiency invisible in many markets, making it hard to sell the benefits of efficiency compared to the more obvious attributes of the product. To bridge this “information barrier”, we need labeling and branding programs like Energy Star to make efficiency more visible to consumers. · Split Incentives. More than a quarter of American homes, and more than half of American offices, are rented. That means the landlord typically pays for energy-using equipment, but the tenant typically pays the energy bill. And in larger organizations, procurement people buy equipment on low-bid principles, accounting people pay energy bills, and engineering people keep facilities running, splitting the responsibility for energy efficiency. These “split-incentive” barriers increase the need for building codes, appliance standards, and public benefits funds to reach these sectors. · Utility Dependence on Energy Sales. For most utilities and energy suppliers, shareholder return is tied to the amount of energy sold through the utility system. Under the typical state rate regulation system, reductions in energy sales mean lost revenues and lost returns to shareholders. This makes most utilities natural opponents to energy efficiency investments. Some states, such as California and Oregon, have “de-coupled” revenues from energy sales or pursued other regulatory mechanisms to overcome this predisposition to increase unit sales. Such approaches can allow utility companies to operate efficiency programs without sacrificing profitability.
5. Energy efficiency means economic prosperity. Efficiency is an engine of sustainable economic growth. If we had not become 40% more efficient in recent decades, we would be spending an extra $400 billion a year on energy, above the current $600 billion we now spend. This would divert an extra 4% of our GDP to energy costs, costing us over $1000 per person in direct energy bills plus increased costs for the products and services we buy. Energy efficient products and services already account for tens of billions of dollars of direct sales, and drive a growing number of jobs, investments, and profit margins. So there is no conflict between energy efficiency and a thriving economy. In fact, efficiency is a foundation of economic strength.
4. Energy efficiency clears the air. Since the majority of regulated air pollutants come from powerplant smokestacks or vehicle tailpipes, energy efficiency policies that reduce electricity use or vehicle energy use also reduce air pollution. The Clean Air Act Amendments of 1990 made specific provisions for utilities to use energy efficiency as an emission reduction option [http://aceee.org/pubs/u034full.pdf]. EPA’s nitrogen oxides emission reduction regulations have recognized the value of energy efficiency in reducing those emissions. The State of Texas, in seeking to meet its NOx deadlines, implemented a statewide building energy code in 2001 because of its emission reduction benefits. States in the Northeast are banding together to use energy efficiency as part of a comprehensive strategy to cut air pollution across the region. Yet federal legislative initiatives such as the Administration’s Clear Skies bill fail to recognize these benefits, and don’t allow end-use efficiency and other indirect emission reduction strategies as part of their compliance regimes. This omission should be corrected so that energy efficiency is a recognized source of emission reductions.
3. Energy efficiency is vital to national security. Defense and foreign policy professionals agree that our oil dependence on volatile regions such as the Middle East is a key threat to U.S national security. The fact is that without the fuel economy improvements we’ve achieved since the 1970s, we would be importing another 4 million barrels of oil a day, putting Middle East oil producers more firmly in the driver’s seat.
Because Gulf producers continue to control the world’s low-cost marginal or “swing” production capacity, modest changes in world oil demand have an enormous effect on their economic and political power. And since the U. S. consumes over one-quarter of world oil supply, we are a critical “swing” consumer. It was the fall in U.S. oil demand in the 1980s that initially weakened the OPEC cartel, but surging sales of lower-mileage SUVs have accordingly driven U.S. demand back up in the last decade. ACEEE research shows that, using today’s technology, we can improve our fuel economy by 50% over a 10-15 year period, with a 5% increase in vehicle cost and net lifetime savings to the buyer [http://www.aceee.org/energy/cafe.pdf]. But since automakers have strong negative incentives to build higher-mileage vehicles, we need strong new fuel economy standards, tax incentives, and other means to reduce our transportation oil demand.
2. Energy efficiency keeps the lights on. On August 14, 2003, up to 50 million people in the U.S and Canada lost power in the largest blackout in North American history. While the immediate cause has been linked to power system operating practices and outmoded transmission technologies in parts of the U.S. grid, the fact remains that this emergency happened on a hot weekday afternoon, when air conditioning demand pushed the system to the breaking point. Excess customer demand overheats transformers, overloads transmission lines, and strains any of the other weak points in the power system. So while we need clearer operating standards and a rationalized regulatory system for U.S transmission systems, we also need to invest in energy efficiency and other forms of demand response to keep both the physical infrastructure and the financial markets of our electricity system in balance. Efficiency investments have already avoided the need for more than 30,000 MW of peak capacity; ACEEE research shows that by targeting investment in efficiency programs that have maximum peak impact, we could avoid another 64,000 MW of peak demand [http://www.aceee.org/utility/index.htm]. These savings would not only reduce strain on the grid during peak hours, thereby reducing the risk of blackout, they would also exert strong leverage on peak power prices, saving money for all customers on the system.
1. Efficiency is our first line of defense against soaring natural gas prices. The biggest energy story of 2003 has been the realization, right up to the desk of the Chairman of the Federal Reserve, that North America’s natural gas markets are changing dramatically, and that this is not a short-term blip but a long-term structural shift. Demand has outstripped, and is expected to continue to outpace, our continental production capacity. A new floor is appearing under gas prices: from the soft $2/MCF wellhead prices of the 1990s, market forecasters are projecting wholesale prices at $4.50/MCF and up for the foreseeable future. New supply investments, such as the Alaskan pipeline and LNG imports, will take years to come on line, and depend on higher gas prices to be financially viable. Energy efficiency is one of the few realistic policy strategies that can bring balance to natural gas markets, both for the next few years and for the longer term. A 2003 ACEEE study shows that modest efficiency gains of 2% or less can have major price impacts in tight gas markets, driving down wholesale prices by about 20% or $1/MCF over the next five years. Pursuing this strategy would save consumers over $100 billion on a total investment of just over $30 billion, including a $7 billion public policy cost. [http://www.aceee.org/energy/efnatgas-study.htm]. In this brave new world of pricey and volatile natural gas markets, energy efficiency is a key hedging strategy that can help get us through what could otherwise be an economically devastating problem.
On and Off are Not the Same: The Case for Conservation in an Efficient World by Paul Grover, Kilawatt Partners 444 Juniper Ridge Shelburne, VT 05482 802 985-2285
The State of Vermont has the nation’s first statewide energy efficiency utility. This was a landmark development, but now it is time to take the next step.
Hopefully, no Vermonter gets up in the morning and says, “Today, I am going to waste energy.” We are smarter than that: we see the value in using only the electricity we need. Our motives to use less energy may be ethical or practical. Some say that exhausting our non-renewable energy resources is robbing future generations of the same benefits we have enjoyed. Others know that reducing electricity costs increases profits and visibility.
When discussing the future of Vermont’s energy challenges, most people, even those in the “business”, use the terms “efficiency” and “conservation” interchangeably. This may turn out to be a grave mistake. When we understand just how different these terms are, the solutions to our energy problems, present and future, become much clearer.
Efficiency
Engineers originally created the term “efficiency” to quantify the performance of machines. Efficiency compares the energy we put into a machine with what comes out of the machine. If you put 100 energy units into a motor that produces 60 units of motor energy, that motor is 60% efficient. All things being equal, a more efficient machine uses less energy than a less efficient machine.
What people may not realize is that “energy efficient” equipment must be on to produce energy savings. And second, the longer it’s on, the more we “save.” The message is that it is fine to use as much energy as we want as long as we use it efficiently.
Efficiency enables Vermonters to get more from what they use, without limits. For example, more efficient cars get more miles per gallon, yet we use more gas every year by driving more miles per vehicle, driving faster, driving alone and driving shorter trips. Deep down, efficiency tells us that the more we drive our efficient cars, the more gasoline we “save,” so, we are off the hook. Efficiency is like buying low-fat potato chips to “save” calories and then feeling good about eating the whole bag as part of our diet.
This approach to saving energy is not good news for our environment, our health or our increasing dependence on unstable foreign energy resources. When confronted with this view, efficiency proponents argue that resource use would have gone up even faster had we not funded efficiency equipment with taxpayer dollars. This is like continuing the same losing strategy over and over in a football game, only to be surprised at the resulting score!
Conservation
Energy conservation is quite different from energy efficiency. The late Fred Tuttle best summed up “conservation” when he told me, “If y’ don’t need it, turn the durn thing off.” The goal of conservation is to minimize resource use and eliminate waste. While efficiency gets us more bang for the buck when equipment is on, conservation gives us even greater benefit when that same equipment is off.
While efficiency and conservation may have the same motives, nothing beats energy conservation. This simple example illustrates the difference:
If energy efficiency is our only concern, very efficient lights are lit whether we need them on or not. The longer we burn our energy efficient bulbs, the more we “save.” Efficiency can waste a lot of electricity.
But, we might ask, doesn’t efficiency reduce the demand for energy resources? After all, since 1992, the State of Vermont has mandated that our utilities, and now Efficiency Vermont, motivate Vermonters to purchase energy efficient equipment – lamps, ballasts, motors, milk coolers, homes, and so on. The fact is that after spending many millions of ratepayer dollars on efficiency, electricity use per commercial and industrial customer in Vermont has increased during this period, not decreased since 1992. For example, between 1992 and 2001, electricity use per Vermont business increased 8%, even with the recession.
So, what about energy conservation? For the past couple of years, I have been working with Vermont homeowners and business people to analyze what they have turned on, when it needs to be on and how to safely turn it off when it’s not needed. It’s a blend of Yankee ingenuity and old-fashioned common sense, like Fred Tuttle’s. Most of the businesses with which I work have already invested in energy-efficient equipment. And yet, we can find ways to reduce their electricity use by 30-40% with returns on investment of less of 25% or more, compared to multi-year paybacks for investing in energy efficiency equipment. Such successes demonstrate just how much electricity and fossil fuels we all waste and how cost-effective it is to stop this waste. This is good news for our environment, our climate and our health – and it decreases our dependence on foreign energy resources.
From a policy point of view, these successes also demonstrate the shortcomings of solely promoting efficiency. In this case, we must invest in efficient products and landfill the old ones. And those products must be on to realize savings. Much greater energy savings come from using our existing technology only when necessary. It’s not just the car we own, it’s how much gas we use. It’s not the type of lamp we buy that’s most important, it’s how and when we use the light switch. And, it is not up to the State of Vermont or our electric utilities to create our energy future, it’s up to you and me.
So here is the bottom line. Efficiency and conservation are not the same. Conservation means increased comfort and productivity, since no one will miss the energy we waste. Conservation and efficiency produce very different results. And finally, using more is not using less and on and off are not the same.
Cook, Earl Ferguson, Man, Energy, Society, Freeman.: 1976 ISBN 071670725X, Page 135
Roseland, Mark. Toward Sustainable Communities. Canada: 1998. ISBN 086571374X , Pages 1 and 2
Canadians and Americans consume more energy per capita than any other nation. Environmental impacts of our consumptive lifestyles include ozone layer depletion, acid rain, smog, potential climate change, and other forms of pollution and environmental degradation. Our addiction to energy also manifests itself in congested roads, urban sprawl, excessive heating, cooling, lighting, and ventilation expenditures in buildings, costly inefficiencies in commercial and industrial equipment, weaker local economies, and excessive taxes.
Citizens and their governments hold tremendous power to change our patterns of consumption and support sustainable ways of using energy resources. Designing more energy-efficient buildings, and retrofitting existing homes, office and civic buildings saves millions of dollars in energy expenditures, and frees up money for investment in schools, hospitals, community economic development, and a more secure future. Reducing consumption is usually more cost-effective than expanding supply. By increasing efficiency, the same amount of electricity cam serve more users without requiring massive capital investments to expand power plant capacity.
If additional supply is needed, renewable energy production, such as wind power and photovoltaic (solar) power, as well as cogeneration are more sustainable options. For heating options, technologies such as ground-source heat pumps and districts heating, are more efficient and environmentally responsible than most conventional heating systems.
By encouraging energy efficiency and clean, renewable or efficient energy supply strategies, communities foster local self-reliance and economic diversification. This is not science fiction—these are “off-the-shelf” technologies and techniques that are available today. All that is required is public and political will.
Energy-efficiency simply means “more bang for your buck.” It implies use of products, such as refrigerators, lightbulbs, washing machines, computers, printers, copiers, industrial motor systems, air conditioners, space heaters, and ventilation systems that deliver the same service as other units, but with a fraction of the energy or electricity demands. Energy-efficient building use strategies and technologies, such as passive solar design, light shelves, light-tubes, and high-performance windows, to reduce energy consumption by minimizing or even elimination the need for heating, cooling, ventilation systems, and day-time lighting.
Campbell, Colin J., and Jean H. Laherrere. The End of Cheap Oil. Scientific American, March 1998, Page 81
Predicting when oil production will stop rising is relatively straightforward once one has a good estimate of how much oil there is left to produce. We simply apply a refinement of a technique first published in 1956 by M. King Hubbert. Hubbert observed that in any large region, unrestrained extraction of a finite resource rises along a bell-shaped curve that peaks when about half the resource is gone. To demonstrate his theory, Hubbert fitted a bell curve to production statistics and projected that crude oil production in the lower 48 U.S. states would rise for 13 more years, then crest in 1969, give or take a year. He was right: production peaked in 1970 and has continued to follow Hubbert curves with only minor deviations. The flow of oil from several other regions, such as the former Soviet Union and the collection of all oil producers outside the Middle East, also follows Hubbert curves quite faithfully.
The global picture is more complicated, because the Middle East members of OPEC deliberately reined back their oil exports in the 1970s, while other nations continued producing at full capacity. Our analysis reveals that a number of the largest producers, including Norway and the U.K., will reach their peaks around the turn of the millennium unless they sharply curtail production. By 2002 or so the world will rely on Middle East nations, particularly five near Persian Gulf (Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates), to fill in the gap between dwindling supply and growing demand. But once approximately 900 Gbo gave been consumed, production must soon begin to fall.
Barring a global recession, it seems most likely that world production of conventional oil will peak during the first decade of the 21st century.
More on peak oil:
http://news.bbc.co.uk/1/hi/business/3777413.stm Is the world’s oil running out fast? By Adam Porter at the Peak Oil conference in Berlin
If you think oil prices are high at $40 a barrel then wait till they are four times that much. How will you pay to run your car? How will you get the children to school?How will you heat your house? How much will transported food go up in price?
How will we pay for plastics, metals, rubber, cheap flights, Simpson’s DVDs, 3G phones and everlasting economic growth? The basic answer is, we won’t. This is the message from the Association for the Study of Peak Oil (ASPO). The group of oil executives, geologists, investment bankers, academics and others has been warning the world of high oil prices, and the ensuing fallout, for some years now.
The end of cheap oil
It includes a diverse range of oil industry insiders. People like Ali Bakhtiari, head of strategic planning at Iran’s National il Company (NOIC), Dr Colin Campbell, a former executive vice president of Total-Fina, and Matthew Simmons, an energy investment banker and adviser to the controversial Bush-Cheney energy plan. They are united by one idea, that global oil production is about to peak, which in turn will signal the permanent end of cheap oil. And they warn that this is the foundation of the current rise in oil prices.
Who hurts when prices explode?
“Oil is far too cheap at the moment,” says Mr Simmons. “The figure I’d use is around $182 a barrel. We need to price oil realistically to control its demand. That is because global production is peaking.”
Large new oil fields are ever more difficult to find “If we price oil correctly,” Mr Simmons says, “it could give us time to find bridge fuels, fuels to fill the gap between an oil economy and a renewable economy. But I don’t see that happening.” The adherents of the peak oil theory warn the decline of world oil output will force oil prices higher for good, and that the knock on effects could be catastrophic.
“In my opinion, unfortunately, there will be no linear change,” says Iran’s Ali Bakhtiari. “There will only be sudden explosive change.”
“The people who will be least affected will be the super poor, who already have no access to energy, and the super rich who do not care if oil is $100 a barrel.”
“It is everyone who is in the middle who will be hurt the most,” says Mr Bakhtiari. “When the crisis comes there will be enormous changes.”
Oil rationing?
Dr Campbell says endless growth is not possible
Much of ASPO’s predictions stem from the calculations of Dr Campbell. His work on oil reserves has long suggested that many official oil data are either flawed estimates or at worst downright lies. Scandals like the 23% of ‘lost’ reserves at Royal Dutch Shell have helped to boost interest in his work.
False reserves threaten the security of energy supply, just as do bombs under pipelines. Dr Campbell’s conclusion: oil production and consumption should be regulated by governments. “Many reserve figures are highly questionable,” says Dr Campbell. “Many great oil fields are increasingly old and inefficient. But I don’t think oil is easy to produce with a sniper behind every palm tree.”
“The way to increase energy security is to reduce demand,” he says. ‘Difficult times’ At ASPO’s recent conference in Berlin, companies such as BP and Exxon and men such as Fatih Birol, chief economist of the International Energy Agency, began to talk to the proponents of the peak oil theory. Whilst they may not agree with Dr Campbell’s theories, their attendance highlighted ASPO’s emerging importance in the oil debate.
In public, Mr Birol denied that supply would not be able to meet rising demand, especially from the buoyant economies in the USA, China and India. But after his speech he seemed to change his tune. “For the time being there is no spare capacity. But we expect demand to increase by the fourth quarter (of the year) by three million barrels a day.”
He pinned his hopes for an increase in production squarely on troubled Saudi Arabia. “If Saudi does not increase supply by 3 million barrels a day by the end of the year we will face, how can I say this, it will be very difficult. We will have difficult times. They must invest.”
Can Saudi deliver?
But even Mr Birol admitted that Saudi production was “about flat”. Three million extra barrels a day would mean a huge 30% leap in output in just a few months.
North Sea oil production is in decline
When BBC News Online followed up by asking if this giant increase in production was actually possible rather than simply a desire he refused to answer. “You are from the press? This is not for you. This is not for the press.”
Asking other delegates - admittedly supporters of the peak oil theory - whether such a steep increase was feasible, the answers were unambiguous: “absolutely out of the question,” “completely impossible,” and “3 million barrels - never, not even 300,000.” One delegate laughed so hard he had to support himself on a table. Some recent figures tend to back up ASPO’s outlook. North Sea production is declining at an increasing rate, having peaked in 1999. Not at the predicted flat rate of decline of 7%, but gradually accelerating from 7% to 8.5% to 11%.
And the number of major new oil fields discovered around the world fell to zero for the first time in 2003, despite an obvious increase in technological expertise. “We need transparency with the figures,” says Dr Campbell. “This avoids profiteering from shortages, the collapse of poor countries and it will stimulate alternatives.”
“Consumer countries need to be able to audit fields, but at the same time ‘flat earth’ economists who believe in endless growth need to change their ideas.” And Dr Campbell has a dire warning: “If the real figures were to come out there would be panic on the stock markets, in the end that would suit no one.”
“Paying the Pumper” By J. Robinson West Friday, July 23, 2004; Page A29 <http://www.washingtonpost.com/> With the return of the highest oil prices since the energy crisis of the early 1980s, there are growing cries of alarm that the world is running out of oil. Some speculate that Saudi Arabia has reached maturity as a producing state and that its production will decline. Others cite the Hubbert curve, which postulates that once more than 50 percent of reserves are produced, output inevitably declines.
The world will not run out of oil soon, but there’s still good reason for alarm. What the world is running short of is production capacity. There’s plenty of oil—we just can’t get it out of the ground. It’s important to understand some history to appreciate the problem.
Beginning in the 1960s and continuing through the energy crisis of the ‘80s, the oil industry was restructured. The Western international oil companies, which had controlled reserves and production just about everywhere except the Soviet Union and Mexico, had many of their largest assets nationalized by governments in such countries as Saudi Arabia, Kuwait, Iran, Iraq and Venezuela. These governments organized national oil companies to manage their resources. National companies are government agencies accountable to their governments first and the international markets second.
In response, competition among the international firms became intense as they focused on exploration in places where they were still permitted to invest: the United States, Canada, the North Sea and Australia. These companies diversified global oil production to the extent they could. With the development of sophisticated technology, they moved into deep-water production, notably in the Gulf of Mexico and off the coast of West Africa. Whenever a new petroleum province opened for investment, they tried to enter—in Yemen, Colombia, the Caspian Sea and Russia. The technical and political risks were immense, and some large investments failed.
The indigenous oil industries in these countries, usually national companies, resist international foreign investment. They don’t want the competition, nor do they wish to share the economic rent from the oil. When oil prices were low, and governments needed money, as in the 1990s, some foreign investment was permitted in certain countries, often over the objection of the national company. Substantial production growth resulted. Oil prices are now high, and most of the national oil companies are capable of meeting the financial requirements of their governments without foreign investment or interference.
The world economy is confronted with a situation in which there are large reserves—more than in 1985 -- but in places where it is hard to tap them. The international oil industry is the only business in the world in which global capital cannot invest in the lowest-cost, most efficient production. National oil companies provide about 60 percent of the world’s production but control 87 percent of the reserves, and their share will rise. Many commentators point out that a rising share of our oil will come from fewer countries, such as Saudi Arabia and Iraq. Should these countries continue to maintain their production, or even increase it, as we expect, there will remain the fundamental problem of increasing production capacity sufficiently to meet growing world demand. For example, sustained Saudi production is likely to grow by no more than 3 million barrels per day over the next 10 years, but worldwide demand, driven by the United States and China, is expected to grow by 15 million barrels per day.
The capabilities of the national oil companies vary widely. Some are as competent as the international firms, with excellent management and efficient operations. Others are deeply corrupt and lack the capital and skills to meet the sophisticated requirements of portfolio and reservoir management. Furthermore, exploration for new reserves can involve massive risks, which most governments are unwilling to underwrite, whereas the internationals, with huge balance sheets and diversified portfolios, are quite comfortable with these risks.
The thesis of the Hubbert curve is correct, but the conclusion that a fall in global oil production has inevitably begun is not. The Hubbert curve analysis applies where full commercial exploitation has taken place, but in many areas, other factors, including politics and policy, weigh in. It is true that production in most of the United States, Canada and the North Sea is in decline—there, exploration and production have been exhaustive. But the most oil-rich areas, notably Mexico, Venezuela, Russia and the Middle East, have not been fully explored.
National oil companies may open up for investment if there are enough political and economic incentives. Production may also increase if there are changes in technology. This has happened many times before, most recently with the development of deep-water technology in the 1980s and ‘90s. One approach includes enhanced oil recovery from existing fields, where more than 60 percent of the oil often remains in place. Another breakthrough may come in efficient production from extra-heavy oil and tar sands, which is now very costly and capital-intensive. There are greater reserves of extra-heavy oil in Venezuela and Canada than in Saudi Arabia. Likewise, the industry has been seeking commercial breakthroughs in gas-to-liquids technology, converting natural gas reserves into ultra-clean diesel fuel.
Supply will increase if costs remain high long enough to justify the huge investments necessary. But oil markets have been cyclical for more than 120 years, and too much investment in capacity, as in the 1970s and ‘80s, inevitably leads to price crashes, followed by further commercial and political uncertainty.
Virtually every thoughtful policymaker knows that there is a serious problem in energy, but they are afraid to act. The U.S. government can do little to increase oil supply, but steps can be taken to reduce demand. Getting between Americans and their cars is the third rail of American politics. But if the American people refuse to accept some modest discomfort now, they will almost certainly be dealing with higher prices and serious economic disruption later. The obvious solution is for politicians to gather their courage and tackle demand.
The writer, a former assistant secretary of the interior, is chairman of PFC Energy, strategic advisers on international oil and gas.
Peering into oil’s futureExperts try to predict when the world will start running low on the natural resource that keeps all the engines running Verne Kopytoff, Chronicle Staff Writer <mailto:vkopytoff@sfchronicle.com> Sunday, March 21, 2004
The world began running out of oil soon after the birth of modern drilling during the 1850s. The question since then has always been: When will the spigot start drying up? Mounting evidence suggests that an important turning point may be close. According to several studies, oil production is expected to begin a permanent decline within a few years, prompting social and economic upheaval across the globe. Or maybe not. A rival school of thought says that oil’s imminent demise is exaggerated and that crude will be plentiful into the near future.
Whom can you believe? It all depends on how accurate researchers are in calculating such complex variables as future oil consumption, production and discovery. “One has to be very skeptical about any prediction,” said David Goodstein, author of the recently published book “Out of Gas: The End of Oil,” and a physics professor at California Institute of Technology in Pasadena.
The numbers that some researchers are relying on “are extremely undependable” and are being put forth “by companies and countries that have strong interest in tilting them one way or another,” Goodstein said.
Worries over falling crude production inevitably arise when fuel prices spike, as they have recently. Oil futures, at $38.08 per barrel, are near a 13- year high, while the average price of a gallon of unleaded gasoline in California hit a record $2.18 earlier this month.
Historically, researchers have been woefully inept at predicting a permanent decline in global oil production. They have made dire forecasts since at least the 1920s, only to eat crow as pumping increased.
What researchers are trying to determine is when oil production will begin to taper off as a natural consequence of dwindling reserves. At some point, there just won’t be enough oil left to keep pumping increasing amounts from underground, analysts agree.
As it is, global oil production has grown most years since the turn of the last century. The world produced nearly 67 million barrels of oil a day in 2002, up 11 percent from a decade earlier, according to the U.S. Energy Information Administration. The added crude has fueled economies across the globe, including the United States, and enabled millions of new drivers to take to the road. Without the new supplies, oil and gasoline would undoubtedly cost a lot more.
But the era of abundance is in peril, judging from an important industry yardstick. More oil is being produced each year than discovered. It’s similar to when you spend more money than you bring in. Unless the pattern changes, your bank account will eventually run dry. The trend started in 1986, according to IHS Energy, an energy research firm based in Houston. The only exception since then was 1991, when a big field in the Persian Gulf, off the coast of Iran, was discovered.
“There are discoveries being made all the time, but they are smaller and smaller,” said Jim Meyer, director of the Oil Depletion Analysis Center, a London organization that disseminates information about the threat of dwindling supplies. “The big fields have all been found, or at least they’re few and far between.” If big reserves are to be found anywhere, they will likely be in the former Soviet Union and in the polar regions, according to analysts.Libya, Iran and Iraq, all of which have been largely unexplored in recent years, are also possibilities.
The ebb and flow of oil production is known as the “Hubbert’s Peak,” after M. King Hubbert, a Shell geologist. He gained fame for correctly predicting in 1956 that U.S. production would peak in the early 1970s and then decline. Hubbert’s theory is that oil production, when plotted on a chart, is a bell curve. Production rises quickly as big, cheap-to-operate fields open. It flattens out as those fields become depleted. New, smaller, more costly fields can’t offset the loss, leading to the curve’s inevitable decline.
Differing dates
Today’s generation of oil researchers is applying Hubbert’s principles to global production. They agree that pumping will eventually peak worldwide, but they differ widely on exactly when.
Colin Campbell, a retired geologist in Ireland who has worked throughout the oil industry, including Texaco, BP and Amoco, says the peak will come before 2010. It may be already happening, he said, given that global oil production has declined slightly since 2000. Some researchers say the drop is a temporary and deliberate response by oil producers to cut back because of the bad economy and lower demand.
Campbell, however, believes that virtually all nations are pumping at full capacity. “I think we may live to see that 2000 may have been the peak,” Campbell said. “We’re hitting capacity again now—oil prices are surging. It’s reasonable to think that by 2010, you will have a volatile period of recession, oil spikes and price shocks.”
The U.S. Energy Information Administration paints a different picture. The agency, part of the Department of Energy, pegged the peak at anywhere between 2021 and 2112. The wide time frame takes into account 12 scenarios. Different assumptions about production growth and reserve size produce different peaks.
The earliest peak, in 2021, is achieved with 3 percent annual growth in crude production and relatively low reserves. The latest peak, in 2112, assumes no production growth and big reserves.
Pete Stark, vice president of industry relations for IHS Energy, agrees with the Energy Information Administration that there is no immediate crisis. Production won’t crest until at least 2020, and probably much later, he said. “We don’t see it as much of a peak, but more of a plateau,” Stark said. “It’s not a calamitous situation. It’s one we have time to adjust to.”
The oil industry operates under the assumption that peak oil production is decades away, if not more. John Felmy, an economist with the American Petroleum Institute, an industry trade group, characterized more imminent forecasts as “Chicken Little predictions.”
Part of the reason researchers are so divided is that there is no standard formula to determine oil reserves. Instead, they rely on a range of estimates of how much oil is available to pump. For example, the U.S. Geological Survey says that there are up to 3.9 trillion barrels. Campbell estimates reserves at about half that amount.
The biggest known onshore and offshore reserves are in Saudi Arabia, followed by Canada and Iraq, according to the Oil & Gas Journal. Unreliable numbers Reserve figures provided by oil companies are often unreliable, according to some analysts. To meet Wall Street expectations, the companies sometimes understate or overstate the totals, the analyst said. In the past couple of weeks, for example, Royal/Dutch Shell has lowered the numbers for its proven reserves twice, for a total of more than 20 percent, forcing the resignation of the firm’s chairman. Company executives had designated some oil and natural gas as likely to be pumped when in fact drilling was questionable.
Securities and Exchange Commission rules require companies to include only oil that is “likely recoverable” in their proven reserves. However, the rules apply only to firms that trade publicly in the United States.
Getting clarity on reserves is further clouded by figures provided
by oil- producing countries with nationalized industries, according to analysts. Some countries, especially members of OPEC, have raised reserve estimates significantly without explanation or have reported the same reserves several years in a row, apparently failing to deduct ongoing drilling. “It’s a minefield,” said Meyer, from the Oil Depletion Analysis Center. Researchers generally factor additional oil from future discoveries into their calculations. But potential improvements in technology, such as the ability to drill deeper from offshore platforms and the extra oil it may produce, are not usually considered.
Analysts readily admit that future developments in the oil industry might require them to adjust their forecasts. Indeed, the peak in production may be further off than they currently believe, they concede.
However, pushing the date more than a few years into the future would require the discovery of vast quantities of oil, according to Meyer. Only finding the equivalent of a Saudi Arabia or two would make a significant difference, he said.
“Even if these near-term forecasts are off by a decade, this should still be of public concern,” Meyer said.
Some elected officials, including President Bush, have advocated opening parts of the Arctic National Wildlife Refuge in Alaska for drilling to help make the United States less dependent on imports and to help lower oil prices. An Energy Information Administration report released last week said up to 876, 000 barrels of crude a day could be produced in the refuge by 2025.
On a global scale, the amount would comprise less than 1 percent of all production expected in that year. The added drilling, if it ever happens, would do little to offset a decline in world oil production, according to analysts. Some of the analysts who foresee imminent drops in oil production advocate making greater use of alternative sources of energy, including nuclear, geothermal and biomass. They all call for conservation.
“One thing we could do now is use less oil now, and that can certainly help soften the blow and put off the peak,” said Goodstein, the author and Cal Tech professor. Felmy, the industry economist, said oil companies already have initiatives to develop fuel cells, windmills and solar and hydrogen power. He was especially enthusiastic about the potential for frozen methane, which he described as abundant in permafrost and underwater.
Stark, from IHS Energy, was sanguine about doomsday scenarios. Even in the improbable event that no new oil is discovered, he said, the world can continue consuming existing reserves at the current pace for another 106 years.
Table (1) Oil production and reserves
Some researchers are predicting that oil production will begin to decline within a few years. The following charts show current production and known reserves.
Top world oil producers, 2002 -- In millions of barrels per day
United States - 9.08 Saudi Arabia - 8.54 Russia - 7.65 Mexico - 3.61 Iran - 3.54 China - 3.37 Norway - 3.33 Canada - 2.94 Venezuela - 2.91 United Kingdom - 2.55 United Arab Emirates - 2.38 Nigeria - 2.12 Iraq - 2.04 Kuwait - 2.03
Table (2):. Countries with the biggest oil reserves, 2003 In billions of barrels
Saudi Arabia - 261.8 Canada - 180.02 Iraq - 112.5 United Arab Emirates - 97.8 Kuwait - 96.5 Iran - 89.7 Venezuela - 77.8 Russia - 60 Libya - 29.5 Nigeria - 24 United States - 22.67 China - 18.25 Qatar - 15.2 Mexico - 12.62. Sources: Energy Information Administration, Oil & Gas Journal, Map: ESRICHART (3):
IS OIL PRODUCTION ABOUT TO DECLINE?
Oil production has mostly increased to satisfy the world?s growing appetite for crude. If predictions are correct, production may soon begin to decline, sending the line on this chart downward permanently.
Table (3) | |||||||||||||||||||||||||||||||