Saturday, November 14, 2009

How not to save energy

The second US energy crisis occurred in 1979, after the Shah of Iran was deposed, and oil production in Iran plummeted from 6 million barrels per day to under 2MBD (black line in the chart to the right). Saudi Arabia and other OPEC countries increased production to try to offset this, but the results were uneven. While the overall reduction in supply was only 4 percent, panic resulted, leading to hoarding behavior and shortages.

President Carter responded to this with a package of energy legislation and his now-famous "malaise" speech, in which he discussed an American crisis of confidence and urged people to use less energy.

The most correct thing the President said in terms of energy policy was that "We often think of conservation only in terms of sacrifice. In fact it is the most painless and immediate way of rebuilding our nation's strength." But this lesson was soon lost as the government acted to equate conservation with deprivation.

An example is in the certificate above. The Emergency Building Temperature Restrictions were implemented the day after Carter's speech and set maximum temperature levels for public buildings in the heating season and minimum temperature levels in the cooling season, as well as maximum temperatures for hot water. Specifically, space heating was restricted to a maximum of 65 degrees Farenheit, hot water temperature to a maximum of 105 degrees F, and cooling temperature to a minimum of 78 degrees F.

The damage done to American's understanding of energy conservation was that a policy that could have been equated with efficiency, competitiveness, and improved comfort was instead seared into the public consciousness as sacrifice and discomfort. (It is no accident that the regulations were rescinded by President Reagan shortly after taking office.)

I had seen a similar portrayal during the first energy crisis in 1974, when the OPEC nations imposed an embargo on petroleum sales to the United States and other Israeli allies. Rogers Morton, Secretary of the Commerce at the time said, "Americans don't want to conserve energy. They want to win." At a private meeting at Harvard during that period, as an intense 25-year-old Deputy Director of the MA Energy Policy Office, I rather directly and perhaps a little rudely told Energy Czar Frank Zarb that he was dead wrong when he said that America had reached the limits of possible energy conservation.

Sure enough, investments in plant, equipment, and appliance over the years have changed the underlying structural relationship between energy use and GDP in the US and other countries, and they have done so while preserving and even enhancing the efficiency and comfort of American life.

But reminders persist. The certificate above is today posted in a building at MIT, no longer relevant or in force, but a shadow of a failed policy direction.

There is still tremendous potential for energy efficiency in America and the world, but only if we approach the problem in a way quite different from that adopted in 1979.


Anonymous said...

The lack of common sense on this conservation issue in the U.S. is utterly mystifying. When we were in Switzerland years ago using a friend's "chalet" (duplex) in Klosters, the authorities simply turned off the electricity to the basement washer and dryer during peak hours each day.(Don't ask me how; I don't know.) This was accepted practice by all. Can you imagine what would happen here if a town tried that??!!!! But guess what - you adapt.


Erik Engbrecht said...

Actually practices such as that have existed in the US for a long time. Many utilities will offer discounts if you hook up your central air conditioner or electric water heater to a switch that enables them to turn it off and thus reduce peak demand. Watch your electric bill. You're provider probably offers such things to you on a regular basis and you just don't notice.

Nobody notices because the price of residential electricity is highly regulated and kept artificially low. It's also kept artificially constant. Real costs would dictate that different hours of the day and different times of year have different prices, but people instead pay a flat rate. If you paid 10x your current rate for electricity during peak hours, you probably would take steps to consume less during peak hours. But allowing markets to work would upset too many voters, so that will probably never happen.

Anonymous said...

I don't think the people in Klosters were given a choice, but I could be wrong. And yes, my husband takes advantage of every single opportunity for both electric and water usage savings. Unfortunately, we live in Md. where an experiment by the legislature in "deregulation" of electricity led to 75+% increases in electric bills....


Doug Short said...

Ten years from now, when we have LED lights, fuel cells and storage batteries in homes that no longer have electricity delivered by wire, we will be using less electricity and there will not be significant hourly price differences for the homeowner. The only question will be how much we have invested in a smart grid.