Five Percent: Conserve Energy

Climate Change Is Important: Energy Conservation is the First Step


September 8, 2007

Do Dollars Equal Energy?

Category: Big Things,Economics,Editorial,Observations,Policy,Sustainability – Tom Harrison – 1:53 am

When I started writing this blog, I began to think that it is important to find a simple way to quantify the impact of changes I made (and you make) as a way to help simplify the problem of how to conserve energy. As I began to understand the problem, I realized that energy was at the heart of many of our most serious issues today: global warming, organic food, locally grown food, climate, terrorism, energy independence, geo-politics, and resource depletion. I still believe this is true.

I promoted the idea that one could measure energy most simply through your overall consumption, hence, dollars spent. I think this works at some level on a micro-economic level (your annual household budget, for example). But I have recently come to see that there’s a huge and important flaw in the general way of thinking that lead me to that simplification.

In short, my assumption is that “things” are as they are; our basic assumptions, our ways of thinking, our actions are essentially immutable. What we can do, I posited, is inherently incremental … yet even this apparently incremental change is important. I also still believe that we often miss the simple opportunities to make small reductions (you know, 5%) in consumption, and these can make a big difference.

But lately I am beginning to see that there is no equation as simple as “dollars spent = energy used”. It’s a convenient way to think of things, but I am not sure it is particularly helpful — it is overly broad, yet too narrow at the same time. But the simple equation of $ = energy doesn’t work.

Soft Energy Paths

This summer, my brother-in-law, Terry Jacobs, gave me a book to read, called Soft Energy Paths, by Amory B. Lovins. Terry and his partner own Jacobs /Wyper Architects, and have focused on sustainable and energy efficient building practices long before they became fashionable.

“Soft Energy Paths” changed my view of things a little, and a lot. The author writes about why we should abandon the “hard” paths of oil, coal, nuclear and the centralized power and electric grid models, and instead why it makes sense to follow the softer paths of solar, wind, geothermal, bio-fuels, and many other energy technologies. But his argument is almost purely a macroeconomic one: if we take the hard paths, it will cost a lot more. The kinds of changes he talks of are fundamental national policies (not just changing a light bulb).

An Energy Solution from the 1970s

But what is especially mind-blowing about this book is that it was written in 1977, several years after our first energy crisis. Lovins predicts many of the problems that are today becoming evident, mostly in terms of social and economic costs. For example, he identifies centralized power, fuel, and nuclear storage and distribution systems as targets for terrorists. His focus is on overall cost, however, and he also shows how such systems fail to produce the economies of scale that are a justification for almost all of the economic aggregation we have seen in the last 30 to 50 years.

Economies of Scale don’t Work for Energy

An electric plant, as it turns out becomes more expensive once it gets even modestly big. This is because the cost to run wires to houses and businesses from a long distance gets much bigger as the distance increases. And the energy loss in transmission gets much bigger as the distance increases. And the need for a single, central, critical resource to produce all of our needs, both during peak and off-peak usages, creates an excessively “heavy” resource for typical demand, like having a large truck to pick up a gallon of milk at the store. Whether the system is nuclear, gas, coal, oil or even wind, the author shows there are dis-economies of scale in large scale energy acquisition, production, transportation, and delivery. Not to mention the costs necessary to mitigate risks of failure … such as terrorism, weather, and so on.

Now, 30 years after this book was written, we have lived through several of these crises, and it’s pretty easy to see that he was right about the problems with the course we have taken, the so-called “hard energy path”. Not only are we running out of energy, we’re doing it in the most destructive and costly possible ways.

Oops.

The Alternative to Hard Paths

His alternative is many soft paths. He’s not saying that we should put all our energy into one idea, like solar, or bio-fuels, or wind, or geo-thermal, or conservation. He’s saying, in 1977 that we need to commit to all of them. Conservation helps, but so does a solar panel, a well-insulated house, a larger number of small energy facilities that are closer to their users, and so on. If we do (or did) these things we would by now be well along a path that would lead us towards a much more decentralized, less dependent, more economically fruitful, and wildly more efficient way of getting the energy we need to live our modern lives.

What I came to understand, in reading this book, is that to accomplish this goal, we would need to have made a really radical shift in our policies, and further, that this was an either-or choice; taking one path excludes the possibility of taking the other. And 30 years into the hard path, so far, he seems pretty much right on target.

Oops.

Of course we still have not made the right choice (quite the contrary, in fact). Yet the change is a lot more painful to make now than it would have been in 1977, and thus even harder to contemplate. But then again, failure to make what is now an even more radical change is, as they say in the movies “not an option”.

Dollars Don’t Accurately Measure the Cost of Failures to Change

So back to my point: if we use dollars to measure the cost of our energy consumption, we are continuing to embrace the much large infrastructure, habits, “needs” and social phenomena that these last 30 years of denial (at the very least) have created. We have to undo urban sprawl, huge houses, huge cars, massive amounts of false (unsustainable) wealth, and figure out what the value of the real dollar is. It’s an increasingly hard, yet increasingly urgent change we need to make.

The economists say the value of our dollar is worth more every year — that’s growth and is measured as a modest rate of inflation.

But the truth is, we have not been accounting for many things over these years. And, just like the words from that famous Fram Oil Filter ad that came out about the same time as Soft Energy Paths, “You can pay me now, or pay me later”. Later has become now.

1 Comment

  1. I am doing an analysis of a steel mid rise building system and comparing it to wood and concrete construction. I know this steel building is less expensive then the concrete and more then the wood. I think that from an energy standpoint the cost differential should equal the energy differential of the competing systems if they are produced out of comodities and are part of a very large unfettered industry. Do dollars saved equal energy saved hence giving a profile of which is greener?

    I like your site a good deal.

    Comment by Jamis MacNiven — December 13, 2007 @ 12:26 am

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