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America’s energy challenge
Friday, February 8, 2013
Here’s an unsettling fact: The U.S. economy wastes more energy than it uses. Each year, 57 percent of the energy flowing into our economy — from oil, coal, natural gas or renewables — is wasted as heat, noise and leaks. And this estimate is conservative: It doesn’t include lights that illuminate unoccupied rooms, or air conditioners left running in a vacant home or office.
When you pour a cup of coffee in the morning, you wouldn’t tolerate 57 percent of it dribbling out through a gaping hole in the side of the mug. So why do we allow this to happen to the energy that powers our economy? America’s energy waste doesn’t just put us at the bottom of international rankings (a 2012 study ranked the U.S. ninth out of 12 major economies, three places behind China); it’s also costing businesses and households $130 billion per year.
Experts estimate that policies to accelerate efficiency technologies could save Virginia $1.8 billion in electricity costs alone. It’s time to develop a national strategy to double our energy productivity by 2030. This will reduce our reliance on foreign countries for energy, save families money and reduce pollution.
Some important steps are already under way to improve the nation’s energy productivity. For example, thanks to new standards issued by the Obama administration, the U.S. auto fleet’s average fuel economy is set to increase to 54.5 miles per gallon by 2025. That’s an efficiency increase of more than 100 percent compared to today’s levels. This improvement, which is supported by industry and environmentalists alike, will save families money in gas costs and free up capital that can be spent elsewhere in the economy.
So, if we can drive twice as far for the same amount of gasoline, why can’t our whole economy go twice as far on the same amount of energy? A report released Thursday by the Commission on National Energy Efficiency Policy, a non-partisan group of business leaders, policymakers and utility executives, projects big benefits from a national commitment to energy productivity: $1,000 a year in net household savings, more than a million net added jobs and a reduction in carbon dioxide emissions (ase.org/resources/energy-2030-recommendations).
Fulfilling such a commitment won’t require taking big risks on expensive new technologies or imposing new taxes. Instead, we can simply begin replicating what’s already working in some parts of our country. Although since the time of Thomas Edison energy regulations have historically incentivized utilities to make money by selling more power, over the last two decades about 25 states have instituted reforms to help businesses and families use energy more productively. This is because regulators realized that reducing demand is cheaper than building new power plants.
Studies show these new policies work: Between 2002 and 2011, states without efficiency goals exhibited an average increase in per-capita electricity consumption of 9 percent. States with efficiency goals had an increase of just 5 percent.
Opower, one of Virginia’s fastest growing companies, worked with 83 utilities in 30 states and six countries to deliver $175 million in savings for customers last year, primarily in response to such policies. Opower harnesses comparative data to empower and challenge consumers so they will conserve energy.
So what can the federal government do to help the U.S. evolve from being an energy waster to a global leader in energy productivity? We propose a federal “Race to the Top” framework, modeled after the innovative education policy that has incentivized states to improve their school systems. A Race to the Top for energy productivity would empower the federal government to challenge states and local governments to cut energy waste.
We can do this. When faced with a challenge, Americans meet and exceed the mark. Washington has an opportunity to lead a bipartisan effort to double our energy productivity and put billions of dollars back into our economy. Who would be opposed to that? Let the race begin.
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