Talking Energy, Security, and the Environment
The theme of this year's forum was "Energy Efficiency: The Path Toward Independence," and special guest speaker Sen. Hillary Rodham Clinton (D-N.Y.) emphasized the need for energy security. "Energy is in the news right now." But the question is, she said, "Will we have the political will to make the decisions we know we must make for our energy future, our economic future, and our security future?"
Clinton stated, "I believe our present system of energy delivery and use is weakening our national security, hurting our pocketbooks, violating our common values, and threatening our children's future."
Now, "instead of national security dictating our energy policy, our failed energy policy dictates our national security," she said. We would never leave 10 percent of our military assets vulnerable to easy attack. But we're allowing that to happen with oil, Clinton proclaimed. Just one terminal in Saudi Arabia handles about one out of every 12 of the world's oil exports. So one successful terrorist attack on Saudi Arabia's oil would be enough to trigger a crisis beyond the scale of the 1970s.
There is very credible evidence that we have reached an oil production peak, said Clinton. But demand for oil is expected to rise 30 percent by 2025.
Other countries are making significant changes, she said. Denmark gets 20 percent of its power from wind. Brazil makes enough ethanol to power 40 percent of its cars.
Taking steps to reduce our oil dependence would help our economy, she stated. "The fastest way to reduce our dependence on oil and natural gas is to use them more efficiently."
Steps we can take, she said, include: converting from oil to a bio-fuels mix; putting more focus on renewable energy, and emphasizing efficiency in our vehicles and buildings.
We must make our appliances more energy efficient, Clinton said. The Department of Energy is behind in updating the standards for 22 major appliances. "We must set an aggressive schedule for updating the standards now," she stated.
We've been hearing a lot of talk about energy by the Bush administration, she said, but there has been a net decrease in federal support for energy efficiency. We can see the positive results from implementing energy efficiency, said Clinton. The evidence is there. However, "There's been an effort the last five years to turn Washington into an evidence-free zone."
We should be investing more in the weatherization program that provides immediate benefit to low-income families, she said. Also, "the federal government needs to extend the tax credits for commercial and residential energy efficiency that were included in the energy bill."
Clinton noted that the commercial credit is for buildings in place by the end of next year. But the IRS just issued guidance on this program, and since it takes years to plan and build a large commercial building, "we need to extend this important incentive for it to have any effect whatsoever."
Goals we should be pursuing, she said, include: producing 20 percent of our electricity from renewable sources by 2020; extending the production tax credits for generating electricity from wind and other renewables; doubling the tax break for hybrid vehicles; increasing the availability of E85 (ethanol blend gasoline) to 50 percent of gas stations by 2015 by providing gas station owners with a 50 percent tax credit; and accelerating energy research.
We can't wait for a terrorist attack to hit a pipeline or terminal before we act, Clinton said. "We have to make a choice. And that choice is based on facts and evidence."
She concluded, "We can do this. Many of you are proving that it can be done." As Winston Churchill said, "You can always count on the American people. They will end up doing the right thing after trying nearly everything else."
BUSINESS AND ENVIRONMENT DO MIXThomas C. Leppert, chairman of the board and CEO of The Turner Corp., a major construction company, said, "The stereotype is that business and the environment don't mix." However, "I believe my company needs to take a leadership position on the environment."
It doesn't take long to see that there is credible evidence that global warming is real, Leppert said. "Some may say you don't buy it. Even the chance that this is a real issue should motivate everyone to action."
But going green is not just an environmental issue, it's also a pragmatic business issue, he said. "Green is big business news."
Wal-Mart is building experimental green stores. GE is heavily invested in green products. Ford is using Kermit the Frog to promote green cars. Green is making money, Leppert said.
His company is now focusing on green buildings. "Green buildings serve the environment and they serve the bottom line." These buildings create "healthier, more productive workspaces."
While we're preaching green to our customers, we're also implementing green ourselves, he said. His company is recycling waste building materials and building green field offices.
Addressing the cost question, Leppert said that, on average, "green buildings have only a 2 percent premium." If the design team considers green from the beginning, they can hold down costs.
Some examples of successful green projects, he noted, include the PNC Bank Center in Pittsburgh, where operating costs are 20 percent less per square foot than similar buildings in this market. The Genzyme building uses 42 percent less energy and 34 percent less water than comparable buildings. And the Toyota complex in California is saving 60 percent in water usage by recycling water for landscaping and cooling, and is also 31 percent more energy efficient due to its solar panels, gas-powered chillers, and lighting.
Leppert exclaimed, "When making business decisions, you need to consider green."
THE NEED TO CUT EMISSIONSSen. Dianne Feinstein (D-Calif.) said that this country must do more in the areas in energy efficiency and conservation. "The United States is faced with a very stark choice: Do we continue in our profligate use of energy or do we choose in a meaningful way to be more energy efficient?"
The United States makes up 4 percent of the world's population, she said, but we consume 25 percent of the world's energy. "This is a choice between business as usual or the adoption of major change."
Efficiency and conservation must be at the helm of our energy policy, Feinstein said, because we are faced with an unparalleled environmental challenge - global warming. She stated, "Global warming is the No. 1 challenge facing the planet."
The buildup of carbon dioxide in the atmosphere is a very serious problem, said Feinstein. It is estimated that a 70 percent reduction of carbon dioxide from 1990 levels is required to stabilize the environment, she remarked.
In order to accomplish this, she said, we need to: increase the mileage requirements for vehicles; use more E85 in vehicles; create a national framework for businesses to reduce greenhouse gases by developing a cap and trade system for emissions; and promote increased energy efficiency.
Some doubt whether we can reduce emissions, Feinstein said. "But I say we can." The United Kingdom has already brought its emissions to 14 percent below 1990 levels. "Why can't we do the same?"
Tim Wirth, a former U.S. senator, now president of the United Nations Foundation and Better World Fund, agreed with Sen. Feinstein that the issue of climate change "is the greatest challenge we face in the world."
He said, "We put carbon into the atmosphere and it stays there for 150 years." He then asked, "How much garbage can we put up there?"
Carbon pollution has increased by one-third in the last 150 years, Wirth said. If we reach double the pollution level, he stated, we're really endangering the planet.
To avoid reaching a doubling, Wirth, like Feinstein, said that we must reduce our carbon pollution level by 70 percent. That 70 percent reduction number, he stressed, "should be front and center for utilities, for building operations, for everything we do."
STRIVING FOR INDEPENDENCEPennsylvania Gov. Ed Rendell noted that in 1972 Brazil imported 85 percent of its energy needs. Brazil today imports zero percent. To achieve this, the country uses sugar cane ethanol to run its factories and vehicles.
In November 2004, Rendell said that Pennsylvania passed advanced energy portfolio standards. One of the measures was to bring in a major manufacturer to build windmill blades for wind turbines. This added 1,000 jobs for the state. Rendell said that Pennsylvania has the potential with wind power to provide energy for up to 40 percent of its homes. He recommended that the federal government appoint an energy czar to promote wind power in other states.
Pennsylvania is also incentivizing and looking to start up four or five ethanol plants.
If you know that Brazil achieved energy independence, said Rendell, "Don't you think that we can?" This should become a major federal priority, he stated. "This is a battle for American independence."
ENERGY SUPPLY AND DEMANDThis year's forum also included a panel discussion on "Balancing Energy Supply and Demand." Moderated by Branko Terzic, global regulatory policy leader, Energy Resources Group, Deloitte & Touche, the panel consisted of Red Cavaney, president and CEO of the American Petroleum Institute, Thomas R. Kuhn, president of the Edison Electric Institute, and Roger Cooper, executive vice president of the American Gas Association.
Terzic first asked, "What have your industries done to become more efficient, and what have your customers done?"
Cavaney responded, "Without, question, we have become more efficient." If you look at utilities, "75 percent of them now use cogeneration," he said. That is a significant migration from 30 years ago.
Some customers have done very well, others not so well, he stated. "Clearly, efficiency is moving ahead."
Cooper said, "The average natural gas customer uses 1 percent less every year." Over the last 25 years, there has been a 25 percent reduction in use by residential customers. This is due to more efficient furnaces.
Kuhn said, "Every sane energy policy starts with energy efficiency." What you want are higher building efficiency standards and higher appliance efficiency standards.
On the production side, electric plants are much more efficient, he noted.
Terzic then asked, "What actions would you propose to the federal government to make efficiency easier for you and your customers?"
Kuhn answered that the Energy Policy Act's education component is only $90 million, "but it can go a long way to promoting energy efficiency."
The government should consider advanced depreciation schedules for smart meters, he said. It needs to get serious on the transportation side as well, looking at plug-in hybrids in addition to ethanol.
Cavaney said that we need more education on efficiency for consumers, to "help people help themselves." Business gets the idea of energy efficiency, he said, because energy savings is money that drops right to the bottom line.
Cooper commented that we have an incredibly tight demand-supply situation for natural gas right now. The big growth in natural gas has been for electric generation, which is good for the environment. "But we just can't keep that up."
Finally, Terzic asked, "What are we looking at in new technologies?"
Kuhn said advanced metering software allows customers to make their own decisions on efficiency.
Cavaney said that U.S. companies have some of the most efficient technology for drilling. People want to have efficiency and less emissions, he stated, and his industry has done that.
Cooper related that natural gas is not a high-tech industry. But working with the Environmental Protection Agency, it has reduced gas leaks and saved about $1 billion in lost gas.
NO SILVER BULLETU.S. Secretary of Energy Samuel Bodman noted that energy efficiency "is now squarely on center stage." The subject of energy affects us all. Bodman said that he is regularly asked, "What are you doing to lower gas prices?" But there is no silver bullet, he stated. "This problem has been developing for a long time."
Developing renewable energy and fuel cells is part of the answer, said Bodman. "These emerging technologies offer promising alternatives." But it's going to take time to fully implement these technologies.
In the last month, Bodman said, we saw the introduction of a new water heater from A.O. Smith, which the Department of Energy helped fund, featuring 90 percent efficiency, a 12.5 percent gain in thermal efficiency over other models.
DOE is also supporting new lighting technology, producing lighting that lasts longer while using less energy.
The DOE's Energy Savings Assessments program, he said, is working with 200 major industrial companies to reduce energy use. The agency expects to achieve savings of $500 million before this program is over.
In the wake of Hurricane Katrina, DOE went to federal sites and identified energy-saving measures. This will save taxpayers $10 million in annual costs, said Bodman.
Also, energy savings performance contracts have been renewed by the Energy Policy Act, and we have seen 13 new projects by the federal government since then.
Bodman declared, "Working together, we will be able to find the answers we need."
Sidebar: 400 Years of Warming UpWASHINGTON - After several speakers asserted at the 17th annual Energy Efficiency Forum that global warming is real and a serious problem, a new report from the National Research Council appears to back their concerns. The report states that there is sufficient evidence from tree rings, boreholes, retreating glaciers, and other "proxies" of past surface temperatures to say with a high level of confidence that the last few decades of the 20th century were warmer than any comparable period in the last 400 years.
Less confidence can be placed in proxy-based reconstructions of surface temperatures for A.D. 900 to 1600, said the committee that wrote the report, although the available proxy evidence does indicate that many locations were warmer during the past 25 years than during any other 25-year period since 900. Very little confidence can be placed in statements about average global surface temperatures prior to A.D. 900 because the proxy data for that time frame are sparse, the committee added.
Scientists rely on proxies to reconstruct climatic surface temperatures because geographically widespread records of temperatures measured with instruments date back only about 150 years. Other proxies include corals, ocean and lake sediments, ice cores, cave deposits, and documentary sources, such as historic drawings of glaciers. The globally averaged warming of about 1°F that instruments have recorded during the last century is also reflected in proxy data for that time period, the committee noted.
The National Research Council is the principal operating arm of the National Academy of Sciences and the National Academy of Engineering. It is a private, nonprofit institution that provides science and technology advice under a congressional charter.
Publication date: 07/10/2006