Is a sustainable energy future already emerging?

Future historians will debate the precise moment at which the age of giant coal and nuclear power plants passed unmourned into memory, even as global oil consumption began a sustained decline.   But it is closer than you think.

It will happen because better options already are displacing these increasingly quaint relics of the previous century.   Leading the list is our fastest, cheapest and cleanest source of new energy supply:  energy efficiency, a term encompassing all the ways we’ve found to get more work out of less energy. 

Since 1973 (the year of the first huge global oil supply disruption), our economy has tripled in size while our energy use has increased by only a third.  This required efficiency improvements in everything from refrigerators to automobiles, even as we cut by more than half the amount of energy required to produce a dollar’s worth of economic output.  

If you think of energy efficiency improvements as the equivalent of avoided power plants and oil fields, and compare all the saved energy since 1973 to that extracted from fuels, the energy resource represented by our efficiency gains would dwarf the combined contribution of all the conventional energy resources that we brought online, nationwide, over the past three and a half decades.  That’s right:  since 1973, we got more than double the energy equivalent of all our new power plants, gas wells and oil fields just by making the energy we used work smarter.

And we did it by saving energy at a small fraction of the cost of those conventional supplies, while sustaining efficiency momentum even when the price of energy declined.  Progress would have been much less if we had relied solely on energy prices to drive cost-effective energy efficiency; instead, in addition to those prices, we used combinations of incentives (delivered through tax codes and utility company payments to customers) and steadily upgraded efficiency standards at both state and federal levels. 

Coordinated standards and incentives are the reason why today’s sleek multi-function refrigerator needs less than a third of the electricity of the avocado1970s clunker to cool food and beer, and why next year’s TV will be at least 50 percent more efficient per square inch of flat screen than its four-year-old equivalent.  Next year’s light bulbs will beat the century-old Edison equivalent by at least 25% in illumination delivered per kilowatt-hour, and for plenty of those new bulbs the improvement will be more like 75%.  After doubling their average fuel economy between 1975 and 1985, miles-per-gallon averages for new cars stagnated for a while, but then leapt forward when Congress and the President broke through a longstanding logjam on fuel economy standards in 2007; by 2016 the typical new car will get 36 miles per gallon, compared to less than 14 in 1975.

These achievements hardly press the limits of inexpensive energy efficiency improvements; indeed, it’s fair to say that we haven’t yet broken a sweat.  In a comprehensive assessment of cost-effective domestic energy efficiency opportunities, McKinsey & Company identified potential ten-year savings of $1.2 trillion in U.S. utility bills alone.  MacArthur laureate David Goldstein believes that aggressive efficiency improvements can drive domestic energy consumption down by more than 80 percent within four decades, and that $10 trillion in associated savings is likely a gross underestimate.  These projections are buttressed by recent remarkable findings from the field:

  • From 1980-2008, the four-state region spanning Washington, Oregon, Idaho and Montana achieved electricity savings equivalent to 10 giant coal-fired power plants at an average cost of two cents per kWh, resulting in a cumulative net annual reduction in electricity bills of $2.3 billion;
    • Acting under authority established in bipartisan 2007 legislation, the Obama Administration has already adopted fuel economy standards that will save about 1.6 million barrels of oil per day by 2030, and we could add another 2.8 million barrels per day if the standards ratchet up to 60 miles per gallon by 2025 (current daily consumption is about 19 million barrels).  Conversely, drilling for oil off the coasts of the lower 48 states and opening the Arctic National Wildlife Refuge would likely produce no more than 1 million barrels per day in 2030. Moreover, even if we open up more areas tomorrow to drilling, it would be another 7 to 10 years before any oil flows from these new wells. In contrast, efficiency and other oil savings measures can start producing savings immediately.

There is much more good energy news that has nothing to do with coal, nuclear or oil-based energy.  The fastest growing U.S. electricity sources over the past five years are wind and solar power; by early 2011, installed U.S. wind generation capacity had reached 40% of the nation’s entire nuclear fleet, and global installations of photovoltaic power are now outstripping nuclear generation in capacity added annually. 

In addition, U.S. domestic supply estimates for natural gas, the cleanest burning fossil fuel, are surging; credible estimates of accessible reserves now exceed 70 years of consumption at current rates.  Such estimates depend vitally on both efficient use and continuously improved environmental performance by the extraction and distribution industries, of course.  But greater availability of affordable natural gas would also be good news for renewable energy, because it would lower the cost of pairing variable-output wind and solar with flexible gas-powered generation to replace obsolete coal and nuclear plants. 

We long ago parted company as a nation with the myth that economic growth requires equivalent increases in energy consumption.  U.S. oil consumption and greenhouse gas emissions are unlikely ever again to reach the peaks of 2005; by 2009 both were down by about 10 percent, in part reflecting market-driven reductions in coal-fired power generation equivalent to a tenth of the entire giant US fleet.  A new era in energy use and production is upon us, and from both economic and environmental perspectives there is ample cause for rejoicing.

About the Authors

Ralph Cavanagh

Codirector, Energy program

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