Green Jacket, Cigar, Gold Rings, and Disneyland

18 01 2011

I attended the Midwest Energy Efficiency Alliance last week and it was an interesting environment, to say the least.  This was the 4th or 5th MEEA conference I have attended. 

Behavioral stuff is an up and coming topic/issue in the EE industry.  I am planning to do a rant that to save energy, people have to give a crap.  I just need something to push me over the edge.  After all, just about all lasting energy efficiency requires behavioral changes.  Only inanimate, stationary, non-energy consuming stuff, e.g., insulation, doesn’t require behavior change.  Everything else has a behavioral component for maintenance, avoiding rebound and things like that.

What was probably most interesting to me was the political environment addressed by speakers at the conference.  For whatever reason, MEEA likes to attract people from Washington DC to discuss current events.  Essentially, people from the Department of Energy, Alliance to Save Energy, and Center for American Progress, to name a few, are on the defensive with the congressional wipeout last fall.  The theme I absorbed was one of playing defense and riding out this storm.  The mood for some was as though their dog had just left them and passed on to k9 heaven. 

One speaker was afraid of the jobs that were going to be lost but also threw wild numbers around – like the energy efficiency portion of the stimulus produced $50 billion in economic activity and that the regulation put in place and on auto pilot will produce billions of baskets of bread from the heavens in the next couple years. 

Energy efficiency is not like giving a child an immunization.  I’m a member of Rotary International and one of Rotary’s missions is to end polio worldwide.  We were down to just a few very poor and politically repressed countries like Afghanistan and Sudan, but like anything, completely eliminating something is very difficult.  Anyway, I’ve seen many photos of children bawling their eyes out as volunteers dripped immunization in their mouth.  This may seem unpleasant to the tikes but it is obviously in their favor and has a practically infinite benefit/cost ratio. 

Conversely, we can’t ram energy efficiency down peoples’ throats.  How many times do I have to say it?  The price of ramming things down American’s throats: 63 house seats, 6 senate seats, 5 net governorships with a near sweep in the Midwest, and a tidal wave of state house flips.  Here’s how regulations work: increase the cost of doing business and businesses move out of the state or overseas and then they get blasted for being Benedict Arnolds by the very folks who impose the regulations. 

Like light bulbs I discussed last week, energy efficiency is gathering really positive momentum, not because of top down regulation, but because it’s good for business.  See Save Energy – Get Out of Jail where Wal-Mart used “green” to get thousands of critics off its back.  They in turn are requiring energy efficiency standards for their suppliers.  I just red about Holcim cement getting ENERGY STAR® ratings on five of their plants.  I can’t speak with certainty but I don’t think they are taking the time and expense to get ENERGY STAR to pump up their four-wheel-driven employees.  They are obviously doing it for marketing.

And the DOE person was concerned about the jobs that will be lost once the stimulus is gone.  What jobs?  I’ve never lived through such a bizarre two years in my life and I’ve been in business for 20 years – eewe, old codger, I am.  It’s been crazy.  Talk about modifying behavior.  Millions of people purchasing vehicles a few months before they otherwise would, leaving in its wake a predictable buying vacuum – how many jobs did that create?  I don’t know, but I just read that Ford is planning to bring on 7,000 workers about 17 months after the cash for clunkers fiasco.  The $8,000 first-time home buyer credit – same thing.  The housing market is still searching for a bottom.  Just let it bomb and let’s get on with the recovery.  With regard to EE, probably hundreds of millions of dollars have been spent pursuing federal grants.  Enormous efforts have been expended trying to get free money.  This, my friends, is not stimulative.  It’s fighting over other people’s money to be repaid sometime in the future by said people.  This too as with my rant last week was a bipartisan bad idea started by Bush. 

Meanwhile, our industry is booming but the DOE speaker doesn’t know this because she lives in the beltway bubble.  The downturn only hit our new construction and LEED services.  Our other EE services have more than made up for it and we have four engineering spots to fill but we can’t find qualified people.  How bizarre is this?!  I think I mentioned we had an outstanding candidate we spent no time giving an offer to but she already had two other offers and took one closer to the spouse’s job.  Our usual evaluation teams have had to sit out requests for proposals because some couldn’t handle the work they already had in the tank.  We’re passing on RFPs as well.  So jeezo woman, when the stimulus goes away we’ll still be working hard to find people – as will be many others in this industry.

Back to the MEEA conference:  After a series of “Oh woe is me” talks, one guy in the crowd walked up to the mic to make a suggestion.  Rather than duking it out over regulation and climate change policy, why don’t we focus on the irrefutable common benefits that everyone can buy into – that EE is cost effective and is good for business.  Give that man a standing O, a green jacket, cigar, bottle of milk, gold rings, a trophy and a trip to Disneyland.  THIS is what we ought to be doing, not battling it out over something people rank 19th out of the most critical issues of the day and something half the population opposes. 

Tidbits

Speaking of jobs… Note to wonks trying to “create” or “focus on” jobs:  People invest and are in business to make money; period.  They are not in business to hire people.  People are hired as necessary to make more money.  Think about that.  If the bureaucrats want more jobs, let people and companies make more money. 

And speaking of sole purpose of business is making money…  In New Years Collage I chronicled a three way fight The Wall Street Journal, several utility CEOs and the EPA were having.  Among the CEOs cheering the EPA’s increase in emissions regulation was Exelon Corporation’s John Rowe.  I was eating lunch at MEEA next to a long-time Chicagoan familiar with Mr. Rowe’s strategy for Exelon (parent of ComEd, which serves Chicago).  The gentleman said Mr. Rowe sold off all of Exelon’s coal generation, leaving it with only nuclear plants.  He said the nuclear plants had among the highest operating costs in the country, which left Exelon with a high operating cost, which had to be made up by higher rates.  The gentleman explained how Mr. Rowe brought on a former Naval Nuclear engineer (Yeah!  Go Navy!) to improve the “efficiency” of the nuclear fleet.  And so he turned them around overnight.  As a result Exelon has virtually no coal generation, very efficient nuclear plants, and the highest return on capital of any utility in the business.  As I mentioned above and in several other rants, CEOs report to shareholders.  Shareholders rule.  Profit is king.  I have no problem with any of this except, I think lobbying for government to regulate a competitive advantage for yourself is not something I would do.  Preparing for and reacting to policy, good or bad policy, is fine, and indeed smart business to me.  Otherwise you might find yourself on a street corner with a tin cup. 

BTW, this was not a wild eyed ideologue I was enjoying lunch with, but I did check the facts and what he told me was pretty well right in line with an article by Forbes magazine

written by Jeffrey L. Ihnen, P.E., LEED AP





Get a Grip

10 08 2010

As you may have heard, this year China powered past (cheesy pun warning) the United States in total energy consumption.  Apparently, back in 2007, they surpassed the US in carbon emissions.  This makes sense as almost 70% of China’s electricity is derived from coal as compared to just under 50% in the United States.  In the U.S., nuclear and natural gas make up most of the other 50%, roughly split evenly with renewable energy rounding out the 100%.

In recent years, or especially since President Obama moved into the White House, there have been multiple verbose incomprehensible cap and trade policies drafted, but they are dead for now.  By the way, I maintain my position that substantial nationwide carbon limits are not going to happen in my lifetime.  If it didn’t happen since Obama took office with a filibuster-proof senate and a large majority in the house, it ain’t going to happen anytime soon.  Why?  Democrat senators from Midwestern states where coal is still king (not that this is a good thing) and coal producing states like West Virginia result in filibuster, if not an outright minority.  E.g., Jay Rockefeller will vote party line on everything but carbon caps.

There remains one possibility, however – that carbon caps may be legislated through the courts, which of course is not how things, especially major things like this, should become the law of the land.  In one example, the EPA in 2007 was handed the power to regulate carbon dioxide because it is a “pollutant” per the clean air act.  Again, this is like declaring water, another vital molecule that makes biological life possible, a pollutant because water kills.  Recall, I wrote on the blog a few weeks ago you can die by drinking too much water.  People drown, to the tune of 400,000 deaths worldwide each year[1].  Floods devastate communities – at least $3 trillion per year[2].  Water causes lightning, which kills about 24,000 per year[3].  And heat wave deaths – always have a large component of high humidity.  Aside from illegal activity (human smuggling), when was the last time you heard of heat related deaths in Arizona?  You don’t.  It’s Chicago, Memphis, New Orleans, Kansas City, Little Rock.  Water is dangerous.

You may be thinking, there’s nothing we can do about water.  Really?  How about banning swimming in rivers, lakes, and oceans and slapping $1,000 fines on people for not WEARING their floatation devices?  Move everything out of the 500 year floodplain.  Mandate air conditioners for every household and if you can’t afford one the federal government will provide one.  Sound familiar?  Thousands of lives would be saved per year.

The bottom line is, 98% of legislators are too cowardly to vote for the right thing, or wrong thing I guess, if it threatens their political career.

Sorry.  I got way off track.  I can’t help but railing against the preposterous.  Life has risk.  Is there anything, ANYTHING, worth doing if there is no risk?  There are costs and there are benefits.

Back to China.  China’s energy consumption has DOUBLED in the past 10 years while the United States’ energy consumption has decreased slightly.  For all intents and purposes, it’s been flat.

Here is something that will knock your socks off – since 1999, China has installed 416 gigawatts of coal-fired power plants.   “So what?”, you may be thinking.  A gigawatt is like a trillion dollars.  To give that perspective, a trillion dollars in $100 bills wouldn’t fit in a three car garage, tightly packed and stacked to the rafters Likewise 416 gigawatts can be generated by 832 large 500 megawatt power plants or 208,000 wind turbines by nameplate capacity.  This is eighty giant coal-fired power plants per year!!  And they have 330 more giant power plants on the drawing board.  Over the same period, the United States has built coal plants totaling 12 GW, or a measly 24 giant power plants.  China is averaging 80 per year, while the U.S. is averaging 2.4 per year.  GET A GRIP!

This is like giving Lance Armstrong a two day lead in the Indy 500 with his bicycle (he would be the US) but China has just taken the lead with the typical 225 mph Indy car.  It’s actually worse than that. It’s more like me running the Indy 500 versus the 225 mph Chinese Indy car passing me by.

In 2006, China generated as much electricity from coal as did the United States.  At the time they had 484 GW of operational coal plants.   Very roughly, they’re adding 10%, at least per year.  This blistering pace will fade with time, but it is fair to say they will have double the coal-fired electricity generation compared to the U.S. within 5 years.

Conclusion:  If we are truly concerned about carbon emissions and climate change, China has to do something.  The reality however is that whatever the U.S. can stomach will be of zero consequence considering the Chinese Indy car.  Unlike the floating continents of garbage that is choking the mighty three gorges dam and the 100 tons of benzene spilled in the Songhua River, carbon dioxide makes its way around the globe.  It doesn’t matter where it comes from.


[1] http://www.who.int/violence_injury_prevention/publications/other_injury/en/drowning_factsheet.pdf

[2]http://environment.nationalgeographic.com/environment/natural-disasters/floods-profile

[3] http://www.lightningsafety.com/nlsi_history/intl_safety_initiative.html

written by Jeffrey L. Ihnen, P.E., LEED AP





This is not Tee-ball

16 02 2010

Carbon taxes or cap and trade seem to have been a foregone conclusion in our industry of energy efficiency.  I’m not so sure.  I, like many other engineers in the energy efficiency business have always been cynical about global warming, which for some reason is now known as climate change.  I would argue that a relatively small portion of anti-carbon people are true believers, that carbon is having or will have a significant effect on the climate and I have no problem with that.  What I do have a problem with is the vast majority of people and organizations who portend to be doing the right thing and saving us all from ourselves when in actuality they are in it largely for the financial gain or political reasons.

The past year has seen one body blow after another to the climate change movement.  In November, we were served with Climategate out of the University of East Anglia, “the worst scientific scandal of our generation” per the London Telegraph.  Penn State’s leading climatologist Professor Michael Mann, Mr. Hockey Stick, is under investigation for falsification of data.  Nothing significant came out of Copenhagen, except let’s party again sometime.  The press had a field day reporting on the carbon spewed to put on that convention.  Phil Jones, head of the Climate Research Unit, dropped some bombs in an interview with the BBC.   Washington gets drubbed with a one-foot snowstorm it seems every week.  Actually, all 50 states have had snow on the ground and all 50 states most likely had snow on the ground at the same time – last Friday!  Wow!  Has that ever happened before?  And last but not least, this is subterranean on the average person’s list of concerns so who has the political will to push this?

Most people who want climate regulation do so as long as they can either make money on it or have somebody else pay.  Not even eco-friendly (supposedly) Boulder, in a league with Berkeley, Caracas, and Havana is willing to put money and action where their mouths are.  And this is a college town, so you know they are well cushioned from the lousy economy.  These people aren’t even willing to shell out what is the equivalent of one night out for dinner for an energy audit of their home – a heavily subsidized audit at that.  The art dealer drives a Prius and uses compact fluorescent bulbs but refuses to close his door during the heating and cooling seasons – “the most basic of conservation measures”.  I can see it now.  Auditor:  “Uh, close that door.”  There’s probably a picket line on the street right now.  One UC professor says Boulder deserves credit for trying.  No.  Credit for trying ends when seven-year-olds graduate from tee-ball.

Furthermore, last fall Boulder voted into the city council people who plan to moderate the environmental initiatives.  At the same time they voted down a simple public low-interest loan program for low-interest loans.  Now to meet their objectives, they plan a take a sharp marketing turn from environmental benefits to saving money.  Touché.

So let’s get honest.  Energy efficiency and being green is probably 80% financial benefit and 20% hobby for individuals, and for most businesses and institutions it is 99% financial benefit.  Wal-Mart isn’t reducing energy costs and holding its suppliers to green standards to save the world.  Certain utilities aren’t promoting cap and trade to save future generations from catastrophe.  People don’t pay for LEED® and put their plaque in the closet.  I would say that only a very small percentage of the public and a larger portion of our tiny energy efficiency industry are passionate about reducing waste, preserving natural resources, and minimizing environmental impacts – AND willing to live accordingly.  The rest is pure financial gain, but there’s nothing wrong with that, unless crises are manufactured and lying is involved.

written by Jeffrey L. Ihnen, P.E., LEED AP