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





The Nebulous Green Job

13 07 2010

“Green jobs” have been all the buzz for quite some time, probably before Barack Obama was elected president, but I don’t know for sure.  What the heck is a green job anyway?  Some real answers include those like we have at Michaels Engineering with 20+ engineers working full time on real energy-saving projects.  Another example is the guy who operates the humongous crane that helps erect humongous wind turbines.

But politicians and academic eggheads aren’t talking about jobs like we have at Michaels, although they probably do agree the crane driver has a green job, but it goes far beyond that to Alice’s wonderland.  Take this Mark Izeman guy’s interview.   I’ll paraphrase the questions and answers for brevity here.

Q:  What should graduates look for by way of green jobs?

A:  Look into areas of energy efficiency, renewable, cap and trade, and local food, which is a red hot issue.

These are shot gun recommendations for everyone leaving college with cap and gown stuffed in a suit case: physical education, political science, sociology, library science, foreign relations, mass communication majors included.  Quite frankly, I don’t know what people with these sorts of academic backgrounds are going to do unless they want to weld and assemble wind turbines and electric cars.  Otherwise, there are always more PR jobs like the guy being interviewed in the article, but what good does that do?  It’s like hiring cheerleaders to double as special teams experts in the NFL.  What we need is more players and fewer cheerleaders (strictly speaking about the “green jobs” industry and not the NFL).

And then he says buying local food.  What are you going to do with that?  Start your own vegetable farm?  I think there is a lot of cheap land available in Detroit for this.  There are more jobs available working for Dole, which grow strawberries in CA, bananas from Guatemala or Ecuador or someplace like that.  I’m sure there are a lot of management, marketing and sales jobs and stuff like that with these companies.  Oh, I forgot.  These aren’t “green jobs”.  Never mind.

RA (real answer):  Think before selecting a college major.  With an engineering degree you will have the flexibility to fill or create any number of green jobs.  Library science guy?  Not so much, for real anyway.

Q:  Has the stimulus created “green jobs”?

A:  Fifty thousand “green jobs” have been saved or created.

Can we count the 20 plus engineering jobs we “saved” in this total?  Why did “jobs created” morph into “jobs created or saved”?  Obviously, the latter can mean anything.  Since the 4 million jobs have disappeared while the unemployment rate has gone up (down most recently because the workforce is shrinking as people quit looking for work), it’s pretty hard to claim jobs have been created.

Fifty thousand is a pathetic number, even if it represented “created jobs” only.  Here’s a sneaky secret:  you know when you apply for a federal grant, which seems to be part of nearly everyone’s business model nowadays, one of the selection criteria is you guessed it, “jobs created or saved”.  Well my new LED street lighting job is going to create or save at least 200 jobs.  This probably gets as much scrutiny as an Energy Star dust mop.

RA:  Nobody has a clue, really.

Q:  How many “green manufacturing jobs” will replace lost manufacturing jobs?

A:  Lieberman/Kerry cap and trade will create 200,000 jobs per year over the next 10 years.

RA:  In China and India.

Q:  How do you define “green jobs” in the first place?

A:  He doesn’t know but the Bureau of Labor and Statistics is figuring it out.

Why?  A job is a job, so if my job is a green job, I guess that’s one less engineering services job.  It’s one or the other.

RA:  Whatever it takes to capture enough jobs for some political end.

Q:  What is the outlook for “green jobs” sector over the next 40 years?

A:  “Greening the economy and creating new jobs, which will become so plentiful and normal we won’t label them “green jobs”.

RA:  The outlook is good.  I don’t think this will be going away, but let’s dispose with the “green jobs” moniker, which is just political wrapping paper to pass massive spending bills.

Demand for green stuff is growing on its own.  Take LEED, which is run by a non-profit United States Green Building Council.  It has been wildly successful and as far as I know, it has taken very little if any money from federal, state, or local governments.  I don’t see a single government employee on the board of director committees.  Gee.  I wonder if there is a connection between wild success and lack of government bureaucrats??  You don’t suppose.

Wal-Mart has probably produced more “green jobs” per the definition provided in the article/interview noted above than the federal government could ever hope to accomplish.  People buy hybrid cars on their own volition.  Leading hybrid-producing car companies didn’t need any government largess to be successful in this market.  I do think they will need government handouts for development of electric vehicles which, I am guessing will go on the scrap heap of bad ideas, right on top of the fuel cell vehicles that we should have been driving by the thousands by now.  More on this later.

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





EE Lemmings

25 05 2010

Automobiles have really changed over the past 30 years, and in some ways for the worse.  Back in the 1970s before hardly anyone purchased imports, imports were small and domestic vehicles were hulking behemoths.  Then it was the second, or was it the third or fourth – doesn’t matter – energy crisis hit in the late 1970s and domestic cars shrunk in a big way.  The Ford Mustang went from a muscle car to feeble runt.  A 1982 Mustang was the first car I owned.  It was also by far the crappiest car I ever owned.

This was the first giant step for domestic auto makers toward import fuel efficiency and of course it was disastrous.  Millions of buyers experienced the same thing I did and did the same thing I did; started buying imports and never went back.

Getting on with the topic at hand – just look at how automakers of all stripes and origins have morphed into the same styles.  Let’s look at how the Ford Taurus (formerly the LTD), Honda Accord, Volvo, and BMW 535 have changed from 1978 through today.

1978

2010

Back in the day, you could look at a silhouette of a car – or better yet, I could draw it on paper and you could tell what brand it was, and I draw as well as I play violin (I don’t think I’ve ever had my hands on one).  In 2010, all you have to do is change the front grille and unless you study cars like an anal-retentive buyer with every issue of Consumer Reports and Buyers Guides for the past five years, you would never be able to tell what brand they are.  They only have a tiny vestige of auto heritage left in about one square foot of the front of the vehicle.

Here’s an entrepreneurial thought: the “import” makers should sell optional “domestic” front ends and leave their stores open around the clock.  This way the few remaining people who wouldn’t be caught dead in an import could sneak in the back door with a big hooded rapper sweatshirt on at 3:00 AM Monday morning and drive out with a car they really want and nobody would ever know it’s an import.  Their parents would let them in the house.

This paragraph is a bit of a guess because I’m not THAT old to know for sure.  Over the same period of 30 years, energy efficiency programs have “evolved”, more like devolved, in the same way.  Back then there were few efficient technologies (products) and energy efficiency required brain power.  A portfolio of programs probably got the most savings from custom measures like upgrading systems and controls, replacing controls, adding heat recovery, changing incandescent lighting to fluorescent and boring building envelope improvements.  Compact fluorescent and T8 lighting, if they existed back then, probably cost as much as the modern laptop   Check out that baby!

In 2010, program portfolios are like modern cars.  Just take the utility logo off one and slap on the next logo and voila, ready to launch.  They typically consist of prescriptive incentives for residential lighting, heating and cooling, appliances, appliance recycling, and maybe ENERGY STAR® new construction; and commercial and industrial prescriptive incentives for like categories plus maybe commercial new construction and retrocommissioning.  Prescriptive measures, those that receive incentive for achieving some equipment efficiency threshold, probably account for 80-90% of savings – more for newer programs, maybe less for mature programs.

Program implementation has become a marketing campaign for technologies; efficient versions of everything available in the marketplace.  There is nothing wrong with this, but codes and standards can drive these.  Take the home furnace.  Is there any need for an 80% efficient non-condensing furnace anymore?  Any contractors who install 80% efficient furnaces should be fined, speaking facetiously.  It’s just stupid.  Compact fluorescent lighting is pretty much in the same category.  This gravy train of easy savings is about to end as incandescent lighting is phased out.  Moreover, I would say the market has already transformed to CFLs and possibly not even for energy efficiency.  Many consumers choose them because they don’t burn out.  Less maintenance and pain in the kiester to keep up with failing light bulbs.  In commercial and agricultural facilities, these maintenance savings swamp energy savings.  People are expensive.  Good light bulbs are not.

Some states are sharply increasing goals and what are program administrators doing in response?  More of the same.  Some are just increasing incentives, even doubling them in some cases.  This is like trying to significantly cut federal spending and taking entitlements and defense off the table.  There isn’t much left to work with.  Cost premium of efficient stuff is only one barrier to energy efficiency.  At some point, you could literally give away efficient stuff and still not meet goals.

Program administrators and utilities need to put everything on the table and go back to the early days of custom efficiency, and comprehensive energy retrofit, retrocommissioning and demand response for commercial and industrial facilities.  Industrial programs are woeful all over the country, including in California.  Measures like “pump off controllers” for oil wells and numerous oil refining measures are complete free riders – measures that would happen regardless of any efficiency programs.

Administrators also need to think outside the box with “incentives” as well.  There are many ways to do this but I’ll have to save that for another day because I’m out of time.  But for now, let’s just say to take it to the next level, administrators are going to need custom measures, which requires engineering expertise.  It looks good for us!

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





Energy Star Black Eye

6 04 2010

For years, beginning in the 1990s through just a few years ago I considered ENERGY STAR® to be fluffy foo foo feel good goo – kind of like eating meringue smothered in corn syrup after chopping wood all day.

Then they introduced the ENERGY STAR rated homes and ENERGY STAR rated commercial buildings.  Both of these seem to be solid “programs”.  ENERGY STAR for commercial buildings is based on energy intensity, which is energy consumption per square foot, climate region, type of facility and a few other things.  To “earn the ENERGY STAR” commercial buildings must be in the 75th percentile of energy efficiency by energy intensity AND buildings must be inspected by a licensed professional engineer to ensure the occupants or owners aren’t cheating by starving the building of fresh air, sufficient lighting, or comfortable temperature and relative humidity conditions.  This is solid.

Then the ENERGY STAR label for appliances started to carry some weight with me, although I have an ENERGY STAR rated dehumidifier that won’t shut off automatically anymore and I otherwise have no idea what about it saves energy.

Unless you’ve been cryogenically frozen like Austin Powers for the past 30 years and were thawed out yesterday, you know the government has been throwing money at ENERGY STAR rated appliances as fast as the presses at the US mint can churn out $100 bills.

Recently some ENERGY STAR warts were exposed.  The famous electric space heater with feather duster and fly strips passed as an air purifier.  This is ironic because electric resistance is the most wasteful source of space heat and a feather duster kicks up dust, just sort of moves it around – not good at air purification.  The other infamous example that passed was the gasoline-powered alarm clock.

For an organization that has eight pages of how and how not to use their brand, including how to use ENERGY STAR properly in a statement, and how to use the logo, this is a major scandal.  The insouciant reaction to this fiasco is unfortunately not surprising to me, as this is the federal government we are talking about.  An ENERGY STAR spokeswoman states the approvals of these bogus products did not pose a problem for consumers because the products never existed. There was “no fraud”, and she said she doubted that many of the 40,000 genuine products with EnergyStar status had been mislabeled.

Come again?  These ridiculous examples get through the “screening” process, but don’t worry, the 44,000 products with the label are all ok.  I think this woman needs to take a statistics class or maybe some taekwondo six sigma courses.

This is another blithe example of no accountability at the federal government.  If something like this happened in the private sector some big heads would roll.

Snooty congress people haul all sorts of people they don’t like in front of them to call the kettle black.  Examples: Mark McGuire, Jose Canseco, Roger Clemens (why their “crime” rises to a federal level is beyond me), Bill Gates, Steve Ballmer and half of Microsoft, automotive executives, and most recently, evil corporations who are going public with the hit they will take to earnings due to the passage of the healthcare bill – reporting which ironically congress made them do in their kneejerk reaction to Enron with the passage of the millstone known as Sarbanes Oxley.

The problem is the government has a horrible record of policing itself.  I went into this in an earlier rant, or maybe it was while I was in a deep sleep one night; the purpose of government is to protect people from being ripped off.  When they start delivering products and services, in this case ratings, who’s going to oversee that?  Look at this ENERGY STAR scandal.  The government didn’t protect us from getting ripped off, but instead was complicit in it.  I don’t know of a single energy efficiency program in the US that is administered by a state agency – except for Wisconsin, which controlled the energy efficiency purse strings for a while and then, you guessed it, they stole the money to fill budget gaps they were too cowardly to fix the right way.  Programs are administered by utilities, consultants, and/or non-profits and overseen by state agencies.  Yes.  This is how things should work.

This guy says to scrap the ENERGY STAR immediately.  I don’t know if I would go that far.  As mentioned above, I think the intent is very positive for consumers.  Instead it should be privatized, turned over to a non-profit or consortium to manage and police.  This is how commercial equipment is rated.  Organizations include the Air-Conditioning, Heating and Refrigeration Institute, and the American Gas Association.

If the ENERGY STAR “program” were turned over to the private sector and a scandal of these proportions broke, you can bet the executives of the organization administering it would be singing to Henry Waxman right now.

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





Beer or Air

22 12 2009

Last week these columns featured Wal-Mart and its silencing of critics via green and sustainable business practices.  Are they really saving energy compared to their peers?  Skylights, dimming fluorescent lights, and LED refrigerated case lights triggered by occupancy sensors – but what’s the totality?

Lexus makes hybrid vehicles.  One is a $110,000 sedan with a 5 liter V8 with fighter-jet horsepower weighing in at 20 miles per gallon.  A Caterpillar earth mover may get that kind of highway mileage.  The point is, a facility / organization can be green in name only.  Note that in no way am I inferring Wal-Mart stores are Caterpillar earth movers.

I think to a large extent the sustainability of many facilities and organizations are like those presents under the tree in the food court at the mall that I used to go to in the 1980s.  It looks good, but you know there’s nothing in there.  Conversely, a wrapped present under our office tree that looks like a 12 pack of beer is a 12 pack of beer!  Believe me when I tell you that when a guy whose name is drawn has a choice between a concealed package that looks like beer and one that could contain clothing or worse, like some knickknack, the beer-looking one will be snapped up like my dogs on cheese.

This one always cracks me up: “We are going to follow the LEED® method, but we’re not going to pay for the certification”.  This is foolish.  If an organization is honestly going to follow LEED, the price of registration, documentation, and certification is minimal – like less than buying the custom mats for the new car.  The LEED wannabe process is toothless.  Anything that is worthwhile has a high risk of getting dropped: energy modeling, efficient design, and components that achieve efficiency, and commissioning.  Decent commissioning costs 75 cents per square foot depending on the type of facility.  You’re going to spend $75,000 on commissioning and jump through all kinds of other hoops but skip the few thousand dollars for certification?  This is like getting enough credits to graduate but skipping the degree.  Try explaining that one to the state examining board when you try to get your professional engineering license.

LEED isn’t flawless or bullet proof, but it does serve as a hammer to get people to move and it forces the owner and other stakeholders to make difficult decisions rather than just throwing things out if they are too expensive or difficult.

For energy efficiency, a good rating system similar to the EPA gas mileage ratings is the ENERGY STAR® Label for Commercial Buildings.  Why?  Because it is based on actual energy consumption comparing to peer facilities (on a square foot basis) in the same climate zone.  Earning the ENERGY STAR means the building uses less energy per square foot than 75% of peer buildings.  In addition, ENERGY STAR requires a building inspection by a licensed engineer to ensure the owner isn’t cheating by not providing sufficient ventilation or enough light for required tasks or by letting air conditions drift out of the comfort zone, which believe it or not is well defined.  Registration is free.  The only cost is for the engineering services.  If energy efficiency improvements are needed, there are extra costs for that of course, but there is a return on that investment.

Finally, we at Michaels have developed a custom energy efficiency program that uses actual savings demonstrated by energy bills before and after implementation.  Rather than just doing studies, assisting clients with implementation and moving on to the next project, we monitor savings once after a few months and again after a full year of post-implementation operation.  We don’t run away from results, sweep it under the rug (watch the hand), or just hope for the best.  We embrace real results because we want to know things are working right, and demonstrated success sells more success.  If I’m buying, I want facts and references, not a dog and pony show where promises are made with no follow through on comprehensive savings.

Salesman, get away from me, and no, I don’t want your dopey maintenance plan.

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