The Ghost of High Energy Prices Past

By Elisa Wood

Oct. 9, 2008

Halloween is still a few weeks away, but a ghost is already making an appearance, this one floating over the presidential campaigns. His name is Conservation.

I first heard the specter of sacrifice evoked by Sen. Barack Obama in the Oct. 7 debate. The next day Gov. Sarah Palin repeated the term several times in a television interview. Conservation, she said, is part of Senator John McCain’s “all-of-the-above” energy policy.

Wait a minute. Isn’t this the Jimmy Carter approach – the turn-down-the thermostat and put on the sweater – that proved fruitless?

I’m not saying conservation is a bad idea; I am saying it is ineffective over the long term. Americans will conserve only as long as money is tight. Once energy prices drop or personal income rises, the house heats up again.

For that reason, today’s energy efficiency movement has distanced itself from the idea of self sacrifice. Instead, advocates define energy efficiency as doing more with less, not doing less. While conservation is a 1970s notion, efficiency is a child of the Internet age, a series of advanced technologies that allow our factories, data centers, homes and appliances to function better while using less energy (with some good old-fashioned insulation thrown in.)

I can only guess that the candidates are using the term “conservation” freely again because polls indicate the American consumer is ready for a period of self-sacrifice – not surprising given all of the bad economic news that seems to stem from a certain amount of financial hubris. But what the polls giveth the polls taketh away. Energy policy based on conservation offers us a fleeting green alternative.

Better that we stay with the efficiency theme.

To that end, it was encouraging this week to see the American Council for an Energy-Efficient Economy announced state progress in pursuing efficiency policies. (See ACEEE’s “2008 State Energy Efficiency Scorecard” http://aceee.org/pubs/e086.pdf?CFID=17536&CFTOKEN=51038700.) State policy is important because states invest two to three times more money than the federal government in efficiency.

Moreover, efficiency frees up money for investment in other clean energy projects. As ACEEE points out, “Energy efficiency is the only resource that can help states actually reduce energy consumption to combat rising energy demand and create a hedge against skyrocketing energy prices – making efficiency the ‘first fuel’ states can use to balance their energy portfolios.”

Thus, states, utilities and businesses can use money saved through efficiency to build renewable generation and a smart grid. These are solid things that keep saving energy even after the ghosts of Halloween (and election seasons) vanish.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.