Efficiency, the Risk-Free Energy Source
IMAGINE the ideal energy source: It can be found almost everywhere, exploited without damaging the environment, and leaves no harmful wastes. This is not some newly discovered miracle fuel, but rather a proven and time-honored practice - conservation. By using our existing energy sources more efficiently, we can reduce pollution, improve our balance of trade, and strengthen national security.
Efficiency has been the forgotten stepchild of United States energy policy. For eight years, the Reagan administration focused exclusively on the supply of energy while ignoring demand. Let us hope the Bush administration does not employ the same misguided mathematics. Yet efficiency has enormous potential: Each year, as much energy leaks through American windows as flows through the Alaska pipeline.
The US is barely treading water on energy efficiency. A key barometer of energy consumption in 1988 remained stuck at the same level as the previous two years - 20,000 British thermal units (Btu) of energy per dollar of gross national product. In one crucial energy area, the nation actually lost ground last year. Petroleum and natural gas consumption per dollar of GNP, which was 13,100 Btu in 1987, rose to 13,200.
The administration may conclude that because the overall efficiency figure has been unchanged for three years, the policy is working. That would be a mistake. Keeping even isn't good enough. These figures mean that US demand for energy is rising just as fast as the gross national product. From that perspective, we're actually falling behind.
Let's say, for example, that the economy grows at a rate of 2 percent a year - a modest assumption. If economic output were matched by parallel growth in energy consumption, the result would be a 27 percent growth in energy demand by the year 2000. Neither the economy nor the environment could afford to keep pace with that demand.
The US imported nearly 40 percent of its petroleum supply last year. If current trends continue, that figure will surpass 50 percent in the 1990s, which will fatten the trade deficit. Increasing domestic supply is not the solution, either, because it does not attack increasing demand for energy. Consumption of fossil fuels - from whatever source - contributes to emissions of carbon dioxide (CO2)and other greenhouse gases. Each gallon of gasoline we burn produces about 20 pounds of CO2, one of the principal gases causing global warming.
Meanwhile, US conservation efforts, which thrived after the oil embargo in the early 1970s, are running out of steam. Between 1973 and 1986, the US boosted economic output 36 percent with virtually no gain in energy consumption. But in 1986, the efficiency curve leveled off and has been flat since.
Opportunities abound to improve energy efficiency in the transportation, building, and industrial sectors of the economy. We need to squeeze more out of every gallon of gasoline, every chunk of coal, every cubic foot of natural gas.
Consider the potential payoff from automobiles with better gas mileage. As a nation, we have doubled the average miles per gallon of US-made cars in a little more than 10 years. Why not repeat that success?
Yet at a time when we want to reduce dependency on foreign oil, the fuel economy of US-made cars is worsening. According to the Department of Transportation, the overall fleet average for new passenger cars and light trucks slipped by two-tenths of a mile per gallon in 1987, and by three-tenths m.p.g. in '88.
I propose a four-step strategy to make the US transportation sector, which accounts for 65 percent of the petroleum used in this country, more thrifty:
Toughen corporate average fuel economy (CAFE) standards. As a goal, I suggest we seek to increase the average of new car fleets to 45 miles a gallon by the year 2000.
Develop incentives to stimulate demand for fuel-efficient cars. For example, we could raise the so-called ``gas guzzler'' tax to finance rebates for buyers of the most fuel-efficient cars.
Encourage federal and state governments to take the lead by improving the efficiency of their own automobile fleets.
Urge public and private sectors to work together to impress upon all Americans the importance of energy efficiency.
Here is an illustration of the benefits of efficiency. The difference between our stalled fuel-economy average and a gradual rise to 34 miles a gallon by the year 2000 is about 400,000 barrels of oil a day at the turn of the century. How much oil is that? About twice as much crude oil as spilled out of the hull of the Exxon Valdez into Alaska's Prince William Sound last month.
These, then, are our choices: to continue our wasteful energy consumption habit, with its attendant environmental and economic costs, or to put American technology to work to produce the savings that will reduce the risks of future Valdez-scale disasters.