Great Energy News: What’s America’s Most Productive, Cost-Effective Resource?

Ralph Cavanagh, NRDC

As we near the 40th anniversary of the first OPEC oil embargo, which plunged the United States into a historic energy crisis, NRDC is issuing its first annual energy and environment report. It shows that our overall energy status has never been stronger in terms of both reliability and national security.

Despite America’s (Amazingly) Good Energy News, there are those who are still calling for more oil and gas drilling, or more nuclear plants, or building the giant Keystone XL pipeline to transport gas from Canada, or an “all of the above” energy policy. This makes no sense, as I recently noted in a New York Times op ed.

In fact, as NRDC’s exhaustive analysis shows, America’s most productive and lowest-cost energy resource isn’t even on that list.

Find the Answer

But clues to its identity can be found in the massive volume of data that NRDC reviewed from the government’s energy statistics agency, the U.S. Energy Information Administration, including:

• Total U.S. energy use is trending down and has dropped 6 percent from its 2007 peak – and the total last year was lower than for 1999 (although the economy grew by 25 percent from 1999-2012, adjusted for inflation). This means our factories and businesses are producing substantially more products and value with less energy.
• Electricity sales have declined in four of the past five years, including last year, which is a stunning shift for an industry that saw retail sales double between 1973 and 2000 (three times the rate of population growth). Much of the recent decline results from utility investment in energy efficiency programs – like helping customers upgrade their lighting and weatherization – between 2007 and 2012.
• America’s oil use continued its unexpected decline in 2012, down 14 percent from the 2005 peak. In fact, oil use last year was lower than in 1973 (when the nation’s economy was only about a third of its current size). According to the U.S. Environmental Protection Agency (EPA), new fuel economy and clean car standards will cut oil consumption in 2025 by 2.1 million barrels per day, which is more than we buy now from any OPEC country.
• U.S. coal use in 2012 was lower than in 1990 and down more than 20 percent from the peak year of 2007. This mostly reflects a shift away from increasingly uneconomic coal-burning power plants, whose air pollution produces more premature deaths than any other form of U.S. or global energy use.

And America’s most productive energy resource is?

As these trends suggest, energy efficiency – ways of doing more with the same amount of energy – is our most productive resource. And it’s our cleanest and cheapest one, too.

Thanks to all the ways we’ve been stretching our energy dollars over the past four decades we’ve more than doubled the economic productivity of our barrels of oil, kilowatt-hours of electricity, and natural gas therms without even trying very hard. (To see an infographic showing the report’s highlights, click here.)

According to the Bipartisan Policy Center, energy efficiency’s contribution to meeting growth in our energy needs over that period exceeds that of all other energy resources COMBINED. As a result:

• Total energy per dollar of goods produced is down;
• Gasoline per mile driven, down;
• Cost of energy services (from lighting to refrigeration), down;
• National carbon footprint, down.

As you can see from the chart above, we’ve come a long way from the gas station waiting lines of the 1970s. Energy efficiency is saving consumers money, helping American workers and companies compete worldwide, and it’s making our country more secure.

One person who’s not surprised at how much energy efficiency can do is President Obama, who’s made it a priority in his climate action plan. By finding new ways to do the same amount of work – or more – with less energy, we reduce our need for dirty power generation polluting our air and warming our climate.

As the president knows, here’s what we need to do next: double down on our proven winners. Keep tightening efficiency standards for buildings, appliances and other equipment, and our vehicles. We also need to reward our utilities for their energy efficiency achievements and stop the unintended but widespread practice of penalizing them automatically when energy sales level off because their customers are saving energy. And we should focus our constrained personal and government energy budgets on promoting energy savings that cost less than the electricity, natural gas and oil they displace.

Although energy efficiency has been our most productive energy resource for the past 40 years, there are myriad opportunities for more energy savings. An “all of the above” energy policy that includes our most expensive and environmentally risky resources is a guarantee of costly disappointment.

We need to do better to keep the good energy news coming – and we can.

Ralph Cavanagh is a senior attorney and co-director of NRDC’s energy program. This piece was originally published at NRDC’s Switchboard blog and was reprinted with permission.