Energy Efficiency Then and Now
As a result of the 1973 oil embargo, during which Arab oil producing nations (cooperating under the banner of OPEC, or the Organization of the Petroleum Exporting Countries) raised the price of oil by 70 percent, to $5.11 per barrel, American heating oil prices climbed from $0.20 per gallon to a catastrophic new high of $1.73 a gallon.
The oil embargo lasted from October 1973 to March 1974, very nearly paralyzing American industry and throwing such a monkey wrench into international relations that former president Richard M. Nixon’s administration almost lost sight of the goal (which was, then as now, energy independence).
The embargo was a method relied on by OPEC to deter the United States’ decision to supply the Israeli Army during the October 1973 Arab-Israeli War. The embargo was also extended to other nations which supported Israel, and as a result European nations and Japan sought to disassociate themselves from America’s Middle East policy.
At that time, energy efficiency was an entirely new concept, and one largely unfamiliar to a nation which had won WWII and never envisioned a day when its enormous financial and industrial base couldn’t support a need for twice as much oil as the nation had used in pre-war years.
In a remarkable display of energy efficiency underlining that goal of energy independence, it’s nice to know that America’s energy efficiency has almost doubled since 1973.
For example, in 1973 the nation needed 14,790 Btus (British Thermal Units) for every dollar of GDP (gross domestic product – a prime indicator of the nation’s economic health). Today, we need as little as 7,320 Btus (in 2011 figures) to achieve the same level of production, and that figure was two percent less in 2010, showing a permanent decline not only over almost two full decades but year-over-year post-recession.
This production-based energy efficiency is the primary reason Americans enjoy one of the highest standards of living on the globe. In fact, the U.S. is fourth on the list of nations having very high human development indices, according to the United Nations Development Programme's Human Development Index Report (UN, HDI). Numbers 1 through 3 are Norway, Australia and the Netherlands, by a 0.002 percent margin.
With gross domestic product more than tripling since 1973 (from $4.5 trillion to $14.5 trillion), a failure to improve energy efficiency would have meant that we either had to find three times as much oil or other fuel, or abandon GDP in favor of balancing the budget.
Surprisingly, energy efficiency measures do not reliably reduce energy use. In fact, finding ways to save energy usually results in more energy being used. It’s kind of like being on a diet, when a lunch of salad suggests that dinner can include a baked potato with “the works”.
This perception, called Jevon’s paradox (arrived at by polymath Stanley Jevons in his study of historical coal consumption in Great Britain), clearly indicates that when energy efficiency improves, people demand more energy.
It is only thanks to energy efficiency improvements in steam engines (thanks to James Watt) and similar equipment that paved the transition from the Victorian Era to the Industrial Revolution. As one energy expert notes, those who draft energy policy on the notion that energy efficiency improvements will result in a decrease in energy consumption are doomed to disappointment. This only happens during recessionary periods, as the recent 2007 to 2010 GDP slump proves.
A look at the U.S. energy timeline from 1879 to the present shows that:
- In 1879, the first commercial light bulb was put to use
- In 1914, the U.S. Bureau of Mines (Department of the Interior) predicted that oil reserves would run out by 1924
- In 1939, the Department of the Interior said oil reserves would last through 1952
- In 1950, oil surpassed coal as a source of heat
- In 1951, the Interior Department changed its mind and said the world had 13 years of proven reserves
- In 1977, former President Jimmy Carter declared that proven oil reserves would run out by 1990 (all info thanks to InspectAPedia)
Today, thanks to energy conservation measures, we still have oil reserves we haven’t even touched. Meanwhile, energy conservation innovations like a DEVAP air conditioner (an adaptation of the vapor condensing air conditioner first proposed by Willis H. Carrier in 1909) are being pursued by NREL (The National Renewable Energy Laboratory, one of 12 energy efficiency and renewable energy labs operated by the U.S. Department of Energy, or DOE).
Meanwhile, a $279 billion investment in building energy efficiency retrofits could save the U.S. more than $1 trillion over the next decade, as well as cutting domestic energy consumption by 30 percent, reducing greenhouse gas emissions by 10 percent, and creating 3.3 million jobs.
Energy efficiency; it’s a bargain at any price.