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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you: carol@geraniumfarm.org

Monday, June 28, 2010

The Gulf Oil Spill: A Red Flag for Energy Conservation

The Gulf of Mexico oil spill is a major disaster. It evokes numerous topics for discussion and elaboration. In response to our query, "what about this would you like us to explore?" friends have asked about the ecology and economy of the Gulf region – which has output valued at $234 billion annually according to a 2009 study by the Harte Research Institute of Texas A&M University[1]. Other friends want to know about clean-up methods – the standard ones include everything you've been hearing about: chemical dispersants, sand berms, relief wells and others, according to an aptly named article "How Do You Clean Up an Oil Spill?" on Howstuffworks.com [2]. In addition, the Presiding Bishop of the Episcopal Church, in a recent Sunday bulletin insert essay, calls our attention to oil usage and our dependence on oil companies.[3] It is this aspect we will focus on here.

We are in fact making progress reducing our consumption of oil. In 2005, the United States went through an average of 20.8 million barrels of oil every day. In 2009, this had dropped to 18.7 million barrels per day (b/d). Some of this 10% reduction is due to the recession and is being partially reversed now as the economy works toward recovery. Even so, projections made in early June by the U.S. Department of Energy point toward oil use in 2011 of 19.1 million b/d, which would still be lower than any other year since 1998.[4]

We're anxious to have you know this, since it seems to be in contradiction with a statement by the Presiding Bishop that "…we continue to extract and use [oil] at increasing rates and with apparently decreasing care." Surely she is right – as she goes on in her discussion emphasizing the interconnectedness of people, plants and animals with each other and the oil – to bemoan the fact that the spilling oil is creating a huge mess and harming innumerable innocent victims. But we would assert that there is much more to this situation that's constructive, which we and church leaders might consider and lift up in response.

First, let's take some credit for our reduced use of oil. This is no small accomplishment. And it's even more impressive when measured against the size of the economy. Converted to the heat-equivalent BTUs [you know that BTU measure from your air-conditioner], oil and natural gas consumed per dollar of GDP has gone from 11.66 in 1973 to 4.51 in 2009. This measure has decreased consistently throughout these years; it went up only in 1987 and 1988, and then by very marginal amounts.[5]

Several actions contribute to this result. Our personal vehicles are increasingly more economical. In 2008, cars averaged 22.6 miles per gallon, up from 20.2 in 1990. Vans, pickups and SUVs achieved 18.1 mpg in 2008, up from 16.1 in 1990. We're also averaging fewer miles of driving for both types of vehicles. Also, despite the growth in population and the number of homes, the so-called primary use of energy in residences has held to a flat trend over the past 20 years. The use of electricity in households has expanded somewhat, but the use of natural gas and petroleum has not. Similar patterns prevail for businesses, offices and industry.[6]

Second, continuing progress along these lines can feel "good". With enhanced knowledge and technology, we don't have to feel deprived as we continue to restrain energy consumption. Do you know anyone who feels deprived driving a Toyota Prius? Or a hybrid Ford Escape? They'll usually tell you they enjoy driving by gas stations instead of stopping at them. And the Prius is a very good-looking car with a nice ride.

In another vein, a year ago on Earth Day, we discussed the Empire State Building's "green" renovation. That work is still going on, but the building is already showing progress. It received an Energy Star rating of 90 from the EPA in late May, putting it above 90% of buildings nationally, regardless of age. A press release from the building tells that some full-floor tenants are managing on 2.5 watts of energy per square foot, including air-conditioning, compared with an industry standard of more than 6 watts per square foot.[7] It was formerly thought that the best way to retrofit a building for energy efficiency was to tear it down and start completely over. The Empire State Building shows that substantial reforms are plausible and profitable in an existing structure, even if it is 79 years old.

Even apparent "failures" can have their own contributions to make. We were surprised to read good things about the Boeing 787 Dreamliner plane, despite the repeated disappointments over malfunctions during the testing of its operating systems. But Amory Lovins, chairman and chief scientist of the Rocky Mountain Institute, informs that the plane's body is constructed of a 50-percent carbon-composite material which saves substantial weight, and the innovations in its engines, aerodynamics and other parts will save one-fifth of its fuel at no extra cost. Boeing is using some of the components on all the rest of the planes it makes. Lovins also reports that Wal-Mart, everyone's favorite firm to beat up on, is innovating in its freight-delivery system, and has cut its truck fleet's diesel use per ton mile by 38% between 2004 and 2008. If every trucker made the same changes that one factor by itself would cut U.S. oil use by 6%.[8]

So indeed we agree with the Presiding Bishop that the Gulf oil spill throws up a huge red flag about our oil consumption and the absolute necessity for curtailing it. Her presentation stops short, though, in simply reciting a litany of the near-term damage the spill is likely to cause. The ugly conditions she describes are indisputable, but they are hardly the end of this story. They're in fact barely the beginning of how we can handle the future of oil use. Many of the remedies are already in place if we just look for them and expand their application. It's probably one of the more worthy and rewarding challenges of our day.

1. David W. Yoskowitz. "The Productive Value of the Gulf of Mexico", Chapter 2 of James C. Cato, Editor, Gulf of Mexico Origins, Waters, and Biota, Volume 2, Ocean and Coastal Economy. College Station, TX: Texas A& M University Press. 2009. Page 25.

2. Josh Clark. "How do you clean up an oil spill?" http://www.Howstuffworks.com. September 2008 (approx.). Accessed June 15, 2010.

3. The Most Rev. Katharine Jefferts Schori, "A Lesson from the Gulf Oil Spill: We Are All Connected", Episcopal Life weekly bulletin insert, June 20, 2010,
http://www.episcopalchurch.org/documents/ENSW_insert_062010_eng_color_lettersize.pdf. Accessed June 28, 2010.

4. U.S. Energy Information Administration. Short-Term Energy Outlook, "Table 3d. World Liquid Fuels Consumption". June 8, 2010.
http://www.eia.doe.gov/emeu/steo/pub/jun10.pdf . Accessed June 20, 2010.

5. U.S. Energy Information Administration. Monthly Energy Review, Table 1.7 "Primary Energy Consumption per Real Dollar of Gross Domestic Product. May 2010. Page 16.
http://www.eia.doe.gov/emeu/mer/contents.html. Accessed June 20, 2010. An update is due June 30.

6. U.S. Energy Information Administration. Op.cit. Table 1.8 "Motor Vehicle Mileage, Fuel Consumption and Fuel Rates", Page 17, and Table 2.1 "Energy Consumption by Sector", Pages 23ff.

7. Empire State Building Company L.L.C., "Empire State Building Receives Energy Star Rating of 90 from EPA". May 27, 2010.
http://www.esbnycleasing.com/release.phtml?id=287. Accessed June 28, 2010.

8. Amory Lovins. "Freeing America From Its Addiction to Oil", Snowmass, CO: Rocky Mountain Institute.
http://www.rmi.org/rmi/Library/2010-01_FreeingAmericaAddictionOil. Accessed June 19, 2010.

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