Sunday, March 26, 2006

Selling Energy Programs

I've been thinking for a while about what it would take to convince Americans of the need for a major effort on energy, aimed at slowing the growth of consumption, ramping up alternatives and getting our imports under control. Explaining the true scale of the challenge would risk having us give up before we start, while deliberately exaggerating the potential of new technology and minimizing the practical constraints on its deployment entails other dangers. Is there another, more effective path between these two?

As an example of how long it could take for major changes to take effect, consider the impact of automobile fleet replacement ratios. The US car fleet of 230 million vehicles turns over at about 7% per year, with less than half of those actually wrecked, crushed or exported. If every new car sold from 2006 on were a hybrid getting 50 mpg, the average fuel economy for the whole fleet could rise to about 39 mpg in 10 years, up from about 25 today. However, as impressively as hybrid sales have grown, they will still make up less than 5% of US car sales this year. If it took them 10 years to grow to 50% of the market--still a very aggressive assumption--then total fleet fuel economy in 2015 would be closer to 30 mpg. That's a significant improvement, but it translates it into a reduction in oil imports of about 2 million barrels per day (MBD). Measured against forecasted imports of 10.5 MBD, this falls far short of energy independence. Even turning all those hybrids into 100 mpg plug-ins would only close the gap by another 2 MBD.

So how does one reconcile figures like this with statements from groups such as the Geo-greens suggesting energy independence is achievable soon enough to have an effect on our geopolitical dealings? Now, the Geo-greens include some very savvy folks, who surely understand the dynamics described above, along with the other obstacles that would have to be overcome. Have they simply concluded that the public can't grasp anything more nuanced than energy independence?

There's an art to setting goals, and one of the first principles is making even stretch objectives achievable by some means short of a miracle. The downside of stretching unrealistically far is often disengagement and demoralization. Despite predictions of energy independence going back to the Ford and Carter administrations, we have experienced 20 consecutive years in which the percentage of our energy imports as a share of total energy consumption (in all forms) grew, rather than shrank. Although we made progress on this measure from 1975 to 1985 ,
we've given it all back, and then some. And while we have more viable alternatives than we did then, in the interim the relative size of the challenge has doubled, and its absolute magnitude has tripled.

A New York Times op-ed on the applicability of Abraham Lincoln's style to modern American electoral politics suggests an approach that seems equally applicable to energy. "Prudent idealism" could straddle the extremes of paralyzingly discouraging analysis and persuasion by blatant over-simplification. Instead of proclaiming that renewable energy and plug-in hybrids can somehow make the US independent of foreign energy suppliers within any reasonable timeframe, it ought to be possible to get the public excited about the potential for change, without raising expectations destined for disappointment.

So what can we say? First, I believe we are actually witnessing the early stages of a radical transformation in how we obtain and use energy, the largest such change in a century. Technologies like wind and solar power are starting to be deployed on a large enough scale to matter, and others just emerging from laboratories and from energy and biotech start-up companies have the potential to make us much less dependent on fossil fuels. As a byproduct, they will reduce our contribution to climate change by drastically cutting the greenhouse gas emissions associated with transportation and other economic activities.

But that's only half the story. It is equally true that it will take a generation for these changes to make a serious dent in the environmental and geopolitical problems we associate with fossil fuel use, and perhaps another generation for these technologies to grow to the scale of our present use of coal or natural gas, let alone oil. The inescapable corollary to this is that we will use more fossil fuels, not less, for the next couple of decades, even as this transition gathers steam. That means it's just as important to think about where we will find the oil and gas we will use in 2020, as to promote the massive expansion in renewable energy we will need, too.

And between those two poles of promise and practicality stretches a fertile expanse of business opportunities and useful tools for changing our relationship with the countries that supply us with conventional fuels. That seems nearly as exciting as energy independence, and it can be done in the real world. Now, that is hardly a simple platform, but it's not beyond our ability to explain, or the public's to grasp. And it doesn't resort to xenophobia or populism to make its case.

Please note: I'm currently traveling on business, so postings will be a bit erratic this week.

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