SEVENTH ANNUAL ENERGY EFFICIENCY FORUM
A conference report by Hal Fox.
Over three hundred invited attendees enjoyed the one-day Seventh Annual Energy Efficiency Forum at the National Press Club in Washington, D.C. Wednesday, June 19, 1996. The attendees were variously from the Department of Energy, energy-interested corporations, major power utilities, and the media. Johnson Controls, Inc. was the co- sponsor of this forum along with the United States Energy Association, which is the U.S. Committee Member of the World Energy Council (WEC).
After a welcome by Barry Worthington, Executive Director, U.S. Energy Association, the first forum was presented: "What Policies Should the Federal Government Pursue in Changing Energy Markets?" The moderator was Douglas A. Decker, Government affairs, Johnson Controls, Inc. The presenters were J.D. Hayworth, U.S. House of Representatives, Arizona; Scott Klug, U.S. House of Representatives, Wisconsin; Christine Ervin, Asst. Sect., Energy Efficiency and Renewable Energy, USDOE; and Mary Nichols, Asst. Adiminstrator, Air & Radiation, USEPA.
A summary of comments including the following: Pollution by power plants is deemed to damage the health of 54,000 persons each year. Acid Rain and particulates also cause some premature deaths. A sixteen member advisory committee is studying the transition to new pollution control standards including the abatement of mercury pollution in 44 states. Global warming due to carbon-dioxide emissions is a long-range fossil fuel problem. There is a Presidential Committee on Environmental Quality and a 37-state group which will meet next year. The goal is to cut emission by an additional 20 percent by the year 2005.
Based on the successes of the privatization of some government functions, privatization of other government- managed functions is pending. For example, the DOE manages 132 hydroelectric dams that furnish about 30% of the electric power consumed in the U.S. The TVA has managed to accumulate $28.5 billion debt. The Northwest has access to much lower government subsidized hydroelectric power. The DOE energy labs have grown far beyond their original mission and now consume 40% of the DOE budget. In one comparison, a privately run energy installation used 12 employees to produce the same power produced by 95 government employees. However, some types of R&D that will probably not be funded by private industry should be supported by an increase in the government support of R&D. [This reporter would caution against another institution of self-serving one-project advisory committees that have been responsible for advising funds for hot fusion (over $20 billion spent) and denying funds to new renewable energy projects.) Representative Klug properly advised that the government does not have the capability to commercialize new technology. Private industry does a far better job. The air traffic control system was used as an example.
In a plea for more funding for renewable energy, Christine Ervin stated that the budget request was for only $4 per capita and that any attack on clean energy was an attack on the environment. The free market is distorted and does not best handle long-term results, and therefore, is not a substitute for leadership. What was lacking in Ervin's presentation was any knowledge of the latest new energy technologies. Renewable energy is currently limited to wind, geothermal, hydroelectric, biomass, and photovoltaics. No knowledge of, nor funding for, cold fusion, solid-state devices, or super motors was mentioned by any members of this forum. Of course, the main topic of this conference was on energy efficiency and energy conservation.
The next forum topic was, "Global Energy Efficiency, Who will Pay for it?" This session was moderated by James B. Sullivan, President, World Energy Efficiency Association. The presenters were Mason Willrich, Chairman, EnergyWorks; Jefferson Seabright, Director of Energy, Environment & Technology, US Agency for International Development; Joseph Gilling, Industry and Energy Department, World Bank; Paulo C. Tavares, Director, Electrobras, PROCEL, Brazil.
The question was posed as to how we can accelerate the rate of change in new energy technologies. In the U.S., energy production is characterized by slow growth, aging plants, low-cost natural gas, the world's best energy infrastructure, and high-efficiency new technologies (such as natural-gas-burning turbine generators). Change is stifled by the need to recover old plant costs. One approach is legislation that permits faster cost recovery for capital investment. With existing technology there is a market for small, distributed power generation. In the future such installations as natural-gas-fired turbine generators will account for one third of new electrical power production. New power may well be driven by customers influenced by green power advocates. In less-developed countries power is often susidized, involving poor infrastructure, and as a result these state enterprises are bankrupt. The answer is in privatization coupled with regulations favorable to business. The World Bank can help by encouraging better privatization climates in countries being funded.
The U.S. Agency for International Development's budget is under assault. The U.S. is now the fourth largest contributor to international development on a per capita basis. However, international market barriers are coming down; energy markets are poised for growth; private funds will be used to catalyze new developments where business regulation is favorable. There are excellent opportunities developing. Experts from U.S. utilities are serving as international advisors.
The role of the World Bank in energy efficiency involves poverty relief, human resource development, and the building of an energy infrastructure. A rapid growth rate in energy-use of 6 to 8 percent annually by 2010 is forecast. The increasing use of energy will be coupled with increasing pollution as the large populations of China and India increase their energy useage. The big problems are the lack of information, the lack of informed financial support, and the lack of funds for infrastructure development. The World Bank has had a policy failure and is now establishing new policies, which are expected to result in reform by borrowers and a shift to privatization. The World Bank is supporting 137 projects with $53 billion in capital since 1986.
An excellent summary presentation was made by Paulo Tavares of PROCEL in Brazil. With the growth of energy use in Brazil, $50 billion will be spent in the next 20 years with $35 billion in investments that must be raised from the international private sector. Plants are being designed with user-group input and with the help of international partners. A big investment must be made in education where five million students must be trained in the use and conservation of energy.
Here again, in this session, none of the presenters appeared to be aware of the impending huge changes that will be made by the new-energy technologies now being commercialized in various parts of the world. There is apparently a huge information vacuum about new sources of energy.
Casper Weinberger was the luncheon speaker. Weinberger is currently the Chairman of Forbes, was formerly Secretary of HEW, and also served as Secretary of DOD. Here is a synopsis of some of Weinberger's observations:
We must reduce our reliance on oil imports in an unstable world, but not by selling off our emergency oil reserves. The trade deficit is expected to double to $100 billion per year. Political considerations will probably prevent any hikes in energy costs. The forecast 8 billion world population by the year 2,000 will place additional demands on energy. The use of energy in the Pacific Rim countries is expected to exceed the use of energy in the U.S. Disruption of oil imports could bring the U.S. economy to a standstill in 90 days. The U.S. cannot afford the large dollar transfers to other nations to support oil imports.
The basis of the national energy policy should include offshore oil development, new methods of oil recovery, and new energy sources. We must continue to support energy efficiency. We cannot reduce the quality of life in the U.S. We have the best life style in the world's history. Our energy policy should encourage incentives, not just in dollars but also in education. Other nations look to the U.S. for leadership and they need our help in building clean, efficient, energy sources. We must draw a line in the sand and say 50% of our oil and no more will be imported. Encourage other means of energy production. Continue with this type of forums.
In a short private visit with Casper Weinberger this reporter had the following conversation: HF: "With three new energy technologies being developed by private companies, what U.S. department do you suggest be informed about these technologies?" CW: "Well, the Department of Energy would be an obvious choice." HF: "But they are the ones who have turned thumbs down on funding these new energy developments." CW: "Perhaps they are concerned about too rapid growth in energy technologies. However, the Department of Defense should be interested." HF: "Thank you sir. It has been a pleasure to meet you."
The third forum, "Impacts of Deregulation on Efficeincy in a Changing Electric Industry," was moderated by Ronald E. Russell, Senior Advisor, Hagler-Bailey Consulting. The presenters were Frederick W. Buckman, Pres. & CEO, Pacificorp; Girard F. Anderson, Pres. & CEO, TECO Energy, Inc.; William J. Lhota, Exec V.P., American Electric Power; and Robert N. Culshaw, Minister-Counsellor: Trade & Transporft, Embassy of Great Britain. Here are some of their comments:
With the changes in energy regulation the American customer now has choices. The wholesale production and marketing of energy is highly competitive and the result has been a reduction in energy costs. Air and water quality have been improved. There will be more ingenuity in energy production and more efficiency in energy transport and distribution. British Colombia can now sell energy to Arizona and the transfer is made by shutting down production in the northwest and increasing production in the southwest thereby cutting down on-line losses -- the energy is not wheeled. Regulators have traditionally regulated the entire energy system and that will end as regulatory authority is diminshed and transferred to the free market forces.
The consumers know little about the production and distribution of energy. The customers want reliable, efficient, and economical service. The U.S. has the most reliable and and lowest cost energy-delivery system in the world. For example, energy costs in the U.K. are about 1.5, Germany two times, and Japan 3 times the U.S. energy costs. Little further reduction in energy costs is expected. The natural gas and some other fuel supply infrastructures are approaching maximal use. With the new Energy Policy Act there will be some cost adjustments (particularly to protect those who wheel the energy to be able to charge suitable costs for such services.) There will continue to be an emphasis on better management of energy use and consumption. The integration of energy and communications is underway (it is assumed that the power companies are making use of their rights-of-way to emplace fiber optic cables).
Power companies will be faced with new regulations for wheeling the energy from other power companies. The customers will be sold services from more than one source but the same infrastructure will provide the distribution of services. The customer will expect competition, fair and efficient service, and near parity of costs among suppliers. Subsidies will be eliminated (especially the subsidizing of hydroelectric power), the price will be determined by free market forces of supply and demand and there will probably be a merging of operating companies into total energy delivery companies. There will be functional realignment of Generation - Transmission - and Delivery of energy.
In this forum there was some mention of unspecified new energy developments that would tend to keep energy costs low. However, there was no recognition of the enormous potential for change of the way in which we will soon produce and distribute energy. Except for the concept of natural-gas-burning turbine generators, the concept of a pending distributed energy system was entirely ignored. It is interesting how well protected this group has been from information about pending new-energy technologies. However, it was also interesting that, with only one exception (Casper Weinberger), none of the speakers were mentioning hot-fusion energy development as having any commercial potential.
The final session of the conference was a report by Mark Ginsberg, Director, Federal Energy Management Program, USDOE. Ginsberg's talk was available in printed form and details the great dollar savings that have resulted from energy efficiency and energy conservation used throughout the DOE. It would be interesting to determine how much of the identified energy conservation was achieved by the down-sizing of some government projects.
REPORTER'S SUMMARY REMARKS: This reporter was pleased to have been invited to this important Energy Efficiency Forum. The most interesting part of the entire conference was not so much what was said but the obvious almost complete lack of information about the most dramatic energy changes in the history of the world. Not one of the presenters appears to be aware of any practical renewable energy systems except photovoltaics, wind, and geothermal. Except for special cases, none of these renewable energy sources are cost- effective when compared with the latest efficient use of natural gas in turbine generators. None of the presenters made any reference to cold fusion, solid-state energy devices, nor super motors. We will try to change this lack of information. We have a list of conference attendees, with their companies and cities. We will try to get mailing addresses and send them a copy of the July 1996 issue of New Energy News so they will know there is a source of information available to them on new-energy devices.
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