(These comments were submitted by Sherri Goodman, Senior Vice President at CNA and member of the Alliance Commission on National Energy Efficiency Policy.)

I am honored to be a member of the Alliance Commission on National Energy Efficiency Policy (ACNEEP), co-chaired by Senator Mark Warner (D-VA) and Tom King of National Grid, which is launching a plan this week to double our nation’s energy productivity by 2030. Increasing our nation’s energy productivity means producing an equivalent or greater output from a given or smaller use of energy; in other words, getting more “bang for the buck” from a given amount of energy used per unit of GDP. The Commission has focused on technological, investment, and other energy efficiency-related policy options that would help the United States achieve this goal.

As Executive Director of CNA’s Military Advisory Board (MAB), I have had the privilege of working with some of our nation’s most distinguished retired 3- and 4-star admirals and generals for the past several years on the national security implications of our continued dependence on oil and of related choices we have made to power our economy. We recognize that energy efficiency is the cheapest, easiest, and smartest way to extend our energy supplies, maintain mission effectiveness, and reduce threats to troops as well as to our homeland from nations that do not have America’s best interests in mind.

That is, energy efficiency and energy productivity can act as a “force multiplier” for enhancing our national security. The Department of Defense recognizes that enhancing energy productivity will help facilitate continued operational readiness and mission effectiveness. Energy efficiency can facilitate efforts to enhance resilience, as well, particularly as we experience more extreme weather events. Thus, the Department already is leading the way by incorporating more energy efficient vehicles and planes into its fleets and more innovative, efficient technologies in its field operations and at many of its installations. These efforts should serve as examples for ways in which the rest of society can enhance its energy productivity, while helping the economy as well as national security.

It is time to use this “force multiplier” of energy efficiency as a national “Call to Action”– and to do so sooner rather than later. Energy efficiency has long been bi-partisan. Efficiency efforts have saved this country significant sums and energy over the past few decades, and can save billions of dollars more in the coming ones. We need to use this ACNEEP goal of doubling energy productivity by 2030 to mobilize all aspects of our society – public and private – to maintain our global competitiveness, as well as to increase the stewardship and sustainability of our nation’s energy resources and improve our national security. Our nation is known for creating opportunities out of challenges and, at a time of continued fiscal and security challenges, efficiency provides us with just such an opportunity. This type of bold efficiency goal should serve as the first prong of an “all of the above” energy strategy this country and our leaders boldly embrace.

(These comments were submitted by Rodney Sobin, Senior Policy Manager at the Alliance to Save Energy.)

Energy productivity, like productivity of capital, labor and material inputs is integral to economic competitiveness. Companies that make the most efficient and effective use of their inputs (more bang for the buck and, for energy, more bang for the Btu) will tend to be more profitable and competitive than less efficient competitors. While economists may argue whether firms or nations are the units that economically compete, certainly a nation and its people are better served when its businesses, buildings, equipment, infrastructure, and public services are more productive and efficient, including energy efficient. In the meanwhile, various European and Asian industrial countries exceed U.S. levels of energy productivity (GDP per unit of energy consumed) while some emerging economies gain ground on us.

As Sen. Warner notes in the preface to this blog, doubling U.S. energy productivity is projected to yield significant economic benefits that translate to greater GDP growth, business and household savings, and higher employment. Further, it will encourage technological innovation, enhance energy security and reliability while reducing our vulnerabilities to energy supply shocks, and lessen the public health and environmental effects of energy-related pollution.

In manufacturing there are many cases of energy productivity investments, whether undertaken primarily to save energy or for other reasons, yielding large benefits for companies and whole industries. In Tennessee, a metal working shop reduces natural gas used to heat cleaning baths to almost zero while saving money, improving parts quality and reducing chemical use. A company and university team up to develop a way to make hydrogen peroxide at the user’s site on-demand that will save energy, reduce safety hazards and improve productivity. The U.S. iron and steel industry has kept competitive by expanding scrap-using electric arc furnace mini-mills while integrated plants start adopting natural gas-using direct reduction ironmaking. There are many more cases, in industry, buildings, transportation, public services, and utilities.

Achieving the goal of doubling American energy productivity will require attention to all economic sectors and all fuel and energy types. We can prudently take advantage of our new found hydrocarbon abundance, for example, leveraging high efficiency natural gas applications in homes and businesses while also using smart grid technology to better mesh electric and natural gas systems with distributed combined heat and power (CHP) and end-use energy efficiency and demand response resources. Transportation is also ripe for systemic advances in energy productivity--from individual vehicle technologies to smarter land-use and infrastructure planning to implementation of intelligent transportation technologies, and across all modes of surface, water, and air transport--that will improve business competitiveness, reduce traffic congestion, improve safety, protect the environment and enhance quality-of-life.

The potential for energy productivity gain is vast for all sectors of the U.S. economy. It comes from new technologies and techniques but it also comes from wider spread of existing best practices. But numerous impediments stand in the way. The Alliance Commission on National Energy Efficiency Policy’s recommendations for Unleashing Investment in Energy Productivity, Modernizing Regulations and Infrastructure, and Educating and Engaging Stakeholders will set a roadmap to double U.S. energy productivity to secure America’s prosperity, strength and well-being.

Dow would like to commend Senator Warner and the Alliance Commission on National Energy Efficiency Policy for their leadership and foresight in developing a comprehensive blueprint for America’s energy future. As a member of the Board of the Alliance to Save Energy, I would like to comment specifically on how the energy efficiency programs and conservation efforts, including federal support for energy efficiency R&D and incentivizing innovation and best practices on energy productivity across sectors, as detailed in the plan will contribute to America’s energy security. We also agree that it is wise to use energy efficiency efforts as part of an emissions reduction strategy.

Dow has learned firsthand how energy efficiency is both good for business and the environment. Since 1990, our manufacturing energy intensity, measured in Btu per pound of product, has improved more than 40 percent, saving the Company a cumulative $25 billion and 5,400 trillion Btus. All of the money saved through increased efficiency can be reinvested in our company. In addition to the savings, we have also reaped a significant reduction in our greenhouse gas emissions (GHG) footprint. During the same time period noted above, we have prevented over 200 million metric tons of GHG emissions entering the atmosphere, reducing the Company's absolute emissions footprint by more than 30 percent.

As one of the world’s largest manufacturers of innovative products that reduce energy use and as an energy consumer, Dow is hopeful that the Energy 2030 plan will be seen as a serious effort to secure America’s energy future.

Dow thanks Senator Warner for his leadership on this issue and the Alliance for their efforts in this important area.

As the Lawrence Berkeley National Laboratory explains, energy efficiency is NOT the same thing as energy conservation. Energy efficiency means using less energy to provide the same service, whereas energy conservation involves choosing natural lighting over electric lights, for example. Energy conservation is largely under the control of the end user, whereas energy efficiency is a function of energy production and transmission.

Energy efficiency is not the same as carbon efficiency, either. Indeed, carbon-based fuels today in most cases are far more energy efficient than renewables. One of the most serious (and valid) criticisms of subsidies for “renewable” energy is that they heighten the perception (but not the reality) that wind and solar are less expensive and more energy efficient than conventional fuels.

Energy efficiency and energy conservation are good for both consumers and society. We want to use energy as efficiently as possible, and minimize our use of energy, to keep expenses down. We want employers to minimize their energy costs as well, because that leaves more money for salaries, other benefits and profits that keep companies in business, which is good for employees, bosses, consumers and tax-dependent government agencies alike.

The key is not having government mandate, support and force us to use energy systems that don’t make practical, economic, technological or ecological sense – causing us to waste land, materials, energy and money.

Energy efficiency and conservation also help prolong the life of our existing fossil fuel energy deposits – and extend the time we need to develop alternative energy systems to the point where they too become energy efficient without subsidies. Indeed, using subsidies to lower direct prices for alternative energy does not truly lower the cost or make that energy efficient; it just transfers those costs from consumers to taxpayers (who in many cases are the same people).

In his seminal book Power Hungry, Robert Bryce debunks the worn-out claim that the U.S. lags in energy efficiency, that we as a nation are wasteful energy hogs. Bryce notes that between 1980 and 2006 the amount of energy needed to produce a dollar’s worth of gross domestic product fell by about 42 percent, second only to China (down 63 percent) and matched by the United Kingdom. This drop came during a period in which U.S. gross domestic product more than doubled, from $5.8 trillion to $12.9 trillion (constant 2005 dollars), and the U.S. population increased by 31.5 percent. During that same time frame, per capita energy consumption in the United States fell by 2.5 percent, third best worldwide.

However, Bryce added a major caveat to this otherwise glowing report. A major reason for these gains in energy efficiency was that energy-intensive businesses (steel, aluminum, glass and automobiles) have increasingly been moved overseas, as the USA shifted ever more toward a service based economy and higher cost energy. Moreover, increasing efficiency paves the way for the Jevons Paradox, which John Polimeni describes this way: “As you become more efficient, you do not have to spend as much to consume the same amount of (energy) resources. Thus, you can consume more with the same budget constraint.” In effect, this means that energy efficiency without energy conservation just leads to more and more consumption.

Comparing energy costs is today more of a political art than a science, largely because proponents of certain energy forms like to add intangibles to the actual cost borne by industrial, business and residential consumers. For example, wind and solar proponents add “social costs” to the price of fossil fuels that are based more on estimates and projections than on any accepted accounting methodology.

Similarly, fossil fuel proponents note that wind and solar energy are notoriously inefficient in terms of reliability on a 24/7 basis, and thus typically require fossil fuel plants to fully serve their customer base by generating 75-80 percent of annual electricity requirements. (Renewable energy proponents refer to these fossil power plants as “backup,” whereas in fact they are the primary energy generators.) The political costs of nuclear energy may even exceed the physical costs of energy production – and those costs are raised each time opponents campaign against nuclear power.

In a recent “primer” on electric generating costs, the Institute for Energy Research notes that the cost of generating electricity includes the capital costs, financing charges and production or operating costs – as well as the political costs (which include so-called social costs, both real and perceived). Thus, based on data submitted to the Federal Energy Regulatory Commission, the 2011 average production costs were 2.10 cents per kilowatt-hour for nuclear power, 3.3 cents/kWh for coal, and 4.51 cents/kWh for natural gas – all of which are generally available 24/7/365 to meet both normal and peak electricity demand.

As for wind, the IER points out that at 5:00 pm, on an average day when California hits its highest demand for energy, wind produces a mere 8.1 percent of installed capacity and contributes only 350 MW to the state's peak load requirement – out of 4.3 gigawatts of total wind energy generating capacity. At night, when wind generation is greatest, electricity demand is at its low point, and the percentage may be higher; but the contribution of wind power to energy efficiency only really matters in terms of its contribution to peak load demand. The same is true for solar, which like wind does not generate a constant flow of energy but has peaks and valleys that often do not coincide with peak demand.

There are two chief reasons for the gross net inefficiency of wind and solar. First, power generation becomes valuable only as that power is transmitted to end users – primarily through power generation lines that traditionally have been much shorter and have not been routed through lands (or waters) that include areas with maximum wind and solar generation opportunities, but also important wildlife habitats.

Second, wind and solar power cannot easily be stored for later use, and thus much of the power generated is wasted. Neither of these difficulties exists for conventional power sources. Building new transmission lines is both costly and energy, raw material and land-intensive. In addition, adequate energy storage technology (perhaps through gigantic land and raw materials-intensive batteries) is not economically or even technically feasible at this time.

For these and other reasons, the real costs of wind and solar energy must include the costs of maintaining traditional energy sources that are needed to back up and augment the intermittent energy demand supplied by these so-called “renewables.” Remember: the wind and sun may be renewable, but the steel, concrete, and other materials needed for wind turbines, solar arrays, transmission lines and primary fossil fuel electricity generation are not!

A far better way to address the short-term need for increased energy efficiency is to utilize creative new financing mechanisms – but not subsidies, which only transfer the costs of energy use. Such instruments could make it more feasible and economically sensible for homeowners, landlords, and even commercial and industrial facilities to retrofit existing buildings and amortize the added costs of “green” construction, so that obtaining mortgages and business loans is not more expensive. Several might be worthwhile, including utility financing based on decreased usage versus actual cost (these would have to be transferrable to future owners or renters until the full benefits are realized), or separate loan programs for energy efficiency projects that could be treated like liens in the event of a property ownership or occupancy transfer.

Even greater potential for increasing energy efficiency might lie in reducing energy loss through transmission lines and from the outlet to energy-using appliances or fixtures. As old power plants are retired, it may be possible to increase the use of distributed generation, which translates to smaller power plants closer to major population centers.

Nuclear power proponents have favored distributed generation as a tool for quickly increasing the availability of inexpensive, reliable electric power in many parts of Africa, for example. The same is true of gas-fired power plants that could take advantage of natural gas derived from “fracking” operations or redirected from oil production operations that are currently “flaring” that valuable energy resource, especially in poor countries that desperately need more electricity.

The bottom line is, well, the bottom line. Subsidies only transfer – and thus hide – the true costs of our energy sources. Mandates drive costs up, not down, by forcing us to build and rely on additional and more expensive energy systems would not otherwise find market penetration.

Above all, the rewards for energy conservation innovations need to be realizable. Otherwise, there is no incentive to reduce energy loss via duplicative generation and long-distance transmission, through power lines and between the breaker box and light bulb or wall socket.

With Duggan Flanakin

Energy security took on a more personal meaning for many Americans during the devastation inflicted by Hurricane Sandy. More than eight million people lost power during and after the storm. Yet communities, institutions, hospitals, and businesses that made investments in combined heat and power generation systems kept the lights and heat on—creating refuges for residents and maintaining necessary operations. Co-Op City in the Bronx, Salem Community College and Princeton University in New Jersey, and New Milford and Danbury Hospitals in Connecticut were among a handful of institutions able to maintain critical functions by generating their own electricity during the storm.

These are important examples of the value of energy efficiency technologies. Adopting systems such as combined heat and power also helps make U.S. manufacturing more competitive by lowering energy costs.

These technologies produce both electricity and steam from a single fuel at a facility located near the consumer. These efficient systems recover heat that normally would be wasted in an electricity generator and save the fuel that would otherwise be used to produce heat or steam in a separate unit. They run at 80 percent or higher efficiency while typical power plants operate at approximately 50 percent efficiency.

The benefits of deploying new combined heat and power facilities are significant. According to the Oak Ridge National Laboratory, the industrial sector could achieve $140 billion in new investment, create 600,000 jobs, and reduce total U.S. energy consumption by three percent if the United States doubled its use of combined heat and power by 2020. According to the U.S. Clean Heat and Power Association, the systems already in place produce nearly eight percent of electric power, saving building owners and industrial facilities more than $5 billion annually in avoided energy costs.

To capture this opportunity, President Obama set a goal of increasing combined heat and power by 40 gigawatts by 2020, up from 82 gigawatts today. This was an important step for creating jobs and helping American industries and institutions reduce energy costs and ensure power reliability. A broad coalition of manufacturers, end users, and developers strongly support initiatives that help industry harness energy-efficiency opportunities. These are pragmatic solutions that help make U.S. industries more competitive globally and help reduce the toll of future natural disasters.

The broad appeal of combined heat and power and industrial efficiency led to several bipartisan legislative proposals in the last Congress. We need to build on this momentum. The executive branch and Congress should work together on measures to achieve and exceed the president’s goal on combined heat and power. Doing so will help ensure that the United States enhances our energy security and resilience as well as maintains the country’s leadership in the global clean energy race.

Achieving Goal Could Cut Carbon Pollution By One-Third And Save $327 Billion Annually

The Alliance Commission on National Energy Efficiency Policy released a report today with recommendations that would put the U.S. on a path towards doubling its energy productivity by 2030. The Commission, which is chaired by U.S. Senator Mark Warner (D-Va.) and National Grid U.S. President Tom King, is a diverse coalition of energy leaders that includes representatives from energy utilities, academia, industry and environmental groups. Fred Krupp, President of Environmental Defense Fund (EDF), serves on the Commission.

The Commission found that a doubling of energy productivity (or obtaining twice as much output from the energy we use) would reduce U.S. carbon dioxide pollution down to four billion tons per year by 2030, which is 33 percent below 2005 levels. The full report is available at energy2030.org.

“The Alliance Commission’s recommendations are an innovative approach to greatly increasing our nation’s use of energy efficiency, which represents a huge – and largely untapped – opportunity,” said Fred Krupp, President of EDF. “Reducing wasted energy through efficiency is a true win-win solution that cuts harmful pollution and saves people money on their energy bills.”

The Commission’s recommendations are wide-ranging, covering multiple sectors of the economy. The recommendations include: increased stringency of energy efficiency standards for buildings and appliances, creation of financing mechanisms that bring down the cost of energy efficiency projects, reform of utility regulatory policies to enable full use of cost-effective energy efficiency and greater support for research and development.

Achieving the Commission’s goal of doubling energy productivity by 2030 would:

• Add 1.3 million jobs;
• Cut average household energy costs by more than $1,000 a year;
• Save American businesses $169 billion a year;
• Increase gross domestic product (GDP) by up to 2 percent;
• Decrease energy imports by more than $100 billion a year; and
• Reduce CO2 emissions by one-third.

EDF is particularly encouraged by the Commission’s recommendations related to energy efficiency finance and smart grid policies, which are a high priority for EDF. The Commission recommends that state and local governments work with utilities to create financing mechanisms, such as On-Bill Repayment (OBR) programs. OBR provides a new route to funding clean energy investments at attractive terms, relying solely on private third-party financing.

OBR programs offer an opportunity for residential and commercial utility customers to finance energy efficiency projects with loans repaid through their utility bills and financed at no additional cost to ratepayers. The Commission also recommends reforms to state utility regulatory policies that would break down barriers to utility investment in energy efficiency and enable greater use of advanced new technologies that create a smarter and cleaner electric power grid.

Though the U.S. currently lags behind other nations on energy productivity, the Commission believes there are more than $1 trillion in energy-saving opportunities with the right federal, state and local government support, and private-sector buy-in.

The Alliance Commission’s goal of doubling energy productivity by 2030 is ambitious, yet attainable, and it goes well beyond capturing the well-known, low-hanging fruit. I am confident that the solutions proposed by the Commission will drive innovation and technological advancements, which will modernize U.S. manufacturing and help us to compete globally.

Natural gas will be a strong partner in achieving the goal set out by the Alliance to Save Energy’s Commission on National Energy Efficiency Policy of doubling energy productivity by 2030. This bold objective will undoubtedly have significant positive impacts on our economy and national security. Achieving this goal of doubling energy productivity will rest on our attention to all the energy used across the economy -- also referred to as “primary energy”. Of the energy options available, natural gas is one of the most energy efficient due to the way in which it is produced, delivered and used in homes, buildings, industry and transportation. Highly efficient natural gas applications like high efficient space heating and water heating units and combined heat and power (CHP) technologies are available today and can deliver immediate energy productivity gains for homeowners and manufacturers alike. Expanded use of natural gas in these and other distributed energy applications will spur further innovation and deliver even greater contributions to the nation’s energy productivity over the long haul. Decreasing total energy consumption and cost of energy through optimizing the use of efficient natural gas in our nation’s industrial base will also improve the position of the companies that compete in a global market – thus boosting the other side of the energy productivity equation.

America’s natural gas utilities value the leadership of the Alliance to Save Energy and the Commission on National Energy Efficiency Policy, led by Senator Warner, and look forward to being part of the many collaborative efforts required to realize the vision of a robust, secure and efficient energy future for our nation.

This post was co-authored by David Hoppock, research analyst at the Nicholas Institute for Environmental Policy Solutions.

Improving the energy efficiency of homes, businesses, and vehicles has well-established benefits for the economy. A less appreciated, but no less important, benefit of increased efficiency is the protection it offers consumers and businesses from unanticipated energy price increases.

A prime example is the growing use of natural gas by the electricity sector. According to the U.S. Energy Information Administration, natural gas generation is the least cost option for new intermediate and baseload generation in most areas of the country and forecasts of natural gas prices are low relative to historical prices.

Historical natural gas prices show significant volatility, however, and past forecasts of low natural gas prices have led to significant investments in natural gas generation that later sat idle because of high fuel costs. Energy forecasts, especially over the 30+ life of power plant investments, often prove to be wrong. Investments in energy efficiency can protect consumers from long-term fuel price risk while saving them money today.

The Nicholas Institute for Environmental Policy Solutions and Duke University Professor Dalia Patino-Echeverri recently published a white paper analyzing the potential for energy efficiency to hedge natural gas price volatility. The modeling evaluated the operating costs for a new natural gas plant, considering the impacts of higher or lower natural gas prices and whether or not energy efficiency investments also occur. In all scenarios, the results showed consumers benefits when the new natural gas plant is coupled with energy efficiency investments. The benefits increase dramatically if there is an unanticipated jump in fuel prices to levels seen from 2005 to 2008, with potential savings of more than $100 million over the 30-year life of the plant.

These results demonstrate that increased efficiency can help protect consumers and businesses from fuel price fluctuations. Coupled with the environmental benefits of avoided generation, energy efficiency provides state and federal policymakers an important tool in achieving the dual goals of consumer protection and environmental protection.

The industrial sector in America has come under increasing competitive pressure in recent years. Ongoing trends toward the off-shoring of manufacturing, along with difficulties brought by the current economic downturn, have challenged the domestic industrial sector as it struggles to remain competitive against foreign competition and sagging domestic consumption. Improving the efficiency of the domestic industrial sector presents an opportunity to cut production costs and improve competitiveness to overcome the challenges that the sector now faces. Other nations are pursuing policies to improve their industrial sector energy efficiency with the express goal of becoming more competitive in global markets; to secure a true manufacturing renaissance, the U.S. must do the same.

Combined heat and power (CHP) is one significant energy efficiency technology that can be hugely beneficial for many industrial facilities’ competitiveness. CHP makes the most of fuel use by producing both electrical power and useful thermal energy for industrial processes and other uses, saving fuel and costs incurred by generating the two separately. CHP is a mature technology that has been used in various forms for more than 100 years; Thomas Edison’s Pearl Street power station in New York included CHP in the 1880s and today more than 12 percent of U.S. generation comes from CHP facilities, but there is much greater potential for CHP deployment domestically. Oak Ridge National Laboratory estimates that with appropriate policies in place, 20 percent of U.S. electricity capacity could come from CHP by 2030, reducing energy consumption by 5.3 quads – equivalent to around a quarter of what the industrial sector consumes today. That is money in the bank for America’s businesses that can be used to cut costs or improve production. President Obama recognized the important role CHP has to play in competitiveness, job creation, and clean air when he issued an executive order in August, calling on agencies to facilitate greater deployment of the technology nation-wide and setting a target of 40 gigawatts of new CHP capacity over the next decade – a 50 percent increase over today’s capacity.

Clean air regulations, if designed well, can encourage industrial energy efficiency, including CHP, as a compliance measure to reduce costs and increase competitiveness while reducing the air pollution – particularly greenhouse gases – that these regulations seek to remedy: energy savings from the Obama CHP goal would reduce greenhouse gas emissions by 150 million metric tons – equivalent to 37 large coal power plants. Low natural gas prices and regulations of industrial emissions have been encouraging more facilities to transition to natural gas and will continue to do so as facilities seek to comply with the latest environmental standards; as such fuel switching occurs, firms should look to CHP to assist compliance and to make the most of their natural gas use.

Improving the energy efficiency of the industrial sector with technologies like CHP can make U.S. businesses more competitive in a global marketplace while easing environmental regulatory compliance. Public policy at all levels of government – particularly from state regulators – must reduce barriers to CHP to ensure its benefits can be achieved, with fair accounting of the needs of utilities, industry, and ratepayers generally to ensure broad support. Helping the U.S. industrial sector reduce its energy intensity will reap major rewards and help lay the path to a domestic manufacturing renaissance.

There is a small, but hugely important, bipartisan flame for action on energy efficiency flickering on Capitol Hill. It can be seen in statements by key Members of both Chambers. Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) has indicated publicly that he is interested in pursuing efficiency legislation. Senators Shaheen (D-NH) and Portman (R-OH) will introduce a new version of their efficiency bill very soon and Energy Committee Ranking Member Murkowski (R-AK) has unveiled her plans for energy legislation in this Congress with efficiency as one of its pillars.

The Alliance to Save Energy -- through its Commission on National Energy Efficiency Policy that is led by Senator Warner -- will be adding significant "fuel" to the bi-partisan flame of interest tomorrow when we roll out a set of recommendations aimed at doubling U.S. energy productivity by 2030. (Doubling the amount of GDP produced from each unit of energy.) The Commission's recommendations show a clear and important policy pathway to creating more than a million jobs, saving hundreds of billions of dollars across all sectors of the economy and making our industrial sector more competitive -- all through driving energy efficiency. Perhaps most importantly, the approaches recommended can be embraced by conservatives and liberals alike; recommendations that we believe will be widely embraced by American businesses and consumers from coast to coast.

Today’s flickers of bi-partisan interest will certainly grow bright with the Commission's clarion call for action tomorrow. And more fuel will nurture the flame for national energy efficiency action when the National Association of Manufacturers (NAM) and the Business Roundtable issue their agendas for national energy policy later this month. We expect the energy efficiency planks of both of these respected business organizations to not only be consistent with the work of our Commission, but to amplify the message that there is an urgent need to act on energy efficiency as a first order of getting a national energy policy for the 21st century in place.

Stay tuned -- by May we're expecting a raging fire of interest in action on energy efficiency policy across both Chambers and the deep partisan political divide. And, unlike all other fires, the aftermath of this one will be completely positive -- a stronger and more resilient economy and a more secure homeland.

(These comments were submitted by David B. Goldstein, co-director of the Natural Resources Defense Council's energy and transportation program.)

Increasing America’s energy productivity is critical to jumpstarting our economy, according to a non-partisan commission report released today, but understanding why requires a closer look at the factors that caused the recession and how more energy efficiency can reverse them.

The Alliance to Save Energy’s “Commission on National Energy Efficiency Policy” is recommending a number of proposals that fall within three major strategies for reaching the “aggressive but achievable” goal of doubling U.S. energy productivity -- the economic bang we get for the amount of energy used -- by 2030.

The independent panel, which includes NRDC President Frances Beinecke as well as government officials and private interests, believes energy productivity can be dramatically increased with more investment, modernized infrastructure and reformed rules, and strengthened education and engagement of the public and policymakers on ways to accomplish this goal. The commission says this framework for driving energy efficiency in all sectors of the economy could add over a million jobs, cut carbon pollution by one-third, and save every U.S. household more than $1,000 annually.

And just how will that occur? Consider that economists from all sectors of the ideological spectrum, from right to left, agree that the recession from which we are still trying to recover was caused by these seven factors that eliminated jobs and held back growth:

• The mortgage meltdown

• Government deficits

• The risk of inflation

• The large trade deficit

• The low savings rate

• Weak consumer/business spending

• Too few American jobs: production being outsourced abroad

All of these problems were exacerbated by unnecessarily slow growth in energy efficiency – a consequence of the failure to pursue the types of policies recommended by the commission -- over the past 40 years. And all would be greatly ameliorated under the commission’s proposals to finally address the critical role energy productivity has in correcting them. For example:

• The mortgage default crisis was caused in large part by defaults by households in transit-deprived urban sprawl subdivisions where the cost of personal transportation and utilities over the life of a 30-year mortgage exceeds $400,000—more than double the amount of the mortgage. And many people took on this immense financial burden not because they loved sprawl or high utility bills, but because the bank would not loan them enough to buy a more efficient home in a walkable neighborhood. The commission’s recommendation to consider reductions in energy and transportation costs in qualifying for a loan will open up the financing needed to make homes more affordable and more efficient -- and to allow the younger generation to “afford” to buy a home somewhere that they actually want to live. NRDC, in partnership with other nonprofit organizations, initiated this idea over 20 years ago.

• The government allows companies to write off some $600 billion in energy costs every year, a figure that is predicted to grow. If America doubles its energy productivity, this write-off will be cut in half, and the deficit will be cut by over $100 billion a year. That’s more than a $1 trillion reduction in federal borrowing in 10 years—equal to a quarter of the bipartisan national goal of $4 trillion.

• Inflation has gone hand-in-hand with energy price escalation. By reducing demand for energy through efficiency, our cheapest and cleanest resource, energy prices will drop and inflation will be less of a problem.

Doubling energy productivity will also reduce the trade deficit and create local jobs, as well as save money for consumers and businesses. (For further details, see my book Invisible Energy.)

Looking at it another way: If too-slow growth in energy productivity since 1973 helped cause the recession, accelerating energy productivity not only promotes jobs and growth, it is critical to get us out of the trouble that led to the economic collapse of 2007-2008. Without better energy productivity -- and the national, state, and local policy reforms the commission recommends – we’re doomed to repeat the mistakes that caused the recession.

Fortunately, implementing the policy recommendations made today is not difficult. Most have already succeeded where they have been tried. And they shouldn’t be politically controversial either: at the state level, the leaders in making these policies work have included both Republicans and Democrats. Putting these strategies into place nationwide will promote increased consumer choice, better functioning markets, and improved productivity not only of energy – but of the entire economy.

Maybe if “energy efficiency” had a different name it would command more media attention. If it were called, say, the “bipartisan-effort-to-spur-construction-jobs,” or “the-common-sense-idea-to-help-consumers-save-on-costly-utility-bills,” or the “push-to-help-America-become-more-energy-independent,” perhaps it would be more top-of-mind.

It doesn’t sound like it should, but “energy efficiency” encompasses all of those priorities, plus it helps protect the environment. Best of all, it will jump start the economy without putting much of a dent – if at all – in the federal Treasury. I’ve devoted my career to furthering the cause of “energy efficiency” but even I’ll concede that, to most people, it doesn’t sound very stirring.

But anything that jump starts jobs in an industry as beleaguered as construction and retrofitting, while at the same time helping home- and business owners save on what has become for many Americans a painful monthly expense, is plenty exciting. Homeowners that save serious money each month on heating and cooling bills by installing greater levels of insulation certainly find it exciting. And so do small business owners who can put more money into product development or marketing rather than giving it to the utility company.

Energy efficiency’s many attributes have made it that rare Washington issue that earns support from both sides of the political spectrum. Conservatives love its cost-savings, its negligible impact on the federal deficit, and the way it empowers individual Americans to strengthen our energy independence. Progressives love the fact that it helps the environment and those individuals and families who struggle to make monthly utility payments. A recent Gallup poll suggests that consumers worry more about the high cost of energy than they do food, taxes, or health care. Regardless of ideology, everyone loves the way a renewed emphasis on energy efficiency will spur growth in sectors of the economy that sorely need it. Recent data suggests that, in many markets around the country, construction and retrofitting remain mired in recession.

Senator Warner (D-VA) certainly doesn’t need a primer on the value of energy efficiency. He’s been part of a deep and bipartisan coalition that includes Senators Jeanne Shaheen (D-NH), Rob Portman (R-OH), Michael Bennet (D-CO), Johnny Isakson (R-GA), Barbara Boxer (D-CA), and others, all devoted to enacting important energy efficiency initiatives. Each of these Senators, and such Representatives as Cory Gardner (R-CO), Peter Welch (D-VT), and David Cicilline (D-RI), understand that no matter where America gets its energy, it’s a shame to waste it.

If, as anticipated, the major energy efficiency bills of the 112^th Congress get reintroduced in the 113^th, there will be a formidable agenda around which the Hill’s champions can rally. Senators Shaheen and Portman are expected to reintroduce their industrial energy savings bill. The same holds true for Senators Bennet and Isakson’s SAVE (Sensible Accounting to Value Energy) Act, as well as bipartisan efforts to revive the popular PACE (Property Assessed Clean Energy) programs at the state level. Senator Boxer, who chairs the Senate Environment and Public Works Committee, has already unveiled efforts to make federal office buildings more energy efficient.

Congress also needs to make the homeowner energy efficiency tax credit known as 25C a permanent part of the tax code, so taxpayers can plan year-to-year. There are other energy efficiency tax credits, moreover, (specifically 45L and 79D) that need to be extended and expanded to spur smarter business planning and job growth.

“Energy efficiency” may never command headlines. But it ought to command our attention as Congress and the Obama Administration look to jump start policies that will help secure America’s economic and energy future.

Kate Offringa is the CEO and President of the Council of the North American Insulation Manufacturers Association (CNAIMA).

Senator Warner,

The possibilities for greater energy efficiency are gigantic. If we look just at electricity production we can see that the greatest product from out electricity production is wasted energy, aka, losses from the conversions, transmission and distribution of electricity. Please see http://www.eia.gov/totalenergy/data/annual/diagram5.cfm. There are all sorts of ways of capturing these electricity losses by incentivizing combined heat-power-cooling, trigeneration, or even using the “excess” lost heat from electricity generation for the combined production of heat, power, cooling, and even industrial processes, such as drying crops or thousands of other uses of this otherwise wasted heat.

Add to the massive inefficiencies inherent in the way we produce electricity to the inefficient light bulbs that many still use and the losses are multiplied along the circuit from burning the coal and gas and so forth. Then add in the losses due to the way we set up pipeline systems to move water, natural gas, and many other things s and we can see that 90 degree turns in pipeline systems in buildings and across long territories uses up more energy than would otherwise be needed if we built things in smoother angles. The inefficient washing machines, dryers and more in houses, and similar things in commercial buildings and industrial sites, contribute even further to the problems. Residential, commercial and industrial end users of electricity are very roughly 1/3 each of our electricity use give or take a very few percentage points for each. Most of our residential use is in lighting and heating, which given the way our houses are built and insulated, and the way we usually have lighting set up these are huge opportunities for improvements. Please see http://www.eia.gov/energyexplained/index.cfm?page=electricity_use on these points. The energy that commercial buildings use the most is electricity. Please see http://www.eia.gov/energyexplained/index.cfm?page=us_energy_commercial. The greatest gains from more efficient use of electricity may be found in residential and commercial uses. The right incentives for investments in more efficient building designs, more efficient end-use technologies and more could go a very long way. Surely there are some incentives on the books, but these have to be improved to get things moving in the right direction and faster.

Transport uses very little of our electricity. However, it is also massively wasteful of energy. Looking at how much of the BTU content of a gallon of gas actually goes into moving the typical automobile is a lesson in energy embarrassment – or at least it should be. A conservative estimate would lead to the conclusion that only about 15 percent of the gasoline is actually used to move the car down the road and run accessories (via alternators producing electricity in an inefficient way). Looking at the truly needed weight of the car for safety and other things the actual amount of fuel that goes to moving the passengers and cargo could end up to be a tiny fraction of this 15 percent. Now that is waste. Please see http://www.consumerenergycenter.org/transportation/consumer_tips/vehicle_energy_losses.html . Light-weighting of cars, improving the drive train efficiencies, improving the connections between breaking and energy production rather than energy losses and more could lead to huge efficiency gains with the right incentives.

Looking at the overall energy flows, of both useful and wasted energy should lead to a serious wake-up call for this country and many others not just on how much energy, money, security and more we are wasting. We also need to consider how that tossed away energy is adding to environmental issues. Wasted, unused energy in electricity generation and transportation, the two largest sources of greenhouse gases, is a major source of our problems. To put it more bluntly we could energy wasting our way to climate change and bad air --- globally.

If we put together this chart from the Lawrence Livermore National Laboratory on energy use and energy waste (the “rejected energy in the chart) https://flowcharts.llnl.gov/content/energy/energy_archive/energy_flow_2009/LLNL_US_Energy_Flow_2009.png with the major sources of greenhouse gases in the US from the EPA found here http://www.epa.gov/climatechange/ghgemissions/sources.html we could come to the bizarre conclusion that a major source of our greenhouse issues is rejected energy. Simply put, the energy we waste and get nothing from is causing big problems so why do we sit idly about and not do anything about it? Yes, I know there are many who question climate science. So, even if you do, as a thinking person would it make more sense to produce less not more waste?

Now consider extrapolating all of this wasted energy just in transport and electricity generation globally and then connect this with the overall global sources of greenhouse gases and one can see that we have as a world a real whopper of a problem (and I do not mean the Burger King Whopper, but agricultural land use and cattle digestion are parts of the problems). Take a look at the overall global sources of GHGs at http://www.epa.gov/climatechange/ghgemissions/sources.html. My grandparents and parents always told me “waste not, want not”. As a country we are massively wasteful in our energy uses. As a world we are as well. Yet, at the moments we fret about energy security we hardly ever look into the mirror and see that the problem is us.

(I agree with Scott Sklar in his intervention. Efficient water use is a big part of this. We need to look at the overall energy-water-food-land-minerals nexus to get a real feel for the waste and inefficiency out there. Water is a huge input into energy production, although it differs across energy sources. Energy production, transmission, distribution, refining, etc also has land footprints, water footprints, and even, for some, food tradeoff footprints. This is far from simple. Here is a video from the Circle of Blue that I show to many of my students and others that gets to some of these issues http://www.circleofblue.org/waternews/2009/world/video-no-reason/. Water is used in electricity generation, the production of oil and gas, and more. Energy is also used to move water, clean water and more. Energy sources that use a lot of food crops can increase the prices of food not just of the crops themselves, but also of meats given that some crops used for ethanol production are livestock feed. The linkages across energy, water, food, land, and minerals are very complex. If we are to take on the energy efficiency issues we also need to connect any policies with the use of these other valuable resources to get this right.)

How will this jumpstart the economy? By developing new technologies, creating new investments and new skills, and by starting up a booming energy efficiency industry that can work off of the massive energy efficiencies we have for decades to come we could create jobs and economic growth, especially in centers of excellence that the private sector could develop in tandem with the government. When we save energy we also save money. That means more could be left over for investing in new equipment, jobs and more. Consider how much we spend on energy that goes into electricity production. Now consider what I presented above on how much of that is wasted. Now look at how much energy goes into moving cars, trucks, aircraft, ships and more. Then consider how much energy and money is wasted in the lifecycle of the gasoline, diesel, bunker fuel, jet fuels, etc.

There is a massive amount of money to be made in energy efficiency improvements. Creating the right markets (mostly a private sector activity) and creating the right incentives (mostly a government activity with private sector input and efforts needed) can produce an economy within the economy. There could be trillions globally to be made in energy efficiency improvements if the costs of the improvements are brought down to the point that they will be vastly applied. This could be a matter of invention, innovation and incentives. We are limited only by our imaginations and our collective abilities to lead toward a more energy efficient future.

Then, of course, there is that problem of dysfunction in government. My guess is the real changes in energy will likely come with the private sector leading and the government following.

It’s always good to investigate whether there are untapped opportunities to improve the performance of the U.S. economy, and Senator Warner’s question raises the question whether enhanced energy productivity might be one such.

My answer would be yes and no. Yes, we will be better off if we can continue to increase the goods and services we produce with less energy input. The Energy Information Administration, for example, reports that the country has gone from 15.4 thousand Btus per real dollar of GDP to 7.3 thousand Btus between 1973 and 2011. And, since energy generally is more expensive today than it was in 1973, the savings per unit of GDP are even greater. Continued improvement in energy productivity should lead to even more savings and a more efficient economy.

Are there opportunities to save more energy or, as Senator Warner asks, to increase output per unit of energy input? Sure there are. Several of my colleagues are identifying such opportunities within their postings, and I’m personally aware of opportunities that the U.S. military is availing itself of, including smart microgrids, more efficient engines and motors, lighter weight materials, and many others. We can expect the continued application of technology that saves energy in our economy and the development of yet more.

Why so? Because energy has a cost and therefore there is natural incentive to conserve. The trick is to devote resources to energy savings – or energy productivity enhancement – in cost effective ways. Spending more to save energy than can be saved is counterproductive. Those resources could have enhanced the nation’s economy more elsewhere.

But if the cost of energy already provides an incentive to conserve, should we expect a new surge of investment in energy efficiency to jumpstart the economy? Probably not. There may be ‘market failures’ in some instances, which could justify additional investment where they occur. But for the most part businesses and individuals are aware that energy is costly and that they can save some if they choose.

How might government help the process along? For one, by providing accurate information to consumers and businesses about energy saving opportunities and energy costs. For another, by funding basic scientific research to develop entirely new energy saving technologies. And third, by making sure that its own energy use is efficient. These things may not jumpstart the economy, but they will help ensure that we use energy more wisely, which means we’ll use it more productively. Not a bad result at all.

Productivity gains generally correspond to improvements in innovation and technology; efficiency on the other hand is related to producing a given level of output with less input. A quick scan of the summary material for the Alliance Commission on National Energy Efficiency Policy reveals the group doesn’t appear to make a clear distinction between efficiency and productivity, and in places it seems to use them interchangeably. For the purpose of this topic, those terms will be used in the more traditional way.

Over the past 40 years, the federal government has sponsored a large number of programs aimed at increasing efficiency by altering market forces either with mandates or subsidies. While proponents of government programs point to significant efficiency gains—reducing energy intensity by 50 percent – too little attention has been paid to the price of achieving them or to the true cost of achieving them.

Cars get more miles per gallon, household appliances and HVAC systems have higher efficiency ratings, etc. – but those products also cost more. In the case of cars, Corporate Average Fuel Economy (CAFE) standards killed the station wagon, led to about 2,000 highway deaths per year, and caused many trucks to be converted to SUVs to get around those standards. Some loopholes have been closed but the new standards come with sticker price shock, which means that older cars will stay on the road longer and consumers may be forced by price to choose their second best choice.

So, when the Commission lays out its blue print to “to double energy productivity over the next 20 years” and "get more bang for our energy buck," it would do the public a favor by following up to identify the externalities involved, to be clear on the role of price, and to identify how rent seeking companies will likely game the system. That may seem cynical, but that has been the history of past government initiatives. Trust but verify is a reasonable way to view this initiative.

When Germany and Japan are held up as examples of being “at the forefront of energy productivity gains,” there is reason for great skepticism. Japan has had more than a ‘lost decade” of economic growth, and Germany’s rush to embrace “alternative energies” has driven up electricity costs, created an incentive for businesses to go elsewhere, and been a drag on economic growth and employment.

An analysis of Germany’s renewables experience by the European Institute for Climate and Energy warned of “impending doom for the German economy caused by the lemming like charge to the Green mirage of affordable renewable energy.” The report went on, “… after tens of billions of euros spent on renewable energy systems and higher prices for consumers, not a single coal or gas-fired power plant has been taken offline. To the contrary, old inefficient German plants have been brought back into service in an effort to stabilize the grid.”

The Energy 2030 plan is intended to “provide policy solutions through investments, modernization, and education and include(s) an in depth analysis that shows how these gains in energy productivity can increase U.S. GDP up to 2 percent, create annual savings of $327 billion, and produce household savings of $1,039.” It is fair, therefore, to ask what actual market failures have lead to the need to tell entrepreneurs why they have not been smart enough to make investments and modernize to increase productivity and profitability. If barriers are the result of poor information systems, regulatory impediments, or poor tax policy, then the barriers should be the focus of recommendations to remove them to increase efficiency and productivity.

Most business people and economists have concluded that strong economic growth is associated with corporate tax reform, increased business confidence in fiscal policy, and stable and predictable rules of the road. The uncertainty that has existed over the past five years and costly programs and regulations have held back economic growth and held up unemployment. Robust economic growth will come from changing those conditions, not another commission.

The energy efficiency field has been dominated by top down engineering analyses that propose solutions that often have turned out to be impractical and uneconomic. When they are not adopted, the result has not been to drill down to understand why; it is to claim market failure. The Energy Star Program has been a success because it dealt with information failures and incentives for companies to develop information to improve their own efficiency and productivity. On the other hand, programs like banning incandescent light bulbs and solar panel incentives have created boundless opportunities for rent seekers and examples of the “Baptist-bootlegger” theory of public choice. A classic example was documented in a Wall Street Journal Opinion piece by T.J. Rodgers on December 8, 2011—Subsidizing Wall Street to Buy Chinese Solar Panels.

(These comments were jointly written by Rep. Honda and Jean-Baptiste Loire, president of Infineon Technologies North America.)

That President Barack Obama named climate change in his inauguration speech as one of his top priorities in his second term is welcome and timely news. The failure in December of negotiators meeting in Doha, Qatar, to reach a meaningful international agreement to reduce greenhouse gas emissions reminds us that individual action will always be the best way to prevent climate change. Thankfully, that work isn't as hard as it sounds, and it is where President Obama will find fertile ground going forward. In reducing energy consumption and corresponding carbon emissions there is much to be gained from untapped energy-efficiency opportunities. It's that simple; and when it comes to electronics, it's about being smart.

The good news is that we can get the same amount of work done with less energy. On the energy-efficiency front, however, we have only just begun to tap available opportunities and build upon the success of efforts like the Department of Energy's Energy Star certification program. The U.S. economy today is achieving only 14 percent of its energy-efficiency potential. Clearly, there is still a lot of room for improvement.
Our Silicon Valley, already the driving force in the electronics revolution, is poised to make even greater contributions toward improving America's energy efficiency. The American Council for an Energy-Efficient Economy suggests that semiconductor-related technologies can support an economy that is 35 percent larger by 2020 while limiting growth in energy use to just 7 percent.

These are the kinds of energy savings that we must witness if we are to make our country and our planet greener, cleaner and smarter. That is why Rep. Honda will introduce the Smart Electronics Act in the 113th Congress to address the greenhouse gas impacts and energy costs of proliferation of electronic devices throughout the world.

Smart electronics integrate available and emerging technologies to bring new levels of efficiency to hundreds of devices we use every day. For example, the semiconductors responsible for adjusting the electrical current between our wall socket and our plugged-in devices work in tandem with control chips to reduce power loss. This combination can dramatically alter the energy use of electronic gadgets and appliances.

Another example of employing smart electronics is replacing the simple on/off switch of an in-wall air conditioner with a chip-controlled, variable-speed electric motor that can better maintain a steady temperature. This saves one about $70 in annual energy costs. That adds up to as much as $900 million in annual savings for all residential air conditioners in the United States.

There's also plenty of room to improve the efficiency of consumer electronics products such as televisions and tablet computers. Practically all of these gadgets draw stand-by power to support "instant-on" features. Smart design can raise the efficiency of power and control electronics in these products to more than 95 percent, compared with today's typical 75 percent to 80 percent efficiency.

Other opportunities for dramatic efficiency improvements related to semiconductor technology include the transition to LED lighting (which provides at least five times more light per watt than older bulbs) and the accelerating transition to hybrid and full electric automobiles.

Both common sense and real-world experience point to improved energy efficiency as a powerful tool to enhance energy independence and ensure lasting economic strength. We need continued innovation in smart electronics technology, however, to make these tools affordable, commonplace and up-to-date. We also need to make consumers aware of the benefits of these innovations and give them the information they need to judge device efficiency.

In 2013, let's make a resolution as industry leaders and policymakers to help consumers make the smart choice for both the planet and their pocketbooks by tapping this energy-efficiency resource.

As the United States looks to stabilize energy prices and enhance energy security, energy efficiency practices and technologies can be effective tools in helping to meet society’s expanding energy needs. Sustainable practices extend beyond environmental stewardship; energy efficiency and conservation produce significant cost savings for consumers and make American businesses more competitive globally.

Despite the fact that the Energy Information Administration (EIA) projects that total primary fuel consumption will rise by 0.3 percent per year from 2010 to 2035, energy use per capita will decrease over time due to advancements in energy efficient technologies, expanded efficiency practices by the electric power sector, and additional changes in consuming behavior. Not only will energy use per capita decline, but energy use per dollar of gross domestic production (GDP) will decline even more significantly. In the EIA’s Energy Outlook for 2012, the agency predicts that energy use per dollar of GDP to be about 4,440 British thermal units (Btu) in 2035, or about one-third of the 1980 level. While current advances have significantly reduced overall energy consumption, additional steps in the future can increase the availability and affordability for all consumers looking to reduce energy expenditures without compromising economic growth.

One of the most promising ways to produce energy more efficiently is combined heat and power (CHP) – a concept little known to the average consumer. CHP systems generate electricity and thermal energy in a single, integrated system. Rather than a single technology, CHP systems use a variety of fuels to provide reliable electricity, thermal power, and mechanical power for factories, hospitals, universities, and commercial buildings. Currently, CHP accounts for about 12 percent of U.S. generating capacity, saving consumers over $5 billion a year. According to a 2008 study by the federal Oak Ridge National Laboratory, “If the United States adopted high-deployment policies to achieve 20 percent of generation capacity from CHP, it could save an estimated 5.3 quadrillion of fuel annually – the equivalent of nearly half of the total energy consumed by U.S. households.”

Oil and natural gas companies have also implemented new practices and technologies to reduce energy utilized during production and to advance other environmentally friendly practices. Of note, the Research Partnership to Secure Energy for America (RPSEA), funded by the Department of Energy, has played a key role in furthering programs and technologies that can more effectively and efficiently produce domestic resources. At a time of growing domestic oil and natural gas development, it is all the more important that the federal government support funding for cost-effective and beneficial programs such as RPSEA now.

For individual households, consumers need stronger policies that increase the affordability and effectiveness of energy-efficient products, including everything from dishwashers to window film and vehicles. For many consumers, the costs for extensive energy-efficient retrofits or for an alternatively fueled or energy-efficient car remain out of reach – even after considering state and federal incentive programs. Therefore, it is imperative that Congress and the Administration focus support on research and development efforts that can help lower the cost-differentials for some of these products. By doing so, the government may see higher adoption rates of affordable technologies and practices. Moreover, once these products reach cost-competitiveness, federal and state programs can focus resources on educating and encouraging the public to adopt energy-efficient products as opposed to focusing on incentive programs.

Finally, the federal government must continue in its efforts to promote private-public, voluntary partnerships, such as ENERGY STAR and SmartWay. Efforts such as these have not only increased the public’s awareness of energy efficiency but can also help protect consumers from “green washing.” For ENERGY STAR specifically, the federal government must be more vigilant to ensure that all products labeled as energy efficiency undergo more regular and thorough audits by independent parties.

On January 12, 2012, the non-profit American Council for an Energy-Efficient Economy (ACEEE) released a provoking report: "The Long-Term Energy Efficiency Potential: What the Evidence Suggests," the new ACEEE report outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year (the equivalent of $2600 per household annually).

Sean Casten, CEO and President of Recycled Energy Development, one of the leading waste heat companies describes the issue more bluntly, “US today converts fossil fuel into electricity at 33% efficiency, throwing away two-thirds of every unit of fuel we burn in cooling towers and smoke stacks. That’s the same conversion efficiency we had last year. That’s the same efficiency we had in 1980. In fact, you have to go all the way back to 1957 to find a year when the electric sector wasted more energy than they do today.”

Efficiency in how we use energy is not the only issue confronting our nation, our economy and our security. Water efficiency is as important. The National Conference of State Legislatures report, “In the United States, the electricity industry is second only to agriculture as the largest user of water. According to the National Renewable Energy Lab, electricity production from fossil fuels and nuclear energy requires 190,000 million gallons of water per day, accounting for 39% of all freshwater withdraws in the nation. “A large amount of energy is needed to extract, convey, treat, and deliver potable water. Additionally, energy is required to collect, treat, and dispose of wastewater. Approximately 4 percent of U.S. power generation is used for water supply and treatment and about 75 percent of the cost of municipal water processing and distribution is electricity, according to the Department of Energy. Water demands will increase as agricultural demands increase with the need to feed a growing population. In 2000 irrigation accounted for about 40 percent of fresh water withdraws in the U.S., according the U.S. Geological Society.

The question for us as a country is : “How can we be globally competitive if it takes more energy and water to produce goods and services than our closest global competitors?” My answer, is: "we can’t". Energy efficiency is always less expensive and faster payback than adding energy generation, yet that seems all we focus on in our public policy debates.

The World Resources Institute issued a report on energy intensity of countries per unit of GDP, and the United States was $221.7 while Japan was $154 and Germany was $163.9. China’s energy intensity was slightly higher than the US, but in a June 1, 2011 article, Reuters reported that “China's next five-year plan calls for continued cuts: a 16 percent reduction in energy intensity and a 17 percent decrease in carbon intensity -- the amount of carbon emitted for each unit of economic output, usually gross domestic product.”

According to the Natural Resources Defense Council, “New lighting standards required a 25 to 30 percent improvement in energy efficiency for light bulbs, which would save consumers almost $100 per year in energy expenses (about $12 billion a year nationwide). They would also offset the need for about 30 large power plants, and reduce domestic carbon pollution by 100 million tons per year -- the equivalent of taking 17 million cars off the road each year.”

According to the US Department of Energy, In 1994, electric motor-driven systems used in industrial processes consumed 679 billion kWh—23 percent of all electricity sold in the United States. These machines make up by far the largest single category of electricity end use in the American economy. Based on detailed analysis of the motor systems inventory, we estimate that industrial motor energy use could be reduced by 11 to 18 percent if facilities managers undertook all cost-effective applications of mature proven efficiency technologies and practices. That is, implementation of all well-established motor system energy efficiency measures and practices that meet reasonable investment criteria will yield annual energy savings of 75 to 122 billion kWh, with a value of $3.6–$5.8 billion at current industrial energy prices.1 Many kinds of motor system efficiency improvements yield benefits in addition to energy cost reductions..On average, the manufacturing sector could reduce industrial motor energy use by 11% to 18% using mature, proven efficiency technologies and practices

Last year, commercial and industrial buildings used roughly over 50% of the energy (heat and electricity) in the U.S. economy at a cost of over $400 billion, and all buildings including 42% of U.S. electricity. In the United States, residential buildings consume 22% of the country’s total energy and also are responsible for 22% of carbon dioxide emitted to the environment.

In the Construction Research Congress study in 2012 “Evaluating Energy Savings Potential in United States Residential Buildings”, results of this study indicate that 29% and 19% of energy used for space heating, space cooling can respectively be saved by improving building components such as glasses and thermal insulation. In addition, results of this study show that 5% of total electricity used in residential buildings is delivered to non- efficient refrigerators, freezers, and light bulbs. In 2009, the United States (U.S.) residential and commercial buildings consumed 41% of total US energy demand, which the residential building share was 54% and 60% of primary energy in residential buildings is used for space heating, space cooling, lighting, refrigerators, and freezers (EIA, 2011; DOE, 2011). Also, 22% of carbon dioxide emitted to the environment was produced by the residential building sector. A study by McMahon et al. (1990) showed that $46 billion would be saved by mandating the adoption of least-cost design features through the US Appliance Efficiency Standards between 1990 and 2015. In another study, Balares et al. (2000) estimated that energy consumption in insulated buildings may be decreased by 20- 40% in comparison with non-insulated buildings. Furthermore, advanced lighting systems typically reduce lighting energy consumption by 70% (Dolin, 1997).

Finally, another way to look at energy efficiency is that it precludes vast amount of capital going to build new power plants,. Thus this massive capital allocation can be deployed to other economic and human needs and services. IHS CERA , the global information company. reported in 2009 that new power plant prices had roughly doubled since 2000.

A great 2008 study by The Edison Foundation and The Brattle Group, “Transforming America’s Power Industry: The Investment Challenge 2010-2030” states. “By 2030, the electric utility industry will need to make a total infrastructure investment of $1.5 trillion to $2.0 trillion.2 The entire U.S. electric utility industry will require investment on the order of $1.5 trillion … the cost could increase to $2.0 trillion (under various scenarios.For the Reference Scenario, we determined that the entire U.S. electric utility industry would require an investment of $697 billion to build 214 GW of new generation capacity under existing energy efficiency and distributed energy programs and state-level renewable programs and carbon policies. The implementation of realistically achievable energy efficiency and distributed generation programs by electric utilities would reduce the need for new generation capacity significantly; dropping the Reference Scenario’s forecast from 214 GW to an estimated 133 GW, or by 38 percent.

The United States is a big country with great visions, and our energy policies have been driven by “drill baby, drill” and for electricity generation, “build, baby build”. But the smart economic and security mantra needs to change to “save, baby save” – a concept that my depression-era parents understood, but this new political generation has lost awareness of.