Fighting the Energy Security War at Home through Energy Efficiency

Overlooked in the debate regarding war in Iraq is what Americans can do at home to protect our energy security. As America goes to war, reducing Persian Gulf oil imports is central to protecting our energy security. Military action won’t reduce oil imports: for that we need action on the home front. The least polluting and most cost-effective home action to cut imports is improving U.S. vehicle fuel economy.

With today’s technology, we can achieve an average fuel economy of 40 miles per gallon; that would save us over 3 million barrels per day, more than we import from the Persian Gulf. Consumers can start us on that path by choosing fuel-efficient cars and trucks, and Congress should follow suit with stronger fuel economy standards and other policies.

How Energy Efficiency Helps Energy Security
Energy efficiency is an essential element of national security. Our oil dependence on the Middle East imposes large military costs to keep Persian Gulf oil fields secure. Our dependence also fans the flames of extremism by perpetuating the image of Western nations as exploiters of producing nations’ resources. Our oil imports indirectly support international terrorism as oil revenue is potentially diverted to hostile extremist organizations.

At home, the increased threat of terrorist attacks puts a vast energy supply infrastructure at risk, including oil and gas pipelines, petroleum refineries, electricity transmission systems, and nuclear power plants. To the extent that energy demand outruns the capacity of the supply infrastructure, the risk of a terrorist disruption having a large impact is increased.

Energy efficiency reduces pressure on our energy security in several ways.

* Efficiency reduces the risk of oil shortages and price shocks. Persian Gulf oil producers currently hold most of the world’s spare production capacity, giving them enormous market power. But if efficiency keeps demand down, their market power is reduced. This happened in the 1980s, as CAFE standards for auto fuel economy helped break the grip of the OPEC cartel on world oil prices.

* Efficiency reduces the risk of damage to our supply system. Energy efficiency reduces the load on all components of the energy supply system (power lines, transformers, pipelines, pumping stations, power plants, etc.), which reduces the risk that a failure in any one segment will damage the entire system. And coupled with distributed generation, where efficient and renewable technologies generate power at many smaller sites rather than a few large power plants, efficiency makes the total system more secure.

* Efficiency protects U.S. economic security. Our economy is vulnerable to energy shortages and price shocks only to the extent that it is energy-inefficient. The more units of energy we use per unit of economic output, the bigger the shock to the economy when shortages or price spikes happen. Energy efficiency softens such blows by reducing the impact of energy on the economy as a whole.

What Individuals Can Do
We can each help the energy security effort by choosing energy efficiency in our daily lives and our major purchases. Since we use most of our oil for transportation, choosing the most fuel-efficient car or truck that meets our needs, and then driving and maintaining it for efficiency, can make a big difference in oil imports. ACEEE’s Green Book: The Environmental Guide to Cars and Trucks, which can be obtained through www.greenercars.com, lists the best-performing models in all vehicle classes, giving consumers a wide range of choices while they save gasoline.

Individuals can cut their home energy bills by following ACEEE’s Checklist for Action. The website also allows people to purchase ACEEE’s Consumer Guide to Home Energy Savings.

What Congress Can Do
An energy bill nearly passed Congress last year, and similar bills are being introduced this year. A bill that really helped the fight to reduce oil dependence and energy insecurity would:

* Raise federal fuel economy standards. Set a target of reducing oil use in vehicles by at least 1 million barrels per day in 2010 and 3 million barrels per day by 2020. Close the light truck loophole that lets SUVs get 25% fewer miles per gallon than other vehicles, and close the dual-fuel loophole that give automakers credit for producing vehicles capable of burning multiple fuels, even if they never use those fuels. Saving 1 million barrels a day would be more oil than we now import from Iraq, and would cut consumer gasoline bills by $23 billion annually.

* Create new energy efficiency standards for appliances and other equipment, including traffic signals, exit signs, torchiere lamps, distribution transformers, electronic products’ standby power, vending machines, ceiling fans, commercial refrigerators, and unit heaters. These standards would save 13 Quads by 2020, which translates to about $78 billion in energy bill savings to consumers.

* Provide tax incentives for high-efficiency products, including high-efficiency vehicles, new homes and commercial buildings, home appliances, home heating and cooling systems, hot water heaters, and combined heat and power systems. These incentives would save about 15 Quads (or about $90 billion) by 2020.

* Establish energy efficiency targets for electricity suppliers. Electricity use has been growing faster than any other energy type, and electricity generation is responsible for the majority of U.S. air pollution and greenhouse gas emissions. In addition, electricity grids are being overloaded in some regions. Moderating electricity demand growth is essential to a sustainable economy and a cleaner environment. Congress should set multi-year targets for power sellers to save a small percentage of electricity sold, in a credit-trading system that would allow the market to find the best producers and lowest costs. This policy would save about 14 Quads (or about $84 billion) over 10 years.

Together, these policies would save the equivalent of eight years’ worth of Persian Gulf oil imports. And in addition to saving Americans hundreds of billions of dollars in energy bills and boosting our economic recovery, the policies would also reduce air pollution and greenhouse gas emissions. Energy efficiency thus serves our energy security, economic prosperity, and environmental goals, and should be a central element of U.S. energy policy during and following this conflict.

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