Self Fulfilling Prophecies

 I fully admit to being an energy wonk and this week I have been engaged in an intensely wonkish activity, reading government energy reports from the Energy Information Administration, which is about as wonky a bureaucracy as you could ever hope to find.  The EIA is the division of the federal Department of Energy that is responsible for tracking, reporting and forecasting energy use within the U.S.  I have been perusing the latest EIA forecasts for energy through the year 2040, in other words a 27 year forecast.  The experience has actually gotten me a bit riled up, which is probably surpising, given how truly dull the data is.

What's bothering me is that the EIA forecasts appear so completely out of touch with what is going on in the energy world today, especially renewable energy.  The EIA Annual Energy Outlook for 2013 forecasts a world in which they basic energy mix of the United States remains relatively unchanged for nearly 30 years, a rather depressing future that only oil companies could love!

 

For example, according to the EIA forecast by the year 2040 the United States will be using less coal to generate electricity than it does today(42%) which is a good thing.  However, it projects that way out in 2040 we will still be getting 35% of  our electricity from burning coal.  My initial reaction to this was, "What, you think we are all suicidal?"  I mean think about it, 27 more years of spewing coal into the atmosphere! 27 more years of poisoning the land with strip mining and coal ash.  By that point global warming would be so bad we could go sunbathing in the arctic!  Seriously, how could the EIA presume that in 27 years, with renewables getting cheaper every year, that we would continue to use coal to generate the bulk of our electricity? I wonder what the EPA thinks of this type of forecast!  The EPA has recently cracked down on the types of emissions new coal plants can produce and appears ready to put out equally strict emissions standards for existing coal plants.  Wouldn't it be far more logical to presume that these EPA regulations will significantly reduce the use of coal for generating electricity?

The problem with this recent IEA forecast is not only that it flies in the face of environmental reality, it flies in the face of economic reality.  The cost of using coal to generate electricity is already more than using either natural gas or renewable energy, even more so if you count the cost of the damage that coal does to our environment and health.  Moreover, all the data suggests that coal reserves are progressively getting more expensive to mine, not less. The EPA emissions regulations will probably also drive up costs for those plants that might try to reduce their emissions, rather than shutting down.  Given these increased costs why would we presume that the U.S. will continue to use a more expensive energy source for the next 27!

A Poor Track Record

The EIA doesn't have a particularly good track record when it comes to forecasting.  It completely missed the change in oil demand brought on by the growth of countries like India and China.  It also missed just how expensive oil would become given increasing global demand.  So in that sense I shouldn't be surprised that they seem to be missing the forecasts once again.  What bothers me the most about these reports is the ways in which they seem to dismiss renewable energy without any real justification.

For example, the report uses as a premise that federal tax credits for renewables will expire in 2016 and will never be renewed.  Huh?  On what basis does the EIA make this assumption?  Support for energy tax credits has been growing and attempts to kill them, such as when some members of Congress recently tried to make Wind tax credits part of the sequester, got completely rejected because the Republican congressmen from the plains states know just how fantastic renewables have been for their economy.  Why therefore should we presume that tax credits will expire and never be seen for the next 25 years?

Similarly, the report seems to totally discount the effect that state level Renewable Portfolio Standards (RPS) could have on renewable energy expansion.  The report says "...they have been relatively quiet in terms of state program expansions."  Again, I gotta say "Huh?"   State level RPS programs have been going gangbusters for the last decade and several states such as California and Colorado have even increased their renewable energy targets given how successful they have proven to be so far. And people are starting to notice that the states with RPS programs are having the greatest overall economic success.  Therefore why would we make energy forecasts assuming that all of the states will suddenly abandon their RPS programs?

Self Fulfilling Prophecies

OK, I realize many of you are probably thinking, so what if EIA got the forecasts wrong.  Prognosticators always get things wrong.  True!  However, it is also true that forecasts and predictions can quickly become self-fulfilling prophecies.  That is true not only in the negative sense but in the positive sense as well.  Predict good things will happen and more often than not they do.  Heck, this is part of the reason why Renewable Portfolio Standards work so well.  We presume a specific target for reducing our fossil fuel dependence, and sure enough the regulations and other efforts needed to make it happen, do happen. 

This is why we need to keep on the EIA about getting these forecasts right.  If they are going to project a dim, never ending fossil-fuel future they should be pushed to justify it, less we all become caught up in a future that we don't want to live in!



 

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Energy Saving Tips for the Frugal Homeowner

Editor's Note:  This article is a guest post from consumer advocate Michele Duchet.  Michele writes frequently on money and consumer issues. He has written this article on behalf of Texaselectricityproviders.com.

Many people dread the time of the month that their power bill arrives. The power company always seems to charge too much for too little. Usually, people respond by turning off the air conditioner or the heater. They don’t often realize that it’s easy to cut down on your power bills without cutting down on your comfort. Often, lopping a huge chunk of your utility bills requires nothing more than to be alert to possible sources of waste.

Finding a cheaper source of energy

One of the first things that you can do to save on your energy bills is to find out if you live in a state where you get to choose whom you buy your electricity from. Starting back in 1977 many states began to restructure their energy infrastructure in order to allow consumers a better choice of electricity and natural gas providers.  Currently 17 states allow consumers some choice of energy providers.  If you are not sure if your state provides options you can usually find out by contacting the state level energy department.  Also, many alternative energy providers provide online maps which can show you which parts of a state they serve.  For example, in the Lone Star State, you can look up an alternative energy provider such as Ambit Energy and get a Texas coverage map for the cheapest utility and then painlessly switch power utility providers. Once you find the cheapest utility, it’s time to look indoors for more savings.

Being alert in the summer

• Awnings used to be very popular 50 or 60 years ago – even on high-rise apartment complexes. These days, with air conditioning easily available, awnings go out of style. If you live in a warm place like Texas, you could easily cut down air conditioning power consumption in rooms that face the sun a large part of the day by shading every window with an awning. If you don’t like awnings, shutters can be a good idea, too (you should probably stay away from using blinds on your windows – they are a dust magnet and tend to be a maintenance nightmare)
• Green roofs are not a modern invention. People have been covering their roofs in vegetation for centuries – even sloped roofs. If the roofing on your house can support edge-to-edge the roof vegetation, you could get a great-looking roof, help the environment and significantly improve the energy efficiency of your home. Since leaves always have water evaporating out of them, the air around any vegetation remains cooler than the air in the surrounding environment. While you’re at it, you could look into covering your walls with vines and creepers, too. As long as you get the job professionally done, you shouldn’t have any trouble (poorly planned vine cover projects, for instance, attract plenty of rodents).
• If you live in an arid climate, you should consider getting an evaporative cooler instead of an air conditioner. It could save you $200 each year on your electricity bills.
• Finally, here is an unconventional idea –as far as possible, don’t cook indoors. If you can possibly manage it, consider building an outside summer kitchen in your backyard. You’ll keep a lot of your stove’s heat outside this way.  In fact, consider a solar oven as a way of cooking.  Solar cookers are inexpensive and easy to use.  You can find out more about them in our Solar Energy section.

Being careful when it’s winter

• Your first step is to insulate your house as well as you can. Even if you live in a rented house, you could consider spending your own money to get the attic insulated. Attic insulation is cheap enough that you could conceivably make your money back in energy savings. Finding every drafty door, window and switch plate and sealing any sources of air leakage is important, too.
• Your next step would be to get a quality Energy Star-rated programmable thermostat. You could easily save $100 on your heating bills with one of these.

Finally, winters are when the holidays come around. While all the festive lighting can be cheerful to look at, conventional lights can waste immense amounts of energy. Consider getting LED holiday lights for holiday cheer that is sensitive to both the environment and your wallet.