For All the Ecological Concern, Economy Drives Energy Use

[OKIsItJustMe]

http://online.wsj.com/article/SB121185399739121799.html

For All the Ecological Concern,
Economy Drives Energy Use

By JEFFREY BALL
May 27, 2008; Page A14

Gasoline consumption is down. Hybrid-car sales are up. Wal-Mart is selling millions of squiggly energy-efficient light bulbs. Proof of a new wave of environmental consciousness?

For all the talk about global warming, what is prompting Americans to rein in their fossil-fuel use isn't the effect of their consumption on the planet. It is the effect on their pocketbooks.

The U.S. is at a "tipping point," with people beginning to factor energy use into everyday decisions, says Lee Schipper, who has studied energy consumption for decades, earlier for Royal Dutch Shell PLC and now as a visiting scholar at the University of California at Berkeley. But the driver isn't ecology, he says. "Sadly, it's economics. No pain, no gain."

The distinction between Americans' environmental and economic motives has important implications. It suggests that if energy prices fall again, as they did after the 1970s energy crisis, U.S. consumers might well return to sport-utility vehicles as fast as they are now trading down to smaller cars.

...

[WannaJumpMyScooter]

1. no, our economy IS energy use

that's the big picture no one sees

[OKIsItJustMe]

2. I disagree

If that were the case, then industries which use as much energy as possible to produce their (putative) products and/or services would be the most profitable.

Instead of trying to economize by saving energy (as smart companies have been doing for decades) they would be using energy as much as they could.

If you wish to say that our economy has come to rely on cheap energy, that's fine; but in my opinion you cannot say that our economy "is energy use."

[WannaJumpMyScooter]

3. uh, okay... remove energy from our economy

hell, just make a real 10% elimination of energy used

what do you think would happen?

[OKIsItJustMe]

4. As I said...

...

If you wish to say that our economy has come to rely on cheap energy, that's fine; but in my opinion you cannot say that our economy "is energy use."

In what fundamental way is our economy different from the economy of the 18th century American colonies? We're still making stuff, growing stuff, providing services, and selling all of it. The fundamental difference is that we've found easier ways to do these things, by using cheap energy.

So, for example, while there were delivery boys in the 18th century, back then, they walked; now the pizza guy drives a car. There were farmers in the 18th century. Back then they used lots of manual labor. Today, they tend to use tractors. etc. etc. etc.

Our economy is not energy use.

[GliderGuider]

6. The 18th century economy was just as dependent on energy as ours is.

The energy came in different forms, there was less of it, and it was used more efficiently, but some form of energy has underpinned every economy that has ever existed.

If the form or quantity of energy available to us were to change, our economy would change in shape and size, in lockstep with the energy changes.

[OKIsItJustMe]

8. I agree that our economy depends heavily on energy use

but that is different from saying that "our economy is energy use."

For example, how much energy is used by a musician. (It depends on the venue.) A musician may play on a street corner for passers by (who tend to be on foot) or in a subway station (for people riding in energy-intensive transportation systems) or in a natural amphitheater or in a climate-controlled, artificially lit concert hall.

A factory worker may use automated systems, or may work by hand. There tends to be greater profits involved in a factory which uses automated systems, so, in that sense, more energy use = greater profits. However, if that same production can be done using less energy, and the products sold for the same amount, there are greater profits.

One of the reasons why the US Steel industry lost out to the Japanese was that their newer, smaller factories used less energy.

[GliderGuider]

5. Improving energy intensity is a fact in many economies

However, the goal is still maximum economic output, and to a first approximation all economic output relies on energy. We squeeze more GDP from each BTU now than we did in the '60s, but energy is still the proxy for economic output.

[OKIsItJustMe]

9. I realize that's an article of faith for you

However I have yet to see it proven to my satisfaction. (As I write above) the Japanese steel industry was able to beat the US steel industry because their newer/smaller plants were more energy efficient than the US plants.

[losthills]

7. Flying a Kiwi to market in the US

produces 4 times it's weight in Carbon.

That fact does not seem to affect Kiwi sales in the US. Americans will stop buying Kiwis when they can no longer afford them....

[OKIsItJustMe]

10. Yes, one of the costs to the consumer is paying for the energy

and the energy today is cheap.

However, that doesn't mean that our economy today "is energy use."

Once again, looking back to the 18th century (and earlier) importing and exporting were significant portions of economies. Whether it was the importation of tobacco to Europe and tea to the colonies via ships or whether it was the spice and silk roads of antiquity, importation of goods from other lands has been a part of our life for much longer than we've been using fossil fuels.


(About mummies found in the deserts of China):
http://www.pbs.org/wgbh/nova/transcripts/2502chinamum.html

...

VICTOR MAIR: It's hard to believe it's 3,200 years old.

NARRATOR: Cowrie shells from the sea, not naturally found within thousands of miles of this vast desert, give up a crucial piece of the puzzle.

VICTOR MAIR: They must have been engaged in long distance trade, because we see in their graves sometimes things like cowries. They would have had to acquire such things from distant peoples.

...

[The2ndWheel]

11. How did those imports and exports get to where they were going?

By using energy. Everything we do is energy. We exist because of energy.

[OKIsItJustMe]

12. At this point, this discussion is getting silly

Yup, all of my metabolic processes use energy.

However, I believe the original proposition "our economy is energy use" dealt with other sorts of energy (like those derived from fossil fuels.)

[NickB79]

14. One could argue that much modern food is now fossil fuel energy

IIRC, there are 10 calories of fossil fuel input for every calorie of food calorie output grown using modern farming techniques.

But yes, that line of argument is starting to stretch out the original meaning of the debate.

[OKIsItJustMe]

16. I'm not far from "Amish country" here

There, they use a much larger percentage of animal power and people power than most farmers do.

They're still actually fairly productive.
http://cat.inist.fr/?aModele=afficheN&cpsidt=1040041
http://www.joe.org/joe/2007february/rb5.shtml

[The2ndWheel]

19. Obviously I'm missing why you object to it

What pre-18th century economy didn't use energy of some kind?

Japanese companies being more efficient with energy use means that individual Japanese steel companies used less energy, but it allowed the rest of Japan to use more energy in other ways. That's why efficiency doesn't save energy.

The more energy we make available for our use, the larger our economy. Our brains work in different ways I guess. Or I'm not very good at reading comprehension. I don't know what is wrong with the statement of "our economy is energy use". Is the problem what the defintion of "is" is?

[OKIsItJustMe]

21. Our economy can use less energy and still be our economy

One of the reasons our economy grew was we learned to harness energy other than our own. For example, grain can be ground using people power, or water power or steam power or electricity.

Profits will govern which method is used. With cheap energy, people are more willing to waste it (since with cheap energy, efficiency isn't always seen as "cost effective.")

The key to harnessing other forms of energy, was that it allowed lower labor costs.

However, more and more, businesses are recognizing that profits can be increased by increasing energy efficiency and/or using still other sources of energy (i.e. solar, wind, geothermal.)


Our economy uses energy, but that doesn't mean our "economy is energy use." To say that our economy "is energy use" implies (for example) that I could make money by going home and burning all of my trees. (Hey! I'm using energy! Right!?)

[NickB79]

23. "businesses are recognizing that profits can be increased"

"by increasing energy efficiency and/or using still other sources of energy (i.e. solar, wind, geothermal.)"

What do these businesses do with their greater profits, if not re-invest them and expand their businesses and the economy, thus using up MORE resources in the process?

[OKIsItJustMe]

24. Your response is based on the idea that our economy is all about trading stuff

Now, let's consider a little example.

Let's say I make a modest income, and can afford to take the family to McDonalds for supper on occasion.
OK, now, let's say I make more of an income, and can afford to go to a little family restaurant.
Great, let's say I make a lot of money. I can afford to go to Chez Fancy.

Now, how much more energy did I use by going to Chez Fancy than going to the family restaurant? Part of what I'm paying for at Chez Fancy is "the atmosphere."

http://usinfo.state.gov/products/pubs/economy-in-brief/page3.html

A Service Economy

Services produced by private industry accounted for 67.8 percent of U.S. gross domestic product in 2006, with real estate and financial services such as banking, insurance, and investment on top. Some other categories of services are wholesale and retail sales; transportation; health care; legal, scientific, and management services; education; arts; entertainment; recreation; hotels and other accommodation; restaurants, bars, and other food and beverage services.

Production of goods accounted for 19.8 percent of GDP: manufacturing—such as computers, autos, aircraft, machinery—12.1 percent; construction, 4.9 percent; oil and gas drilling and other mining, 1.9 percent; agriculture, less than 1 percent.

Federal, state, and local governments accounted for the rest—12.4 percent of GDP.

The most rapidly expanding sectors are financial services; professional, scientific, and technical services; durable goods manufacturing, especially computers and electronic products; real estate; and health care.

...

Okay, let's look at another example.

I make a modest income. I'm driving a 20 year old pickup. It eats oil and gas, but I can't afford a new vehicle right now, and I need my pickup.
I make more of an income. I can afford to get myself a nice new Prius. Oh! and I still have a pickup I use when I need to.

(Whoops! Now, because I have more money, I can afford to use less energy!?) What am I missing here?

[NickB79]

31. But individuals are not businesses

Your examples are of individuals or families gaining increased income, while the line I quoted was referring to business profits rising.

From your first example, for example, Chez Fancy will be making more profits from more well-off consumers coming in instead of eating at the local diner. What does Chez Fancy do with those profits? Does it expand and build another location in the neighboring city?

[OKIsItJustMe]

37. Businesses are people (and I'm not talking about the personhood of corporations)

We lose sight of this sometimes.

The profits from a business go into the pockets of the business' owners (including shareholders.)


In any case, where might a business' money go other than in purchasing stuff? Oh, I don't know, they could be like Google, and invest some of their profits in general renewable energy research, or providing Chez Fancy for their employees. (It's not all about energy use folks. Most of our economy isn't.)

Let's go back to Chez Fancy for a moment. Our regular waiter in Chez Fancy used to wait on us at the "Family Restaurant" down the block. He's not using any more energy waiting on our table at Chez Fancy, but he's getting more money.

This in turn means that he can go to Chez Tres Fancy downtown. There, he orders Cristal (OK, so I guess I'm too good a tipper, but my newfound wealth has gone to my head.) Now, his Cristal really didn't take much more energy to produce than my bottle of White Star, and my bottle of White Star really didn't take much more energy to produce than the bottle of Freixenet I have in the fridge at home. (See what I'm getting at?)

[GliderGuider]

25. Can an economy use *no* energy?

We could drop back to using animal, human, wind, water and wood energy, and we'd still have an economy albeit a much smaller one. But going all the way back to no energy would result in no economy. So from that perspective, the economy is predicated on the energy supply, and in that sense "is" energy. Actually, technically it's emergy or energy that's doing useful work, which negates your example of just burning all your trees -- there is no resulting emergy.

[OKIsItJustMe]

26. What if the economy produces all of the energy it uses? Does that count as using no energy?

Take the example of solar energy or geothermal energy.

[GliderGuider]

27. No.

Why do you think it would? Energy is energy. It has to be captured, concentrated and moved around somehow. The cost of producing usable energy, whether measured in dollars or energy (as in EROEI) is non-zero. Then that energy is used to do useful(?) economic things.

There seems to be something about your thinking that I'm not getting.

[OKIsItJustMe]

28. Okay, look at it my way for a moment

In the case of fossil fuels, we're taking energy in from outside of the system. (This is part of the reason why we have this "global warming" thingy. Fossil fuel usage produces carbon that wouldn't otherwise have been part of the carbon cycle.)


Solar energy already is part of the system. Take sun beams falling on the desert. They're absorbed by the sand, producing heat. Much of that heat escapes into space.

Okay, let's take that sand, and make some silicon solar cells. The sun falls on them, producing some electricity, but mostly heat. The electricity is eventually used, in the end, producing (yup) heat.

However, the books are closer to balanced.

(Oh, and yes, you can bootstrap solar power.)

[GliderGuider]

30. Yes, I get that part.

It's the part where you seem to be arguing that you can have an economy that's not based on energy that has me puzzled.

I agree that you can have some portion of your economic activity that doesn't require (much) energy directly, for example the performing arts, but at some point you have to make the bricks to build the buildings to house the artists, right? You can do that with energy stocks (like fossil fuels) or energy flows (like wind and solar) but you still need energy in some form.

[OKIsItJustMe]

36. An economy is not based on energy usage

Energy usage can go up or down without a corresponding increase or decrease in the economy. Arguing otherwise is the conservative talking point, "Ah... you environmentalists all just want to destroy our economy/our modern way of life."

To say that "our economy is energy use" implies a direct correlation.


Okay, I'll try another take at this. Much of our "energy use" has to do with using stored energy. (i.e. there's a finite amount of energy that we can dig up or pump out of the ground. When we use it, it's gone.) Solar energy is not exhaustible (well, not for a really, really long time...) and our use of it does not deplete it.

[The2ndWheel]

32. "Much of that heat escapes into space"

And if we get better at harnessing that energy...

"Fossil fuel usage produces carbon that wouldn't otherwise have been part of the carbon cycle"

What happens when we produce energy that would otherwise have escaped into space?

[OKIsItJustMe]

35. You mean like solar

The heat still escapes into space. (Unless we have sufficient GHG's to retain it.)

[The2ndWheel]

40. But we don't want that heat to escape

Isn't that the point of increasing the efficiency of the technology?

[OKIsItJustMe]

41. You misunderstand

Eventually, all energy becomes heat.

So, the Sun can shine on the desert sand, and create heat, or we can catch a bit of that energy to use as electricity, but once we use that electricity, it becomes heat. (Either way it all becomes heat eventually.)

(See "http://en.wikipedia.org/wiki/Heat_death_of_the_universe">heat death of the universe" and "http://en.wikipedia.org/wiki/Laws_of_thermodynamics">laws of thermodynamics.")

[The2ndWheel]

42. Yeah, that's why I don't think there is a technological solution to our problems

[OKIsItJustMe]

43. Once again, I fear you misunderstand.

Forget about the desert for a moment.

Today, the Sun is beating down upon my roof, heating my attic. Okay, so how about if we install some solar panels there instead?

No energy is being created here. (See the "http://en.wikipedia.org/wiki/Laws_of_thermodynamics#First_law">first law of thermodynamics.")

However, instead of heating my attic, I'm going to borrow some of that energy, and convert it into electricity to run my computer. When I run my computer, it will give off heat.

(Once again) I'm not creating any more energy here. I'm just harnessing those photons before they heat up my attic. The same amount of energy is striking my roof, regardless. I may be capturing a bit more of it (which might have been reflected off the white shingles) but it's really not that big a deal.


Now, compare this to burning some coal to generate heat, to run a steam turbine, to generate electricity. Here, much more heat is generated, and a whole bunch of CO₂ to boot!


We're not heating the planet up by our energy use per se. We're heating it up by providing a better insulating blanket of CO₂; preventing heat from escaping into space.

[The2ndWheel]

29. Ahhhh, alright. Simply using energy does not an economy make

Understood.

[wtmusic]

13. Typical WSJ point of view

Interview a Shell exec about how effective the environmental movement has been and he says, "not very".

How predictable. :eyes:

[OKIsItJustMe]

15. Just because it's their typical POV doesn't necessarily mean that it's wrong

Read the postings on this board complaining about the price of gasoline. It's all about the money.

[wtmusic]

17. If it's "all about the money" why does anyone buy a Prius

which costs $5K more than comparable internal-combustion cars? They will never regain that money in fuel savings.

:shrug:

[OKIsItJustMe]

18. Assuming the price of gasoline never goes up, they might not save anything

Since the price of gasoline has been rising, the payback is more substantial.
http://stevecotler.com/tales/2008/05/22/gasoline-prices-prius-economics/

However, while people do buy Priuses for ecological reasons, most people do not buy them at all, for the very reason you gave.

My point was, when people complain about the price of gasoline (for them) it's all about the money.

[wtmusic]

20. When you want an objective appraisal of the environmental movement

do you ask one of their biggest adversaries? A rep for an industry more vulnerable to their activism than any other?

Laughable.

[OKIsItJustMe]

22. OK, great. Give me another source

Based on the people I talk to (many of whom think I'm a "tree hugger" i.e. a little nutty) the Wall Street Journal article is pretty accurate.

For example, I've heard the argument many times that a Prius won't save enough money to make it worth it. (To which I respond, well, there are other things to consider.)

[bananas]

34. The Prius does save enough money to make it worth it.

"Specifically, the sale price of a Prius is about $7,500 higher than a similarly-sized Chevrolet Cobalt, but the total cost of ownership over five years is almost $2,000 less - due primarily to its much lower fuel costs, although the amount of depreciation was a factor as well."
http://www.cnn.com/2008/LIVING/wayoflife/04/25/cost.ownership.cr/

"The long-standing myth about hybrids is that they cost more to own and struggle to justify their higher sticker prices," said James Bell, publisher and editor of IntelliChoice.com. "This is not true. In fact, half of the 24 hybrid models on the market in 2008 perform better than their non-hybrid counterparts in terms of overall cost to own. The bottom line is that hybrids are also a Smart economic choice and not just about 'going green' anymore."
http://www.intellichoice.com/press/hybrid_survey_2008

[OKIsItJustMe]

38. Just to be the "Devil's advocate" for a moment...

The "typical American" tends to borrow money to buy a car. A more expensive car means more paid in the form of interest over the life of the loan (which in many cases closely corresponds to the life of the car.)

[bananas]

44. I think that's included in those total cost of ownership analyses.

I don't have time to check,
but those analyses are pretty comprehensive.

[bananas]

33. The money is regained in total cost of ownership.

That's been established by Consumer Reports and others.

[kristopher]

39. The OP is absolutely correct

Our use of energy is principally a reflection of its scarcity or abundance, not our concerns about the external impacts of its use.

The harmful ecological effects have been long known, however meaningful behavior change only occurs with sustained, substantial price change. It is a typical example of the free rider effect.

[wtmusic]

45. Key word: "principally"

OP takes it a step (too) far:

"what is prompting Americans to rein in their fossil-fuel use isn't the effect of their consumption on the planet."

That is, in truth, a part of what is prompting Americans to rein in their fossil-fuel use.