Lovins: U.S. energy policy better off without Congress
August 22, 2005
U.S. energy policy is a disaster waiting to happen, thanks to “stupid federal interventions,” said energy guru Amory Lovins of the Rocky Mountain Institute.Lovins told a near-capacity crowd at Paepcke Auditorium last night that factors are starting to jell like they did in the late 1970s and early ’80s – and that’s not a good thing.Huge subsidies by President Reagan in the early 1980s, coupled with energy efficiency advances partially fostered by former President Carter in the late 1970s, led to a glut of energy supply, plummeting prices and bankrupt energy suppliers.Now he’s predicting another “energy fiasco.” Lovins didn’t predict lower gas prices, unfortunately. Instead, he claimed misguided government steps are preventing the free market from solving our energy woes.His favorite target while explaining misplaced policy was the nuclear power industry. The energy bill President Bush promoted and Congress approved earlier this month heaps additional subsidies on an industry that has proven to be a “loser” over the past 25 years. Nuclear power “died from an incurable attack of market forces,” Lovins said. Other energy sources are cheaper to deliver, and efforts to increase efficiency are also less costly.
Therefore, he said, heaping more money on nuclear power in the hope of attracting private capital is a strategy that will ultimately fail – when the subsidies become too great to bear. That will come sooner rather than later, despite congressional action, according to Lovins. He said nuclear plants’ production of electricity worldwide will fall within a few years as old plants reach the end of their 40-year-or-so lives.The problem for the United States, Lovins explained, is it will have poured money into a failed solution. Funds should be going into boosting the energy efficiency of vehicles and developing alternative technologies like wind power.He warned that China appears destined to achieve its goal of leapfrogging past the United States in development of energy-related technology. Its leaders have realized that the country’s rapid industrialization is cheaper with an energy policy that promotes efficiency and multiple sources.”They are the emerging energy leader. We’re not,” Lovins said.Inexpensive and highly efficient Chinese cars will hit the U.S. market in about three years, according to Lovins. A “well-placed source in Detroit” told Lovins that super-efficient Chinese cars will be widespread sellers at Wal-Mart in about a decade. The predictions should alarm the big three U.S. automakers – General Motors, Ford and Chrysler.”Some people think the Big Three are going broke, it’s just a question of what order,” Lovins said.
America appears unable, or unwilling, to fight its addiction to oil. Part of the problem is fossil fuel extraction is subsidized to a greater degree than alternative energy technologies, Lovins said. He wants to see a level playing field that offers equal subsidies for all energy sources or, better yet, none at all. In that case, development of wind power would soar in the United States as it has in several places around the world.Getting Americans off oil doesn’t have to be painful.Lovins said vehicles gobble 70 percent of the oil that the United States consumes. If all vehicles were only as efficient in 2025 as hybrids like the Toyota Prius are today, it would save about one-sixth of the estimated use. But savings well beyond that are possible by investing in the creation of lighter vehicles that don’t compromise safety.Lovins said a $90 billion investment is needed to retool the car and aircraft industries to be competitive in the world market while decreasing the country’s dependence on foreign oil. Another $90 billion investment is necessary to create a biofuels industry that produces ethanol from woody plants rather than corn, he said.Those investments would result in a savings of $133 billion annually from reduced oil use, he predicted.
Lovins and an RMI team produced a comprehensive plan for reducing dependence on oil in a study called “Winning the Oil Endgame: Innovation for Profits, Jobs, and Security.” It is available online at http://www.oilendgame.com.Lovins left no doubt in his presentation that he feels the United States can be a leader in energy efficiency and alternative energy sources. But he raised significant doubt about whether the U.S. government will get out of the way and let it happen without painful incentives.Scott Condon’s e-mail address is email@example.com