EU/G8 Energy Efficiency Conference: Political Strategies, Concepts and Goals for Energy Efficiency in the USA (April 20, 2007)

EU/G8 Energy Efficiency Conference: Political Strategies, Concepts and Goals for Energy Efficiency in the USA
Ambassador William R. Timken, Jr.

Berlin, April 20, 2007

As prepared for delivery.

The world currently faces a set of serious energy challenges. The decisions we make now regarding our energy supply and demand can either help us deal with these challenges more effectively or complicate our ability to secure a more stable, economical energy future. Discussions at the EU and G8 levels set the tone. But the solutions cannot just come from policy-makers – whether they sit in Washington, Berlin, Brussels, or any other national or state capital. Governments can only make real progress toward greater energy security by working in partnership with industry and consumers to encourage better use of energy resources.

Since President Bush took office, the U.S. has invested nearly $29 billion in international partnerships, the development of clean energy technologies, and in climate science. These government efforts feed the strong momentum in the private sector toward alternative energy technologies. The focus must continue to be on developing and deploying solutions that are technically and economically sound.

The biggest source of immediately available “new” energy is the energy that we waste every day. That’s why we are continuing efforts to further improve America’s energy efficiency. Energy efficiency means doing more with less. Bringing more energy efficiency into the energy mix can slow demand in a wise, cost-effective manner, balancing energy efficiency with both conventional and new generation supply options.

The United States reduced energy intensity by about 2% per year between 1975 and 2000. Since the late 1990’s, we are talking about a reduction of over 2.5%. Energy intensity, of course, may mask structural changes that do not represent "true" efficiency improvements. If, however, only half of the reduction in energy intensity can be attributed to efficiency improvement — a conservative assumption, I think — then efficiency resources have powered 1% annual economic growth for the last 30 years with zero emissions.

I would like to mention a few of the strategies that have worked for us in the United States and what we are doing to improve our results.

Vehicle energy use accounts for more than 30% of U.S. CO2 emissions. The Corporate Average Fuel Economy (CAFE) standards for cars and light trucks, helped raise fleet efficiency by two-thirds from 1975 to 1990. The introduction of hybrid vehicles and progress in reducing weight and aerodynamic drag in cars, trucks, and aircraft has stimulated new progress in vehicle efficiency. At the same time, various states have introduced new policies that make a switch to energy efficient vehicles attractive to consumers.

Building energy use accounts for about 40% of U.S. CO2 emissions. Strategies for improving energy efficiency in buildings include efficient heating, cooling, lighting, and systems and more energy-efficient building shells.

A technology as simple as a high-efficiency lamp can have an enormous effect on fuel use. According to the U.S. Environmental Protection Agency, if each American household replaced one regular bulb with a compact fluorescent, the energy saved would be enough to light seven million homes. The greenhouse-gas reductions from power plants would be equivalent to taking one million cars off the road. But lighting is only the start of where consumers can impact energy use. Household appliance standards led to a 75% reduction in energy use in new refrigerators between 1975 and 2000, and significant improvements in other appliances. Industry partnership programs such as the U.S. Environmental Protection Agency’s Energy Star programs have accelerated the transformation of product markets to more efficient models. The Department of Energy is currently moving forward on new efficiency standards for appliances and electrical equipment.

Industry currently accounts for almost 30% of U.S. CO2 emissions. Industry also has a major role to play in energy efficiency. As a former businessman, I can well remember the effect the energy crises of the 1970s had on our bottom line. Industry made a concerted effort to lower energy usage through increasing our energy efficiency. We succeeded. Consumers followed suit. Now we face the prospect of long term outlook for oil above $50 a barrel. We see industry adapting in similar ways to cut costs as they did in the 1970s.

Whether it is to reduce energy prices, protect the environment, or supply the products customers demand, regulators, utilities, and others have been showing more and more interest in energy efficiency. For that reason, the U.S. Department of Energy and Environmental Protection Agency launched a National Action Plan for Energy Efficiency in 2005. They have brought together people and organizations that already have a track record in promoting and adopting energy efficiency to make sure that our commitment to to energy efficiency as a resource is backed up by sound, cost-effective strategies.

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