SUMMARY INTRODUCTION   by Max Schulz ABOUT THE AUTHOR ENERGY & ENVIRONMENTAL MYTHS MYTH 1: The U.S. gets the largest share of its oil imports from the Middle East MYTH 2: The U.S. is rapidly running out of fossil fuels, but within ten years, we can replace them with alternative fuels and renewable energies MYTH 3: Moving toward renewable energies and away from fossil fuels will likely increase national employment levels MYTH 4: Conservation and efficiency gains alone can meet our future energy needs MYTH 5: U.S. forests and landfill space are shrinking MYTH 6: Our air is becoming more polluted MYTH 7: Nuclear power is unsafe MYTH 8: Offshore oil drilling has often caused significant environmental damage MYTH 9: The Earth is warming at a steady rate MYTH 10: Humans are the main drivers of the greenhouse effect, which is likely to cause global warming POLICY IMPLICATIONS APPENDIX NOTES POLL RESULTS Manhattan Institute/Zogby Survey of Adults – Question Frequencies Manhattan Institute/Zogby Survey of Adults – Question X-tabs

 

Many believe that one way to lower our nation’s energy demand is to increase energy efficiency. However, history reveals a paradox: the more efficiently we use energy, the more energy we end up using.

In The Bottomless Well, Peter Huber and Mark Mills explain this efficiency conundrum: “Efficiency fails to curb demand because it lets more people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains.”[62] Ironically, they write, “efficiency increases consumption. It makes what we ultimately consume cheaper, and lower price almost always increases consumption. To curb energy consumption, you have to lower efficiency, not raise it.”[63] In terms of the amount of energy consumed to produce a (constant) dollar’s worth of gross domestic product, the United States’ energy efficiency improved 49 percent between 1949 and 2000, according to the EIA. However, during the same period, U.S. energy consumption increased a whopping 208 percent.[64]

That over two-thirds (67.6 percent) of respondents believe that the U.S. can meet future energy needs via conservation and efficiency gains is understandable, considering the massive amount of U.S. energy consumption, both cumulative and per capita. It’s reasonable to assume that, if we can just find more efficient ways to produce and use energy, we can lower our overall consumption; yet for this to be true—for efficiency gains to produce a decrease in overall consumption—energy demand must be flat.

However, energy use is not static. In fact, it grows every year and is projected to continue growing. Efficiency gains may result in slight energy-use reductions at the margins, but they cannot control or curtail bulk energy demands. Like efficiency gains, personal conservation—such as turning off the light when you leave a room or not running your air conditioner twenty-four hours a day—may result in slight energy-use reductions but will not make a huge dent in overall energy consumption. As our population continues to grow, this will only become more true.

The EIA projects global energy consumption to increase 50 percent from 2005 to 2030[65] and U.S. energy use to increase 11.2 percent from 2007 to 2030.[66] Pennsylvania State University professor Frank Clemente says that, in order to meet energy demand in 2030, the U.S. will need all of the following power increases:[67]

• Nuclear power production: 38 percent
• Oil production: 43 percent
• Renewable energy production: 61 percent
• Natural gas production: 64 percent
• Coal production: 74 percent

The main sources of our total energy consumption are not well understood. Over half (52.6 percent) of respondents chose driving and transportation as the main uses of energy in the United States. They’re wrong: the industrial sector[68] is the largest end user of energy. Of the 101.6 quadrillion British thermal units (quads) of energy consumed in the U.S. in 2007, the industrial sector consumed 32.32 quads (31.81 percent), while the commercial,[69] residential,[70] and transportation[71] sectors consumed 18.43 quads (18.14 percent), 21.75 quads (21.41 percent), and 29.1 quads (28.64 percent), respectively.[72]

However, these figures give a misleading impression of how and why we use energy. Moreover, the sector breakdowns do not compare apples with apples, so they are not particularly instructive. For example, industrial activities could include transportation in and around factories, so the lines separating the sectors are not clear-cut. A much simpler way to express and understand the breakdown in our nation’s energy usage is to break down energy usage into three categories: electricity, raw heat, and transportation. Of the 100 or so quads of fuel we use annually, roughly 40 quads generate electricity, 30 quads generate raw heat, and 30 quads move vehicles. Energy consumption is, therefore, not dominated by driving or any other single activity or sector but rather is spread fairly evenly across the whole range of economic activity, none of which is immune to the efficiency paradox.

As our population grows (and with it, our energy needs), as emerging economies like China and India feverishly build infrastructure for the future, and as the global economy attempts to rebound, the need for energy sources that can meet bulk energy demands will be more vital than ever. Increases in energy efficiency and personal conservation are welcome, but we should not expect them to deliver more than marginal benefits. Because energy consumption is not flat, putting all our eggs in the efficiency and conservation baskets will not adequately move us forward.

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