Tuesday, April 15, 2014

A Tough Sell

Conservation: Good for everyone but the energy sector

This is a short post – not because I don't have an opinion but because I don't have an answer.

The United States needs an energy policy that has, as its first component, resource conservation. Why? Because conservation:
  • Saves money from lower fuel expenditure
  • Saves money as lower demand reduces fuel prices
  • Pollutes less which reduces health care expenditures
  • Lowers the cost of environmental regulation and compliance
  • Leaves domestic resources for future generations

So where's the problem? Well, conservation means that companies that rely on the sale and transmission of energy resources sell less. And that's bad for business.

The economics student in me argues that reduced expenditures by energy consumers leaves money that can be spent to grow other aspects of the economy. But that spending is diffuse and without a single business interest or constituency. What businesses are affected by conservation?
  • Oil and gas exploration and extraction
  • Pipeline and transportation
  • Power generation
  • Power and fuel distribution
  • Retail fuel sellers
  • Farming and ethanol production

The problem with plentiful energy is that there's little impetus to conserve. Instead lots of people – for business and political reason – wave the "jobs now" banner, encouraging consumption. Again, I don't have an answer. I only hope that for all the benefits of energy conservation, we can get past the immediate satiation of energy expediency.