* Graphic courtesy of Elk River Public Utility District

To date, federal energy efficiency policies have been crafted with the implicit assumption that reducing energy use at the point of use automatically reduces total energy used and the requisite pollution. This fails to consider how primary energy and electricity are produced and the effects of moving energy over long distances. The energy use definition in the Energy Conservation Policy Act of 1975 runs counter to federal government efforts to reduce greenhouse gases and other air pollutants such as SOX, NOX and particulate matter.

The U.S. Government has consistently supported the most efficient use of our natural resources. During the current shortage of natural gas, it has become increasingly important for policymakers to look at the full fuel cycle to find out if we are using our natural resources most efficiently. If there is any question, then we must begin to look at the full fuel cycle when measuring energy usage: consider energy use from the point of extraction, whether fossil fuels from the earth or otherwise, in a continuum through their ultimate usage. The above language clearly states the intent that energy use and efficiency policy shall look at energy resources holistically.

Currently, the way we measure the efficiency of consumer products such as appliances and homes (codes and standards issues) is based on examining products that run on different fuels independently from one another. Products powered by electricity are evaluated differently from natural gas-consuming products. These codes and standards and evaluation criteria force us to consider gas that is used in a power plant and turned into electricity differently from natural gas that is used directly in industrial, commercial and residential applications. If future energy policy is to optimize natural gas usage, and in fact, all natural resource usage, we must decouple supply and demand and truly consider full fuel cycle of delivered energy.

Changing the way we measure, use and account for energy will have significant, and positive, implications. These include:

1) America will use its natural resources more efficiently. We should begin measuring the full fuel cycle of energy, thereby considering all primary energy and other uses, whether that energy is, at any point, carried by electricity or not.
2) Resource energy accounting is the only way to connect the use of energy to environmental consequences. If we consider equipment separately from the “source-based” energy that fuels it, then we cannot account for the environmental consequences of that equipment. For example, an energy efficient clothes dryer that runs on electricity from a coal fired power plant has a very different emissions profile than one that runs on electricity generated at a hydroelectric plant, which also has a very different profile from one that runs on natural gas directly.
3) Resource-based energy efficiency will allow consumers to evaluate energy use choices based on cost, resource usage, and emissions attached to those choices.
4) Policies that encourage the best overall use of our natural resources can help utilities address line losses and grid congestion during peak demand for electrical energy, particularly during the summer months.
5) A resource based accounting of energy efficiency will spur investments in new technologies that are efficient on a full fuel cycle basis. This is counter to our current inclination to squeeze small amounts of efficiency out of technologies as measured at the point of usage.