Book Notes: Why Energy Conservation Fails

Notes on Why Energy Conservation Fails
Herbert Inhaber, 1997
Read January-February 2007

The main point of this book is that government programs to foster energy conservation fail to work at the national level, and should be discontinued.

I’m glad I read the book, but I didn’t really like it – the tone is smarmy and the author clearly has an axe to grind, which potentially undermines whatever persuasiveness he was trying to effect. So I don’t trust him, but some of the arguments are correct, and the book as a whole was worth thinking through and understanding. I would have preferred reading a more balanced and considered approach, but this was one of the few books in the library I saw written with an economic slant to energy conservation, so I thought I’d give it a whirl.

The book doesn’t have much structure per se. Each chapter represents some line of attack against energy conservation efforts. Some chapters are more coherent and strongly argued than others, giving the book the overall feeling of “let’s throw slop against the wall and see what sticks.” On the plus side, I didn’t feel the need to linger on the chapters with weak arguments, so I went through the book pretty quickly.

The book begins with the observation that although it’s certainly possible to improve the energy efficiency of a given device or process, that doesn’t necessarily reduce national or even personal energy consumption. In fact, an arbitrary program of spot conservation can actually end up increasing overall consumption, much as an ill-conceived diet can end up causing you to gain weight. Much of the book is spent elucidating ways this can happen.

A good part of the book is spent arguing that energy is becoming cheaper and more plentiful, so there is no reason to apply conservation at all. Inhaber provides two telling charts:

1. The graph of the number of gallons that were purchasable by the average personal income, from 1950 – 1994. The trend is steadily increasing until the early 70’s, when it starts bouncing around, dipping by 40% off the peak in the early 80’s, and then rising steeply since. The value in 1994 (16,000 gallons) is 60% higher than in the previous peak year of 1972 (10,500 gallons).
2. Even more striking is the graph of the number of miles that you can drive on the average personal income, given a car that met the average mpg figure for that year. Here you’re combining the increase in income with the increase in mileage. So the pattern is similar, but the dip in the late 70’s is only about 20%, and the end value in 1994 is 150% larger than the peak in 1973. Inhaber concludes that the golden age of driving is now.

It would be interesting to bring the charts up to date, given the steeper gas prices of 2005-2006. But such statistics really do need to be reconciled by anyone claiming that we’re running out of oil.

So far so good, but now the wheels start to come off. Inhaber follows this up with a chart showing how average mpg tracks with percentage of oil imports. Average mpg increased steadily from the 70’s to the mid-90’s, but it didn’t seem to have much impact on the percentage of oil that we have to import. So, therefore, increasing mpg didn’t do us much good, so why bother.

Which is a bizarre argument. Reducing oil imports is a good thing, but there are other factors in that equation, namely, the fact that U.S. production has declined significantly over the last twenty years. If you want to argue that mileage doesn’t affect overall energy consumption, shouldn’t you track mileage and ummm, gasoline or energy consumption? That would be logical, but Inhaber doesn’t do that, probably because, ummm, the facts don’t exactly fit his theory. Here’s a great site for overall U.S. energy trends: http://www.eia.doe.gov/emeu/aer/ep/ep_frame.html. You can see that overall petroleum consumption (Figure 5) dropped sharply in the late 70’s, and we didn’t reach that peak again until 1999, when the country’s population was much larger (raw data here: http://www.eia.doe.gov/emeu/aer/txt/ptb0103.html).

And indeed, these charts partially undermine the whole book. Take Figure 2, which shows that energy consumption per-capita peaked in 1978-9, dropped immediately thereafter, and has been fairly constant since, currently running about 7% below the peak. This contradicts claims throughout the book that conservation (or efficiency improvements, or whatever you want to call it) does not affect overall consumption.

My main point here is that Inhaber, shall we say, chooses his data selectively. It’s just hard to trust him.

Anyways, here are the parts that I liked:

· Discussion of Stanley Jevons, the 19^th century English economist, who pointed out that increasing efficiency can increase overall resource consumption. The example given is that of steam engines. The early ones were colossally inefficient, and for that and other reasons, were not used widely, and therefore used only a small amount of coal in the aggregate. Then Watt came along with a much more efficient engine, which was economically viable, and therefore was used in hugely greater numbers, which therefore consumed a larger amount of coal. (It should be noted that Jevons is a somewhat odd role model for Inhaber to use, as Jevons’ main concern was the potential of England running out of coal.)

· Two other examples of bounce-back effects:

o Conserving energy increases its supply, which reduces the price, and therefore increases the demand for it.

o When you make efforts to conserve energy in some areas, you often feel like you can now relax in other areas, because “you’ve earned it”. This can wipe out the original savings. Note the analogy with dieting.

· And my favorite: studies show that when some people look at conserving household electricity usage, they realize just how cheap it is, and understand that it’s no big deal to use even more. I’m down with that; once you know that burning a 60-watt bulb for fifteen minutes costs you .15 cents out of pocket, you’re not exactly motivated to follow your toddler around the house shutting off the lights after her.

I do like the analogies with dieting and a similar sort of endeavor, budgeting and saving money. I’ve personally had similar experiences there for some of these points.

But note that these are all qualitative arguments. Buying a more efficient refrigerator will certainly save energy, which you might use in other ways … but you might not. On that note, check out Figure 30 on the DOE web page cited above. Average annual fuel consumption per vehicle is down, significantly so for cars (see the underlying stats), since the 70’s. This doesn’t contradict Inhaber outright – maybe people are buying more cars since mileage is so good – but it doesn’t help either.

Interesting – my initial impression of the book wasn’t that bad, but I’m really turning against it as I wrote up my notes and am looking at other data. Which is funny, because I’m at least somewhat sympathetic to some of the economic arguments against government intervention:

• Energy is historically cheap, so why do we need to conserve at all, for reasons other than ordinary economy/cost-saving?
• Let the free market determine how best to conserve. Want people to use less energy? Tax the price.

Good points that need to be answered, I’d say. Too bad this book is so slanted, and written with such an obnoxious tone, that you need to summon all your objectivity to take it seriously.