I’ve spent a lot of the last four years of my life talking about energy with all kinds of people. For the purposes of this post, I’ll divide those people into two big groups: “energy insiders”, and “regular people.”
Energy insiders are scientists, engineers, policy makers, investors, journalists, etc. who’ve spent some time thinking about energy in one form or another. In these conversations, energy data, and being precise about that data, is very important. This data comes in the form of watts, watt-hours, therms, cubic feet, gallons, joules, BTUs etc. Sometimes these units are converted back and forth, but the conversation always includes at least one of them.
Energy insiders have an intuitive feel for these units. They can tell you how many kWh you might get out of a portable generator per gallon of gasoline; they can guess the ballpark range of natural gas therms the average three bedroom home in Chicago might use in January; they know if an 8 kW solar electric system seems too big, too small, or just right for a particular home; in other words, like all “insiders”, they have a “feel for the numbers.”
The Language of Energy
Here’s the problem: regular people don’t have any feel for the numbers. I mean, like zero feel. But in almost all cases, energy insiders use their “insider” units to talk to regular people.
Regular people have an intuitive feel for one, maybe two, units. The one they all understand is dollars. Your average person on the street will likely be able to tell you if $200/month seems low, high, or about right for their monthly utility bill. They may have a sense for how many gallons of gas they use in their car (the second unit), but more likely they’ll only know roughly what it costs to fill the tank.
Weight Watchers(TM) understood this. They knew that calories were the precise and scientifically accurate units to use when discussing weight loss, but they knew that regular people had (and still have) zero feel for calories. And since dollars aren’t a good proxy for calories, they invented their own units (their “points” system). They designed it such that regular people could easily get a “feel” for the balance between calories ingested versus calories burned. Funny thing is, it worked.
We energy insiders can argue amongst ourselves all we want in watts or joules or whatever, but until we realize that unless we speak to regular people in a unit they have a feel for (i.e. dollars) we might as well be talking to a wall.
Using the right energy language is also an issue in a larger, more macroeconomic, context.
The Language of Energy Policy
As important as communicating with individuals is, the energy policy discussions that happen at the state and national levels are probably even more important. In policy discussions, the problem isn’t just that we’re talking kilowatts instead of dollars, but that economics are often completely absent.
Worse, when economics are included, they are frequently used to incite fear, uncertainty and doubt. In the extreme form, the discussion degenerates into childish name calling and scare tactics (e.g. “radical environmentalists hell bent on destroying the American economy”). The fact that such extreme views receive any traction at all is a testament to the lack of a “stable base” to construct a meaningful dialog.
The “instability” of the energy policy discussion in this country has major implications. For decades, U.S. energy policy has predictably and embarrassingly lurched forward and backward like a limp flag fluttering in the economic wind. When energy prices rise, enough political capital accumulates and renewable energy/energy efficiency achieves government support (incentives, credits, subsidies, R&D grants, etc.), only to disappear when the economic outlook turns grim and energy prices recede. The appearance, disappearance, and reappearance of the White House solar panels are visual evidence of this phenomenon.
Recently the Chamber of Commerce’s Karen Harbert called for an “adult and unemotional” conversation about energy costs. Not surprisingly, the reason for this call is that the Chamber questions the “types of monies that were spent in the stimulus package on very high-cost energy sources” “in light of the country’s economic troubles.”
While I’m sure I’d disagree with Ms. Harbert on many things, I completely embrace her call for that “adult and unemotional” conversation on energy costs. Bringing economics and economists into the discussion won’t always be smooth sailing, but I think the following framework is something many sides could agree on to help keep the language “adult and unemotional:”
- Any cost accounting should include both initial, as well as total life cycle costs, over some appropriate time horizon.
- Everyone should agree on the appropriate time horizon.
- All parties should be rigorously inclusive of all costs (i.e. subsidies should be accounted for on all sides, and no unpriced “externalities” are allowed).
- Both payers and beneficiaries should be clearly identified (e.g. individuals, corporations, society).
- The cost of “doing nothing” is just as important to measure as the “doing somethings.”
One great thing about our country’s expertise in business is that we have an amazing set of skills in cost accounting. It’s time these formidable skills were applied to energy discussions as rigorously as they might be when discussing health care or replacing the Air Force’s aging tanker fleet.
I’m no Pollyanna; I don’t think that just adopting a more “cost based” approach to energy discussions will magically make our disagreements go away. Intelligent people can take the same economic data and draw different policy conclusions. Still others aren’t actually interested in a true conversation, but only seek to muddy the waters in order to protect the status quo.
But even so, if we strive to always clearly present the underlying economics of energy policy choices, and to challenge others to do likewise, in the worst case we will be able to “out” those whose only goal is to use language to sow fear uncertainty and doubt, and in the best case, we may actually be able to build a stable base on which to find common ground with other “unemotional adults.”
The ideas behind these two posts were informed and much improved by discussions with Diane Loviglio, Jonathan Koomey, Severin Borenstein, and Saul Griffith. While none of them should be blamed for anything dumb that I say here, nor should it be assumed they agree with anything I say, but that said, any credit for the smart stuff is likely due to their valuable insights.
For more research, check out GigaOM Pro (subscription required):
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- The Real Reason Google Is Buying Wind Power
- An Assessment of the Lighting Controls Market
Image courtesy of @boetter.