Energy And Security

New efficiency technologies could be the key to both

One of the articles in The Next Agenda (IC#19)
Originally published in Autumn 1988 on page 14
Copyright (c)1988, 1997 by Context Institute

I don’t know anyone who has uncovered more of the enormous practical potential of the next agenda than Amory Lovins and his co-workers at Rocky Mountain Institute (RMI) (Drawer 248, Old Snowmass, CO 81654). What they have found gives cause for great hope, and it also leaves me wondering: How long are we going to allow the incredible stupidity of present energy and security policies to continue?

Robert: In our issue on "Sustainable Habitat" (IN CONTEXT #14), we talked about RMI’s energy and economic renewal programs. Are there other areas that you’ve been working on?

Amory: Yes – RMI also has research programs dealing with water, sustainable agriculture, and security. The water program is preparing a comprehensive water savers’ handbook, which is a tool kit on how much it’s worth to save water, what hardware is available for using water more productively, how much water that hardware can save at what cost, and how that savings can be realized in practice.

The agriculture program is aimed at fostering a transition to agriculture that is sustainable economically, ecologically and culturally. We’ve been doing research, for example, on the economic success of, and means of transition to, low input and organic farming – ways to add more value to local produce and to market it locally. We’re thinking of doing some work on new ways to reduce energy costs on the farm.

Robert: What about your work on security?

Amory: The security program has two parts and one purpose. The purpose is to formulate and bring into wide-spread use a fresh concept of what security is, where to get it, and who is responsible for it – an approach which does not rely on the threat or use of violence, which makes others more secure rather than less, and whose practice is the province of every citizen rather than the monopoly of national governments.

We’re looking for a pragmatic approach to being safe and feeling safe which works better and costs less. We are pursuing this on two levels. First we have a draft book we hope will be out around the end of the year called Reclaiming Security: Beyond the Controlled Arms Race, by Hal Harvey, Michael Schuman and Dan Arbess. The book lays out a systematic framework of how to build security from the bottom up through three synergistic means, namely conflict prevention, conflict resolution, and non-provocative defense. None of these is adequate by itself, but the combination of all three appears to be very attractive.

The second direction of our research goes into a lot of technical detail on how resource efficiency, initially in fuels and strategic minerals, can save or substitute for the resources which are now major causes of conflict, both actually and potentially. Military missions to get or keep access to foreign resources now account for about a quarter to a third of the US military budget. In all the cases we’ve looked at carefully so far, it’s much cheaper not to use those resources but to replace them with greater efficiency, or sometimes through substituting more abundant resources. We’ve been focusing, of course, on oil, and on four metals initially – cobalt, chromium, manganese, and the platinum group.

Robert: Isn’t South Africa one of the major providers of at least some of those four?

Amory: Yes. That’s mainly what’s been holding our foreign policy hostage in South Africa. We have an obligation both to promote peaceful change there and to preserve the basis of our own security. At RMI, we feel that sensible and cost-minimizing resource policies can do both simultaneously. In other words, our security is not at all inconsistent with justice for South Africans. We found it straightforward to save most of the cobalt now in use, for example, at quite low cost through a combination of measures – more efficient use, recycling, substitution, remanufacture, and doing differently some of the tasks that we do with cobalt. The same appears to be true of the other metals that we’ve examined.

Maybe the Persian Gulf example would be a bit clearer. In the U.S. we’ve lately been getting around 6% of our oil from the Persian Gulf. As of fiscal year 1985, the last good data we have, we were paying 18 times as much for our military force in the Gulf as we were for the oil itself, raising the total cost to this country to about $495.00 a barrel – surely the costliest oil in the world. And 90% of that oil, whose shipments we were paying about $50 billion dollars a year to protect and still are, is going not to us but to our economic competitors. So, to paraphrase a Wasserman cartoon, we’re paying money we don’t have, to protect ships we don’t own, hauling oil we don’t use, for allies who won’t pay much, in pursuit of a policy we haven’t figured out yet.

Now, if we were to take one year of that Persian Gulf military cost and put it into making our buildings more heat-tight, we would thereby eliminate our imports of Mid-East oil. Or if we improved the nation’s car fleet by 3 miles per gallon, we could also eliminate our imports of Gulf oil. The fleet is now at 18.3. Many manufacturers have developed prototypes ranging from 65 mpg to about twice that.

Robert: Up to 130 miles per gallon?

Amory: There’s a Renault 4-passenger prototype that tests at about 121 mpg using the weighted average of city and highway driving. There is a 5-passenger, comfortable, crash-worthy Volvo at 78 mpg which reportedly costs nothing extra to manufacture. There’s a 92 mpg Peugeot that also reportedly costs nothing extra to build. In fact, there are at least 8 manufacturers that have prototypes tested at above 67 mpg.

Robert: What other sorts of links are there between energy and security?

Amory: A second one is to provide affordable energy for development for all countries. Third is a need to develop energy systems that aren’t easy to disrupt. Fourth, we don’t want to make acid rain. Fifth, we don’t want to endanger the climate from carbon dioxide and global warming. Finally, we don’t want nuclear proliferation.

Now, if you think the only alternatives are in increased supply, then you’re stuck. You can use more coal, which makes CO2 and acid rain. You can use more uranium, which makes bombs. Or you can use more oil, which gets us back to the Persian Gulf. But energy efficiency solves all of those problems at once and saves so much money that if we took it seriously enough in this country, we could pay off the whole national debt by the year 2000.

Robert Ayres has a rather disquieting example from history. He points out that in the Victorian era, the Royal Navy projected British military power around the world to retain access to vital and indispensable raw materials such as indigo and natural rubber. Meanwhile, the more isolated German chemical industry was inventing synthetic dyes and rubber which replaced those products.

Today we are projecting military power around the world, in places like the Persian Gulf and southern Africa, to protect access to resources like oil, cobalt, and chromium – while the Swedes develop amorphous super steels, and we and the Japanese develop advanced composites and ceramics, and the Japanese develop cobalt free super magnets, and everybody develops oil-displacing efficiency technologies. In other words, a revolution in energy policy and material science is quietly making those supposedly strategic materials impotent and obsolete. Our research is trying to catch up with how it’s happening and how to help it happen faster.

Robert: You do such an excellent job of pointing out places where the "Emperor" has no clothes, and is, in fact, behaving in embarrassing and stupid ways. And yet the pace of even recognizing, much less implementing, what can be done with these sensible alternatives often seems very slow. What’s your sense of the bottlenecks?

Amory: Well, the first, recently, has been an administration that doesn’t seem able to do sums. When it rolled back car efficiency standards in an effort to give a billion-odd dollar gift to Ford & GM [General Motors] shareholders, by forgiving penalties for non-compliance with the standards passed in 1975, the practical effect was to cost the country more than 20 billion dollars a year and to double our 1985 level of imports from the Persian Gulf. In fact, the oil being wasted by that roll-back exactly equals the amount of oil the administration now hopes to be able to extract annually from the Arctic National Wild Life Refuge.

And it is not just the government. The energy industry could make more money selling efficiency than selling fuel, but much of the industry is not pursuing those business opportunities very creatively. There are notable exceptions, especially among electric companies and utilities; yet as a country we’ve been doing many things that are not only dumb, but counter-productive – that is, which achieve exactly the opposite of what we say we’re trying to do.

Robert: What kind of response are you getting in carrying this work to other places in the world?

Amory: We’ve had very good fortune recently in establishing about 8 lines of cooperation with senior Soviet policy makers and scholars to help promote the efficiency and security of both societies. The majority of this work is in new ways to save energy, especially electricity.

I think it’s important to understand the background of why our efforts to help in this way were greeted not simply with polite interest, but with rampant enthusiasm. In 1982 the Royal Dutch Shell group analyzed the Soviet economy in great detail, and essentially predicted what they called the "greening of Russia," probably under Gorbachev. We were very surprised and pleased to learn that the Institute for Systems Studies in Moscow had done an identical study, also in 1982, and come to the same conclusions. They both found that the most important single element in the success of the necessary perestroika would be energy efficiency. That’s because it has two benefits: it frees up domestic resources such as capital and technical skills for more productive investment in modernizing industry and agriculture, and at the same time it frees oil and gas for export to earn hard currency to buy technology for the same purpose.

Now the Soviet economy has aptly been called a machine for eating resources. Most commodities are priced at 1928 levels. There’s no effective regulatory substitute for this absent economic glasnost – that is, prices that tell the truth – and as a result, the country is about 3 times as energy intensive as Sweden, or two-thirds more energy intensive than even the United States. This is leading increasingly to a resource crunch as more accessible resources west of the Urals are depleted.

For major expansions of energy supplies, the Soviet Union has three alternatives which are palatable neither to them nor to anyone else. One would be to export less oil and gas (which are vital hard currency sources for them); or to extract more, which is very difficult; or even, if they could afford it, become an importer, thus putting more pressure on the Gulf and very much raising world prices now softened by Soviet exports. Another option is nuclear expansion which was over budget and ten years behind schedule even before Chernobyl. And since Chernobyl at least 3 or 4 nuclear plants under construction have been suspended as a result of both scientific and popular protest. The third option is very extensive burning of low grade coals from the eastern parts of the country, but many of those are of such low quality that no one even knows how to burn them. In recent years they’ve been mining more but getting less energy out of it because the grade declined faster than the tonnage rose.

Now, when you multiply the losses in a system which inefficiently transports and burns coal, then loses 20-30% of the electricity in very long transmission lines from remote parts of the country, and then uses the electricity extremely inefficiently, it’s clear that saving electricity has extraordinary environmental and capital leverage. Or, conversely, if that efficiency is not achieved, but the nation somehow manages to achieve part of the economic growth it’s hoping for, that could easily create a climatic disaster for everyone. So we feel it is urgent to share our information on advanced electricity saving techniques with the Soviets, and for that matter with other countries to which we are extending contacts, such as the People’s Republic of China, India and Brazil.

Robert: You were saying you found an enthusiastic response in the Soviet Union. Has that been at fairly high levels within the Soviet system?

Amory: Yes, chiefly through extensive contacts with Academician Ye. P. Velikhov, who is vice president of the Academy of Sciences and senior advisor to General Secretary Gorbachev. In fact on one trip to Moscow we brought with us a little suitcase containing sample devices of new technologies whose U.S. energy saving potential is equivalent to roughly 200 Chernobyl-size power stations, plus an Alaska pipeline. Velikhov was so excited about actually seeing these things that he had previously only heard about that he immediately arranged for us (together with two other Soviet energy leaders) to make a 40-minute film the next day, called The Energy Efficiency Revolution: A Key To Perestroika – and it was broadcast on nationwide television four times, because he wanted to get this message directly to the Soviet people rather than only to the bureaucracy. We’ve had a similar response talking to many other very senior scientists and government officials, to ordinary people, and to journalists. We’ve found an enormous hunger for information.

Of course, it’s not the intention of either side that the transfer of information be only in one direction. We’ve been seeking particular areas in which we know Soviet science and efficiency technology to be especially advanced. We’re swapping our research on cobalt for some similar Soviet work on phosphate as one of many lines of scholars exchange opened up recently. We’re working with a team of American and Soviet Georgian architects and designers on what we believe will be the first really energy efficient buildings in the Soviet Union, as part of a network of international children’s camps that Velikhov is eagerly participating in. We’re working with some of the leading Soviet energy analysts to prepare a joint book on new developments in energy efficiency and their relationship to security.

We’re also pursuing many other practical projects and forms of outreach, some related to particular policy issues such as global warming, in cooperation with the Natural Resources Defense Council. We have begun cooperation in a number of other spheres of resource efficiency and alternative security, and I only wish that we had the resources to pursue vigorously all of the very high leverage opportunities that have suddenly opened themselves.

Robert: Suppose there was an administration in this country that was as open to exploring these opportunities as what you have found currently in the Soviet Union. What are some of the possibilities for the next five years or the next decade?

Amory: I think we could do some extraordinary things together.

Robert: What might be on the list?

Amory: Well, I think first there would be serious attempts to make sure that each country has full access to the other’s best technologies for saving energy and other valuable commodities and to analytic and implementation methods – something this administration has actually done a lot to impede.

You might at first suppose that we have nothing to learn from each other in implementation, since they have a centrally planned economy and we have a market economy. But in fact, each is a mixture of both. I was very heartened to learn that this spring several central planners who recently left Gosplan [the central planning ministry for the USSR] set up in Moscow, under the new private enterprise law, a for-profit cooperative selling energy efficiency services. They report a brisk demand.

Even though prices are roughly a third of actual costs for energy, efficiency is also correspondingly low-priced, so the economics of saving energy are surprisingly similar. It may also, interestingly, be easier to do major overhauls on buildings and equipment in a centrally planned economy, because what you’ve already built is so standardized – there are only a few dozen types of light fixtures, for example, in significant use in the Soviet Union, whereas we have thousands of kinds. So the logistics may be easier there. We already have four American cities plus Stockholm, Sweden, seriously exploring mass retrofits of lighting systems – that’s one of the biggest and cheapest savings available.

Robert: Things like street lights?

Amory: No, inside lights. We’ve recently published a 348-page encyclopedia on how to save roughly 92% of US lighting energy and yet deliver the same amount of light, make the light more attractive and easier to see by, and save more money on lighting maintenance than the retrofit would cost – thus saving ourselves about $30 billion a year plus several hundred billion dollars worth of later replacement or expansion of generating capacity.

Robert: Another area where the emperor is a bit chilly!

Amory: Yes. I think there is also a great deal of room for very fruitful collaboration in other kinds of resource sustainability such as water and agriculture, and indeed in such simple matters as swapping germ plasma.

Robert: For seed banks and agricultural research?

Amory: Right. For example, the Land Institute [see IC issue #14, p.33] would love to get hold of certain strains of Siberian wild rye, and it would be happy to trade for appropriate prairie plants which might have advantages in Soviet agriculture. The channels to do this don’t yet exist, but they are developing. One member of our board of directors, who is also a director of Smith & Hawken Tool Company, was even asked to help organize a permanent traveling exhibition of sophisticated garden tools to be shown all over the Soviet Union – and when you remember what a large fraction of their fruits and vegetables are produced in private plots, often by methods which have a great deal of room for improvement, you can see how much this could improve ordinary people’s nutrition.

Robert: Right. Plus improve the whole economics of agriculture in that country.

Amory: And I think we also have a lot to learn from each other in ways that may not be immediately obvious. For example, they have some remarkably creative people working on the problem of how to help large organizations learn faster. We have similar people with similar concerns who, because of their different cultural background, have taken a completely different approach, and I’ve seen some very exciting discussions in which people from both sides met and started realizing that each of them represented to the other fresh thinking that could have very important implications. We’ve been working with people of remarkable professional and personal quality, people who would be outstanding in any society, and we all very much enjoy working with each other.

This is such an unusual opportunity for Rocky Mountain Institute to make a difference that I am rather dismayed that we’re finding it hard to fund. It appears that Soviet exchanges have so saturated the foundations’ decision process that many foundations are simply saying we won’t consider Soviet exchange proposals.

Robert: It is unfortunate that they seem to be blind to this next, more substantive level of citizen diplomacy.

Amory: Yes. Of course there are many other groups with far more experience than we have in citizen diplomacy, whose path breaking work we are now benefiting from, but not very many of them are doing what might be called techno-diplomacy. NRDC [Natural Resources Defense Council] comes immediately to mind as an outstanding success in that area.

You see, when our State Department and Defense Department said it was impossible to verify Soviet nuclear testing, NRDC said, "Okay, we’ll do it for you." And similarly, when our Department of Energy decided for ideological reasons that it didn’t want to cooperate with the Soviets on energy efficiency – in fact it wanted to impede them, contrary to the wishes of some others in the administration who felt it was in our security interests to help – RMI said, "Okay, we’ll do it."

There is, likewise, remarkably little funding going into rethinking how to achieve freedom from fear of attack or privation, which is what the dictionary says security means. Most of the large foundations active in the field tend to fund traditional arms control rather than new ideas. Of course, these activities do not offer an immediate market place as our energy efficiency work does; we don’t have people wanting to buy products and able to pay for them, at least not in dollars. We may get a possibility of compensation in rubles for some of our efforts, but we can’t pay our people with rubles.

Robert: How about places other than the Soviet Union? I gather that the Soviet Union is the country where your international outreach work is best developed.

Amory: Yes, aside from Canada. That is a source of some regret to me, because after some recent contacts I feel more than ever how urgent it is to establish ties as close or closer with many developing countries. For countries at the early stages of industrialization, an opportunity exists to by-pass our bad habits and not repeating our mistake of constructing several trillion dollars worth of very inefficient buildings and equipment. Every day that we continue to do an inadequate job in establishing those ties means it’s going to be that much harder to fix things up afterwards.

We’re trying to figure out what we can best do. Through Esalen, for example, we recently had a very encouraging conversation with China’s leading economist and his colleagues, who became very interested in how to build resource efficiency into China’s infrastructure the first time. China recently built 100-odd factories to make refrigerators, because they decided it was time people had them. But by not choosing a really efficient refrigerator design, they also inadvertently committed themselves to building many billions of dollars worth of power plants which a better design could have avoided. I don’t think they’ll make that mistake a second time. China has an extraordinary potential for either unwelcome impacts on the world, or showing everyone else how to do it right. A billion Chinese times anything is a big number!

Robert: Is it your sense that the opportunities and the openness are definitely there at an international level, and that the limiting factors at this time are things like funding and people – human energy?

Amory: Well, that is often but not always true. For example, in all societies that I’ve encountered, whether it’s the United States, the Soviet Union, China, Nepal, or wherever, there is a strong bureaucracy which finds change uncomfortable and wants to continue doing what it has always done. The people who have spent their careers building power stations want to continue building power stations, and only a minority of them are flexible enough to realize that small, unglamorous technologies like better lights and motors can do the same job cheaper. So all the societies we’ve been working with are coping with their internal inertia in different ways with different degrees of success.

The reason, I think, that the U.S. utility industry is changing so fast is that there are 3,000 companies, no two alike, in 50-odd regulatory jurisdictions (actually hundreds if you count all the circumstances of unregulated utilities as well). With such an extraordinarily diverse "ecosystem" of utilities, almost every experiment you can think of is being tried somewhere. So we learn very quickly what works, and then we have the means of communicating that success to others who have reason to want to emulate it.

In much more monolithically organized systems, like the French or the British utility systems, change may take one or two decades longer. But I’m very encouraged by the speed of change in much of Western Europe. Just in the past year or two, for example, utility leaders start to be seriously worried about acid rain and CO2, and the growing unacceptability of their nuclear options. So utilities that were rather unfriendly a couple of years ago are now taking a serious and constructive interest in generating energy through efficiency – what we call negawatts.

Robert: You’ve been consulting for some of these electric utilities for several years now, haven’t you?

Amory: We consult for some oil companies as well, including a very large one which is getting seriously interested in putting more of its effort into selling efficiency for fun and profit.

Robert: In the places where you have gotten a good ear in the energy industry, how have you been able to get them to understand your point of view?

Amory: By showing them that certain kinds of investments (such as in efficiency) can achieve their objectives better than those they have traditionally pursued. Speaking to their concerns in their language, with a strong emphasis on market economics. Having our facts in good order.

Robert: And by persistence, no doubt.

Amory: Yes, and having the good fortune to be able to quote to each company examples from other companies who have succeeded with what we’re talking about. That is going very well. We’ve had, therefore, to change the way we work and to package our information in a form that can go out to a lot more people at once without so much of our time being attached to it. We now have several dozen utilities from all over the world participating in our quarterly update service, COMPETITEK, which provides, I think, the most detailed and current information available on saving electricity, both in terms of hardware and implementation. That’s a significant source of income for our institute.

On the other hand, that material is extremely detailed and highly technical, so we therefore have to boil it down into a Reader’s Digest Condensed Book version, or to even greater abridgements, to fit the needs of audiences other than government and utility planners. We are just starting to figure out how to do those condensations.

We have the embarrassment of having, in a way, too much valuable information – that is, more than we can effectively disseminate to those who need it – and more opportunities to learn from other’s experience than we can fully take advantage of.

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