If we declare that there's an obesity epidemic and then rejoice in low prices for junk food, we’re deluding ourselves into thinking we’ll solve the problem. But that’s precisely the paradox we face with energy from fossil fuels.
Humanity’s greatest challenge in the 21st century is minimizing its dependence on fossil fuels. Yet we’re fed a steady diet of ads extolling plentiful natural gas extracted from previously inaccessible areas and huge oil deposits in Canada’s tar sands.
Our desire to “go green” and reduce carbon in our atmosphere gets sidetracked because all of us -- whether in our homes or at work -- see our energy use as something that happens only within our own four walls. The truth is that we might all make very different decisions if we better understood the impacts of energy from source to site, or if we had a better sense of the volatility of a particular type of energy.
For example, much of that “plentiful” natural gas is being extracted from deep underground pockets through hydraulic “fracking,” a water- and chemical-intensive process that involves fracturing the earth to reach gas deposits. The very viscous oil in Canada’s tar sands is pulled from sand and rock through water-intensive steam injection and refining, a process that by some estimates creates 12 percent more greenhouse gases per barrel of final product than extraction of conventional oil. And electricity generated from coal-fired plants has a bigger impact on carbon emissions than electricity from natural-gas-fired plants.
The impact of the energy produced is borne by the environment rather than the customer, whose only insight into her energy use is to what she sees on her utility bills, which has very little connection to the environmental impact at the source. In other words, a kilowatt-hour generated from coal and one generated from solar may have a similar dollar cost (in many cases, old coal is cheaper) but a tenfold difference in environmental impact.
The reality is that most people and companies measure the performance of conservation projects using only near-term financial metrics.
For example, solar panels often are evaluated based on the number of years it will take to recapture the initial investment. But with new tools like EnergyPoints (my company), planners can also measure the return of projects from an energy standpoint.
For example, the financial payback period for a solar panel might be ten years, but the energy payback (comparing the amount of energy embodied in the panels relative to the amount it produces) might be just five years. By simultaneously measuring the amount of money and energy saved, organizations can optimize the blend of their projects to both reduce cost and risk, similar to an investment portfolio.
To explain it further, the current metrics we use for measuring energy (kilowatt-hours of electricity or kilo-gallons of water) are relevant within the four walls of a facility or home since they reflect what we pay on our monthly utility bills, but they have almost nothing to do with measuring the true impacts and risks of energy resources, which EnergyPoints calls “environmental performance” (EP). Moreover, because there is no unified measurement, it’s nearly impossible to compare one type of resource against others.
According to a recent GII Research report, nearly $600 billion was invested in 2012 in energy efficiency across resources, such as electricity, fuel, water and natural gas. Hundreds of companies regularly monitor their energy efficiency, but in virtually every case, their examination is focused solely within the walls without quantifying environmental performance.
If you knew the same amount of electricity generated by coal requires ten times more energy from the overall EP perspective than the same amount generated by solar, would you rethink the source of your energy? If you could select cleaner options, would you? And would the volatility of the energy market factor in to your energy choices?
If you understood that water in Albuquerque is four times more energy-intensive than it is in Boston (although its costs just one-third in dollars), would your company take equal measures to protect this resource if it had plants in both cities? As a resident, is installing a low-flow shower a better idea in Albuquerque than Boston?
The bottom line is that most of us focus primarily on what’s inside our own four walls (and on our energy bills) and understanding environmental performance remains a vision we can’t fully grasp.
Fortunately, data exists all around us that can give us the insight we need to make more informed decisions. There are literally billions of energy-relevant data points from around the globe, and by running the data through sophisticated algorithms, we can understand and quantify how green, plentiful, expensive, risky, or scarce any given energy resource might be in each location. By analyzing big data in this way, the debate around energy usage and types of energy can be boiled down to common sense, letting advanced math and data do the hard work of number crunching.
Energy is unifying and can be used as the common denominator to compare all resources. Using energy, we can adjust for things like regional scarcity of water or emissions from coal-fired electrical plants to provide recommendations around energy that are relevant, actionable and accurate. Using energy and modern data mining techniques, we can essentially know the “energy points” (think an MPG-equivalent measurement for virtually any type of energy) for every electrical outlet, water faucet, or bag of waste and allow decision-makers to manage their energy resource productivity with simplicity by using math and data, not adjectives like "green," speculation, controversy or myth. And with that, we can truly begin addressing the challenge of weaning ourselves from fossil fuel.
As a case in point, Walsh and Associates, a major Wal-Mart distributor based in Missouri, employed a two-prong strategy that improved its energy productivity and environmental impact. First, the company reduced its overall consumption of energy by reducing demand. Next, it replaced most of its energy sources with a more efficient source: energy from the sun.
Today, Walsh and Associates boasts the largest commercial solar installation in Missouri. More importantly, the company understands its “real” energy footprint. While some might argue that solar is free energy, that’s not entirely accurate. It requires energy to manufacture, transport and install the panels themselves (and the EnergyPoints software takes those factors into consideration). Still, the energy return on investment for solar panels is much greater when compared with burning fossil fuel to generate and transmit energy from a remote site.
By simultaneously examining its energy demands within the four walls of its buildings and the supply from the grid combined with rooftop solar panels, Walsh and Associates can truly measure, understand, and manage the entirety of its energy footprint.
Walsh and Associates and other companies are making a difference by considering the environment in their energy decisions. But with the U.S. still consuming more than twice the energy of any European country on a per-capita basis -- despite driving fewer gas-guzzling cars and replacing incandescent light bulbs with fluorescents and LEDs -- we still have a long way to go. A comprehensive, accurate and yet simple-to-understand energy management system could make a dramatic difference.
Ory Zik, Ph.D., is founder and CEO of Boston-based Energy Points.