Economist are wrong - Energy Efficiency pays
Economists have long said that when oil reached 30, 40 or 50 per barrel the cost of goods would skyrocket and the economy would crash. Now at over $70 per barrel the economy has hardly noticed. According to an article in the Wall Street Journal, American corporations are taking steps to cut their energy cost through cleverness, thereby preventing or minimizing price increases.
- UPS has instituted electronic logbooks for their delivery trucks, saving the company over 300,000 quarts of oil per year over doing periodic oil changes. They have started tracking jet fuel prices real time to route planes to take advantage of lower cost suppliers.
- Wiffle Ball Co. has increased the speed of their injection molding machines, which reduces energy input and decreases labor cost per part.
- Glassmaker Owen-Illinois is optimizing their furnace to make glass at lower temperatures saving fuel cost. They also converted one plant from fuel oil to less expensive natural gas, saving $3,000,000 per year.
- Summitville Tiles shut down four of their kilns last winter, when natural gas prices where higher. They produce more tiles in the summer, with cheaper gas, to maintain their production.
- Airlines have adopted efficiency improvements, such as winglets, and raised their breakeven fuel costs from $22/barrel to $48/barrel. They have also hedged their fuel purchases at lower rates well into the future. Smaller airlines have formed alliances to get volume fuel pricing. Other airlines are carrying more fuel so they can avoid buy fuel at expensive airports.
- Automakers recognize the need for more fuel-efficient vehicles. They are investing in hybrid technology, six speed automatic transmissions, smaller cars and lighter weight SUV’s. In the short term SUV makers are offering big discounts on large SUV’s, in effect rebating the extra fuel cost to the customer.
- Eyots Rndo Oyj, a Finland based paper maker has installed variable speed motors on their dryer fans. Since all paper doesn’t need the same drying cycle, now the cycle can vary to match the need, and save electricity.
- Pinehall Brick reduced the energy requirement in their kilns by increasing the size of the holes in the brick, which also speeds up production. This change saves about 2.5% but when you make 300,000,000 bricks per year it adds up.
For the most part these are not new technologies, so why have we waited this long to implement economy and efficiency? Possibly the answer lies in the price of energy. As energy gets more expensive, investment in efficiency becomes more rewarding. All these years our government has feared high energy prices, using subsidies to keep prices down, thereby fueling over-consumption and waste. Now we find that, done right, high prices make us more efficient, more competitive on the world market, all the while producing less pollution by burning less fuel and capturing it to do more work. The fact that we are saving fossil fuel for another day is just bonus. |
