August 18, 2022

The Us Can Counter Global Energy Chaos By Increasing Its Efficiency

4 min read
The Us Can Counter Global Energy Chaos By Increasing Its Efficiency

In reaction to Russia’s invasion of Ukraine, a large portion of the proposed energy responses has been centered on raising domestic oil and gas production. While this will be helpful, improving U.S. energy efficiency is a potent instrument that has not gotten enough attention.

Greater domestic energy efficiency would have added significant advantages for American consumers and the economy in addition to reducing the U.S. reliance on Russian oil and gas. Any strategy to combat the energy turmoil brought on by Russia should place more emphasis on encouraging domestic energy efficiency.

Some have explained how boosting domestic oil and gas production is crucial to safeguarding American strategic interests. Although accurate, the effect can be overstated. Even though the U.S. has emerged as a major producer of petroleum and a net exporter of petroleum, a sizable amount of the oil that Americans buy at the pump and elsewhere is still made abroad.

For instance, in the past year, the United States imported 8.47 million barrels of petroleum daily or 43% of what was used in the country. Future imports are anticipated despite rising domestic output due to a number of issues, including incompatibilities between locally produced crude oil and the capacity of American refineries. Although increasing domestic production can assist to change the proportion, it won’t entirely eliminate the substantial amount of imported oil that remains in American markets.

But by reducing how much oil and natural gas Americans must consume, increased energy efficiency offers a crucial strategic complement to domestic production. Energy efficiency reduces energy use with a number of beneficial side effects, whether it is through enhanced industrial processes, HVAC systems, more fuel-efficient cars, or more commonplace practices like engine tune-ups and maintaining optimum tire pressure.

Energy efficiency is particularly important in the high-price environment of today because it helps shield American consumers from the fluctuating cost of energy on overseas markets. Increases in the price of foreign oil will have less of an effect on household costs if you use less energy for transportation to work or for heating your home.

The Us Can Counter Global Energy Chaos By Increasing Its Efficiency

All consumers will gain from reducing the upward pressure on prices by reducing the U.S. demand for energy. It lessens the amount of money American consumers send to foreign energy suppliers, boosting household energy budgets and the U.S. trade balance through decreased imports.

Energy efficiency is significant since it frequently entails investments in domestic companies, from American manufacturing to more regional service providers. The installer of energy-efficient windows or heat pumps is frequently a local resident. Spending locally to support local businesses rather than importing energy to support foreign regimes ought to gain political traction.

Additionally, the global market for energy efficiency goods and expertise ought to expand as Europe and other nations will need to spend more on their own energy efficiency for security and environmental reasons. The U.S. industry may become a leader in these technologies by promoting energy efficiency domestically, and opening up economic prospects globally.

Domestic energy efficiency yields many similar benefits, and domestic energy generation is in fact a strategic advantage for the United States. By boosting the quantity of energy the United States has available to export at any level of domestic production, it may also support Europe and other allies. Additionally, the U.S. trade balance will improve as a result of selling a larger proportion of domestic production to foreign markets.

The benefits to the environment are some people’s top priorities when it comes to energy efficiency. Energy efficiency is routinely ranked as the top clean energy technology by the International Energy Agency (IEA). For instance, it accounts for more than renewable energy, which contributes only 32% of the emissions reductions required to meet the Paris Agreement’s “far below 2 degrees Celsius” temperature goal.

The Us Can Counter Global Energy Chaos By Increasing Its Efficiency

Greater energy efficiency in the United States offers a solution to shield consumers’ budgets from price increases while shielding them from the increased risk of fires, droughts, and other harm that unmanaged climate change could cause. Additionally, by lowering pollutants through lessening energy use, it would enhance air quality.

Energy-efficiency promotion initiatives have been launched by the Department of Energy, state-level organizations, and private-sector companies. Many offer financial assistance to businesses and households so they may buy energy-efficient equipment, with the benefits to society and consumers considerably outweighing the expenses.

However, much more work needs to be done to encourage the far higher investment levels needed to mitigate climate change. According to the IEA’s estimates, by the 2030s, investments in energy efficiency must grow fourfold in the United States and by a comparable amount internationally.

Why isn’t there greater investment in energy efficiency with all these benefits? Numerous and well-known within the energy efficiency community, the causes are many. They include a sector with weak financial and political clout, particularly in comparison to oil firms and other energy producers. Unfortunately, energy efficiency isn’t really appealing.

Insulation installation and other stories about energy conservation are less captivating than the geopolitics of “Big Oil,” which has long caught people’s attention. Although energy efficiency may not be visually appealing, its advantages are too great to overlook, especially in the unstable world of today.

To safeguard its citizens from energy instability brought on by external forces, such as Russia’s invasion of Ukraine or upcoming unpredictable or even predicted events, the United States has to increase energy efficiency.

Over the course of his more than 25 years in the field, Philippe Benoit has held executive roles at the World Bank and the International Energy Agency. He presently serves as Global Infrastructure Analytics and Sustainability 2050’s research director.

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