Reinventing Fire: Bold Business Solutions for the New Energy EraReinventing Fire: Bold Business Solutions for the New Energy Era

Amory B. Lovins and Rocky Mountain Institute

[Chelsea Green Publishing, 352 pages]

Can the U.S. stop using coal, oil, and nuclear by 2050 and can that transition prove economically advantageous? Those two questions drove Amory Lovins and the Rocky Mountain Institute (RMI), a Colorado-based “think-and-do tank,” to write Reinventing Fire, a “roadmap for navigating the United States’ economy through the end of the fossil-fuel era.”

By 2050, the U.S. economy is forecast to grow 158 percent. That substantial increase would normally mean more consumption, more energy, more waste. Not so, says the RMI. They propose an alternative economy powered by no fossil fuel, no nuclear energy, and one-third less natural gas. The best part: the technology exists to make this happen right now.

Reinventing Fire does not present an impassioned plea to save the environment, improve health, well-being or security, it charts a course for America to boldly step into the future and embrace a new economic paradigm that provides positive externalities while improving the economy. Reducing energy consumption as the economy grows is not some fantasy Lovins and his crew dreamed up; they’ve based their projections on hard facts. From 1977 to 1985, the U.S. reduced its oil intensity at an average rate of 5.2 percent per year while the economy grew. The same can be done right now.

RMI bases its analysis on generally accepted future energy needs and a conservative projection of 2050 in which businesses use today’s technologies at a normal rate of return. The plan doesn’t ask for any new national taxes, subsidies, mandates or even for pricing carbon. It’s focused on businesses making the shift to a more efficient beyond fossil-fuel economy. Doing so will cost the nation $5 trillion less to power itself. It’s simply good business.

Since 80 percent of the country’s carbon emissions come from burning oil and fuelling power plants, and nearly 75 percent of electricity goes towards powering buildings, Reinventing Fire focuses its plan on oil and electricity. They break their analysis into four key sectors: transportation, buildings, industry, and electricity. With 30 years of experience collaborating with firms in those four sectors to back up their claims, they offer a number of key solutions. The following is a partial list:

Transportation

Ultra-light low-drag autos – Using materials such as carbon fibre makes vehicle bodies cheaper and easier to manufacture. The technology exists to boost fuel economy by 50 percent (without electrification) just by cutting down on weight, aerodynamic drag, and rolling resistance.

Electrified autos & feebates – The electrification of vehicles can cut down 63 percent of 2050 fossil fuel consumption. Regular feebates spark buyers and automakers to make the switch to electric. Manufacturing innovations and economies of scale drive prices even lower.

Productive vehicle use – Smart growth, smart IT traffic and transport systems. If we smarten up, we can cut half of the 13,000 miles on average that each American drives per year and almost one-third of freight-hauling miles. Reducing vehicle trips improves the environment, saves money better spent elsewhere while also improving personal mobility and freight logistics.

Buildings

Integrative design – If all involved in the building process did a better job collaborating (e.g. to shrink or eliminate buildings’ equipment usage) they could design more economical, energy-efficient buildings.

Building policies – As energy costs rise, building purchasers could benefit from better access to building energy use profiles. Requiring disclosure of this information gives them the ability to make better decisions and provides an economic driving force for improving building efficiency.

Non-energy benefits – Statistics show that green buildings with LEED or ENERGY STAR certification charge an average of 3 percent higher rent, sell for 13 percent higher, and have improved occupancy rates. These external benefits are often worth more than the savings in energy.

Industry

Energy-efficiency – Technologies exist to greatly reduce a company’s energy needs, energy losses, and improve energy efficiency while making use of waste energy, but adoption is exceedingly slow. Making the change can result in a significant cost advantage for a company over its competitors.

Cogeneration – Combined heat and power applications can replace 60 percent of America’s 2010 coal-fired electricity. Unfortunately, technological limitations and regulatory hurdles prevent many industries from adopting these changes.

Dematerialization – Manufacturing is a low-margin business. Innovative designs that cut waste, recapture resources lost in the extraction and manufacturing processes, and last longer and can be remanufactured, can improve a company’s profit margin and increase business opportunities.

Electricity

Renewables – Quintupling current utility-scale renewable capacity can deliver 80 to 90 percent of 2050 electricity needs at both a financial and environmental cost savings.

Superefficiency and renewable supply – Smart technologies and designs can deliver the same or better service, but at a savings of 70 percent less electricity per dollar of GDP than in 2010. If power plants switched to renewable resource technology, they could generate more than 20 times America’s total 2010 electricity use.

Incentivization – Rewarding innovation improves choice and enables fair competition, making the transition to renewable energies profitable and efficient. What’s needed? Better regional cooperation, more pilot projects to demonstrate workable technologies, distributed intelligence, and improved grid architectures.

Reinventing Fire makes it clear that this massive transition will not be easy, but that making the transition is easier than not making it. They point to the economic reality whale-oil suppliers faced in the 1850s. At that time whale oil was a major oil source, but before running out of whales, the industry ran out of customers. The same can apply to oil and coal.

Beyond the comprehensive research and in-depth analysis that went into Reinventing Fire, the book teaches us to dream large and doubt no more. We can envision a new world. We can reinvent the economy. The technology is already in place to do so, we just have to break out of the manacles of inertia and jump into action. The market reacts quickly to changes in price. Reinventing Fire connects the dots between energy efficiency and the market to provide actionable solutions to reinventing the economy. There’s no more reason not to act fast.

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