WASHINGTON, D.C. — Federal Reserve Chairman Alan Greenspan's testimony today before the House Energy and Commerce Committee, while a reasoned analysis of the U.S. natural gas problem, overlooks half of the solution. He aptly described the emerging crisis in the U.S. gas supply and price situation; this situation calls for substantial action in the coming months to head off a crisis that could seriously damage the U.S. economy. But Greenspan spoke only about longer-term options for increasing natural gas supply. He ignored the practical solutions available now through energy efficiency and conservation.
"Chairman Greenspan has it half right: we need more gas supply, but we also need to use the efficiency resources at our disposal, because they are the only effective near-term response," said Bill Prindle, Deputy Director for the American Council for an Energy-Efficient Economy (ACEEE). "Years of energy efficiency experience show that we can save enough energy in the next 24 months to bring some calm to the gas market."
ACEEE's preliminary analysis shows that we can cost-effectively cut U.S. gas demand more than 10% through gas end-use efficiency, and a like amount of gas through electricity end-use efficiency. That's important because a growing fraction of power generation comes from gas, especially during peak periods. Saving energy on peak, whether as electricity or natural gas, benefits the nation by exerting maximum downward pressure on gas prices, and frees up gas for critical uses. Most importantly, much of this potential can be reaped in the critical next 24 months, if the political will, information, and resources are there.
ACEEE proposes a concerted energy efficiency and conservation effort on the part of the Administration, Congress, state energy offices, utilities, the efficiency industry, consumers, and businesses. Significant energy savings can be realized in the next two years through the technology and the delivery channels that exist today. But to make this happen, we need a high-level national commitment to accelerate efficiency investment and smart conservation through education, technical assistance, and incentives.
Investing now in efficiency and conservation will reap huge benefits for American consumers, and for the fragile economic recovery. By shaving peak demands for gas and electricity, we can reduce prices, make energy bills manageable, keep manufacturing jobs in the United States, and put the American economy more firmly on the road to recovery.
More information on ACEEE's latest analysis and other materials on the natural gas crises is available online at http://aceee.org/energy/natlgas.htm.