Energy Strategies

If there is one thing that policy wonks are good at it is sifting through lots of information and writing documents with plans for the future. The plans they come up with reflect not only the quality of the information they start with but also the biases of their education, political leanings, age, etc. — nerds are human, too. The recent increase in oil and gasoline prices has finally gotten the attention of policymakers at all levels of government and there is a recent move to study and address the issue of energy security. This post reviews the current state of US “energy strategy” documents being produced at the federal and state level.

It is increasingly apparent to many that energy, especially liquid fuels, will become less affordable in our lifetimes. This is the inevitable outcome of growing energy demand in developing nations, limited new prospects for easy-to-access coal, oil and natural gas and a global marketplace. Under these circumstances it would make sense for society to begin working on an “energy strategy” — an effort to understand our current energy use and begin planning for a future that is less reliant on fossil fuels.

Data → Information → Knowledge → Wisdom

The Data – Information – Knowledge – Wisdom hierarchy is a useful paradigm for understanding how a society goes about crafting policy that is based on the best available data as opposed to preconceived, perhaps wildly inaccurate, notions of how the world works. It’s worth taking a closer look at how this hierarchy (or pathway) relates to energy and the creation of “energy strategy” documents.

Data – At the lowest level is data collection, validation and dissemination. For energy data this is handled by organizations like the Energy Information Administration, International Energy Agency, Joint Oil Data Initiative, British Petroleum, etc. A tremendous amount of effort goes into collecting and harmonizing the data that forms the base of our pyramid.

Information — At the next level we have “organized or structured data, which has been processed in such a way that the information now has relevance for a specific purpose or context, and is therefore meaningful, valuable, useful and relevant”. [1] Each of the energy data organizations listed above also uses their own raw data to create higher level products as well as summary tables and graphics — information. Other sites, like the Energy Export databrowser, have no raw data of their own and focus solely on the creation of information from externally available data.

Knowledge — Knowledge is where context and belief structures come in and where policy wonks (and bloggers) convert information they find at agency and other web sites into documents that place that information into some context where non-specialists can better understand it. An energy strategy document is an exercise in converting lots of information into socially and regionally relevant knowledge.

Wisdom — In a well-functioning, representative democracy, politicians will use an energy strategy document as input to help guide the creation of an “energy policy”. This is where the rubber hits the road with spending, taxation and regulations. It is the policy maker’s job to combine the knowledge found in an energy strategy with societal input from constituents and show some wisdom when writing new statutes and regulations. (At least that’s how it’s supposed to work.)

Geographic Scope

As described above, an energy strategy document needs to be socially and regionally relevant. It is important to identify the appropriate geographic scope before attempting to study energy issues. While government cannot be expected to create a unique energy strategy for every single household, it is also unreasonable to expect that government can create a single energy strategy that would apply across an entire continent. Somewhere in between lies the appropriate geographic scope for studying energy issues.

That said, understanding the future availability of fossil fuels requires a look at global production and consumption trends. Oil is a globally traded resource and prices paid by oil importers do not vary by much from nation to nation. [2] Natural gas and coal are produced and consumed more regionally but there is still a global market for LNG and coal, putting pricing pressure on domestic supplies. Overall, studying the availability and affordability of fossil fuels requires a global scope.

In contrast, the productive uses of energy within a society, the “energy services”, are determined at a much more local level. Geography, climate, settlement patterns and industrial history all play a role in determining how and how much energy is used within a society. This means that a small country like Denmark can study their energy situation and have some hope of identifying solutions that will work (See the Climate and Energy section of the Danish government website where they have both an Energy Strategy 2050 document and an Energy Policy 2008-2011 document.) In a large country like the United States, this is not so easy.

US National Energy Strategy

Since 2000, several official attempts have been made to study US energy issues at the national level. However, these reports have offered mostly vague near term suggestions and little in the way of longer term vision or of actionable information for communities, businesses and individuals.

When one reads Dick Cheney’s 2001 National Energy Policy Report one finds recommendations for renewables like the following:

The NEPD Group recommends that the President direct the Secretary of Energy to conduct a review of current funding and historic performance of renewable energy and alternative energy research and development programs in light of the recommen dations of this report. Based on this review, the Secretary of Energy is then directed to propose appropriate funding of those research and development programs that are performance-based and are modeled as public-private partnerships.

It doesn’t take much reading between the lines to see where this oil man’s loyalties lie.

Then there’s the 2007 Energy Policy Recommendations from the Bipartisan Policy Center’s National Commission on Energy Policy. Here, recommendations for renewables are less ominous:

• Continue to provide investment certainty by extending the eligibility period for federal production tax credits in five-year, rather than two- or one-year, increments.

•Adopt a federal renewable portfolio standard (RPS) that increases the share of electricity generated by renewable resources nation- wide to at least 15 percent by 2020.

The Energy Project at the BPC was only launched on April 12, 2011 and has yet to produce much in the way of reports. The page for their Energy Innovation Initiative says, in its entirety:

Let’s not hold our breath waiting for recommendations.

Luckily, The Department of Energy is now headed by a Nobel Prize winning PhD. who appears to understand the big picture. The DOE’s first Quadrennial Technology Review (released 9/27/2011) is one of the more intelligent government documents on energy and demonstrates an understanding of what is needed in a strategy document. It clearly identifies problems, strategies for dealing with them and specific technologies that should be pursued.

Unfortunately, while this is undoubtedly a useful document, it cannot address the specifics that affect each region. The energy security concerns and appropriate long term strategies in a cold weather state like Wisconsin are entirely different from those in sunny Arizona, humid Georgia or rain soaked Washington. Individual states in the US, similar in size to European nations, are the appropriate level at which to develop regionally coherent energy strategies.

US State Energy Strategies

State governments in the US are often more responsive than the federal government to the immediate needs of citizens. It probably has something to do with the constitutional mandate in most (all?) state governments to maintain a balanced budget. As citizens begin to worry about energy security, state governments will begin to study the issue. Here is a brief look at the status of  energy strategy planning in just a few states.

Wisconsin

Wisconsin maintains a state energy office who’s URL identifies their laudable goals: energyindependence.wi.gov. This office maintains their own Energy Statistics Book in which one can see the evolution of renewable energy in the state:

This office also supports Energy Independent Communities which aim to have renewable energy count for 25% of energy consumption by 2025. The University of Wisconsin is building a new Wisconsin Energy Institute, to be completed in the Fall of 2012, that will focus on renewable energy research. The Wisconsin Energy Research Consortium, inaugurated in 2010, hopes to “combine Industry and the power of Wisconsin’s top four Engineering Research Universities and Technical Colleges to provide cutting-edge consulting, research, workforce development and industry expansion.”

It is clear that a lot of planning is going on in Wisconsin and, while there is no single energy strategy document, there are many in state government working to help inform decision making.

Arizona

Arizona has an office of Office of Energy Policy at azenergy.gov that was established in 2001. This office is now under the Arizona Commerce Authority. The Solar Arizona site maintained by this office has a distinctly “grow business/create jobs” message. In May of 2011 a Solar Energy Task Force met for this first time with the goal of advising the governor on all things solar but has yet to produce recommendations.

An overall assessment of energy and likely future scenarios is more difficult to locate. To find the kind of summarized critical thinking one would expect from an energy strategy document for Arizona, one has to look outside the halls of government to an organization like Western Resource Advocates, an environmental law and policy group that put out a document titled Clean Electric Energy Strategy for Arizona in 2007 with useful information and possible future scenarios:

Georgia

In Georgia, the Division of Energy Resources is underneath the Environmental Finance Authority and clearly identifies strategic planning as one of it’s mandates. They have one easily found section of their website for Energy Information, Data and Analysis and a publications page that includes several useful documents including the 2006 State Energy Strategy commissioned after the fuel shortages caused by hurricanes Katrina and Rita. This initial rush effort was followed up with a 2009 Update which is a valuable and very readable document with excellent graphics such as the following categories of recommendations:

If the information in the 2009 update were to receive more publicity, making policy with informed stakeholders would be much easier. Unfortunately, there are a number of links in government documents to georgiaenergyplan.org which is an apparently unmaintained government site that currently only contains sponsored advertising.

Washington

The Washington State Energy Office is underneath the Department of Commerce and has a clearly identified State Energy Strategy section on their website. The original 1993 State Energy Strategy is both visionary and quaint with it’s black and white photos:

Telecommuters avoid rush-hour by working at home or in a local telework center.

A 2010 Energy Strategy Update has a lot of careful analysis and an interesting set of future scenarios depicted on axes of innovation and geopolitical stability:

Background scenarios developed in the September 2010 scenario planning workshop, that will be used to test policy frameworks. The four scenarios Corporate World, iFuture, Dark Age and Inertia represent different outcomes for national and global parameters beyond the control of Washington policy makers; a robust energy policy framework will fare well in all of these climates.

An advisory committee is working on a full revision to the State Energy Strategy that should be out in December. Various discussion briefs are available at their website. The Washington Office of Financial Management also maintains a Sustainable Washington website with a goal of promoting sustainability and assisting state agencies in moving in that direction.

Washington state is taking energy security seriously and making a concerted effort to gather information and create scenarios that will lead toward a truly resilient energy policy. But it looks like the policy wonks may have to go to Georgia to learn how to condense their analytical expertise into a simple graphic fit for public consumption.

Conclusion

Within the United States, energy planning must take place at both the national and state level. At the federal level we may expect to see improved efficiency standards for vehicles, buildings and consumer products but very little that applies at the local level. The on-the-ground realities in each state are not amenable to national solutions. For regionally relevant policy we must look to state government

This quick review makes it clear that at least some state governments are aware of energy security issues and are making an effort to at gather information that may, one hopes, lead to forward-thinking, possibly even wise public policy.  The EIA list and map of States with Renewable Energy Portfolio Standards offers quick links to many of the state agencies responsible for energy planning.

Anyone interested in a theoretical and practical framework for analyzing energy security is encouraged to read David Karlsson’s 2010 thesis: Is energy in Sweden secure? Karlsson was a student in the Global Energy Systems group at the University of Uppsala and his thesis applies concepts developed by Larry Hughes at Dalhousie University in Nova Scotia. Karlsson’s approach assesses energy security with 4 A’s: Availability, Accessibility, Affordability, Acceptability and then identifies strategies for achieving greater energy security with 4 R’s: Review, Reduce, Replace, Restrict. His thesis does a remarkable job of gathering and presenting data for Sweden and breaking out the different energy security issues by fuel type and sector of the economy. This approach is one that could effectively be applied to each of the United States.

1. Rowley, Jennifer (2007). “The wisdom hierarchy: representations of the DIKW hierarchy”. Journal of Information Science 33 (2): 163–180. [↩]
2. Global price balancing for oil will have temporary exceptions: Why are WTI and Brent Oil Prices so Different? [↩]