Appliance Efficiency: Does the Fuel Cycle Make a Difference?
The electric industry watches contentedly as the DOE ignores the gas industry's strongest arguement.
While the Department of Energy continues to take a fresh look at appliance efficiency standards in committee meetings and rulemaking initiatives, in large part it continues to ignore the gas industry's allegations of a bias toward electricity.
To be sure, the DOE has been active in standard-setting on several fronts, ranging from fluorescent lamp ballasts , to clothes washers , to central air conditioners and heat pumps (see rulemaking issued in November, in . At press time, stakeholders expected new action at any time in the DOE's water heater docket .
No matter the docket, however, the gas industry cries foul, complaining that it loses before a proposed rulemaking even begins.
Define Efficient for Me
What the gas industry primarily wants to talk about - and what the DOE largely has ignored - is the perennial "site vs. source" debate, or whether an appliance's fuel efficiency should be measured only at the site of consumption (site analysis), or whether the entire fuel cycle, including the energy source for the power needed to run an electric appliance (e.g., how much smog does the coal-fired plant emit to power that electric water heater?), should be considered in measuring an appliance's efficiency (source analysis). Naturally, the gas industry's preferred method of measuring appliance efficiency is source analysis.
In fact, back on June 3, 1999, President Clinton issued Executive Order 13123, which called on the federal government to reduce energy use and emissions "as measured at the source. To that end, agencies shall undertake life-cycle cost-effective projects in which source energy decreases, even if site energy use increases. In such cases, agencies will receive credit toward energy reduction goals through guidelines developed by DOE." (See www.eren.doe.gov/ femp/aboutfemp/exec13123.html.)
On the other hand, the preliminary agenda for a scheduled March 28 meeting of the DOE's appliance energy efficiency standards advisory committee, makes no mention of the issue.
So is the DOE biased? That depends on whom you ask.
"[I]n my opinion, the Department of Energy does have a bias," says Bob Hemphill, principal project manager for gas pipelines at GRI. Hemphill is quick to remind that comparing electricity and gas is comparing apples to oranges. "Electricity is an energy form, not an energy source," he says.
Meanwhile, Steven Rosenstock, manager, electric solutions, at the Edison Electric Institute, thinks otherwise. "We've been satisfied with the [DOE's] process. They've taken all of our analyses into account," he says, referring to the various proposed rulemakings on efficiency standards.
Rosenstock employs the traditional argument against using source analysis: It would make calculation entirely too complicated. "They've used site efficiency guidelines because it is a lot easier for the consumer to understand," Rosenstock says. It would be both confusing and perhaps unreliable to make an attempt at incorporating source into the equation, which would result in scenarios that Rosenstock is quick to fabricate. "If you have a windmill, that's one type of efficiency, but if you have a nuclear plant, then it's this type of efficiency, but for a coal plant, it's this type" and so on. Furthermore, Rosenstock argues, in a deregulated market the consumer can continually switch suppliers, making source efficiency analysis virtually impossible. In sum, the picture Rosenstock wants to paint is one depicting the DOE opening a can of worms with the mere mention of the word source.
The gas industry concedes the complexity of the issue, but still feels the calculations can be done. Bill Ryan, GRI's team leader for space conditioning and appliances, urges the DOE to "take a shot at it."
Charlie Fritts, vice president for government relations at the American Gas Association, agrees. The gas industry, in fact, has come up with its own calculations for adding source to the efficiency equation. "Before a single electron hits your water heater, 73 percent of the energy that came out of the ground [i.e., fossil fuels] is lost." In comparison, says Fritts, natural gas loses only 9 percent from the wellhead to your house.
Currently, the DOE's 54 percent efficiency requirement for gas water heaters falls well short of the score (in the mid-eighties) posted by electric water heaters. Yet, according to the calculations by the A.G.A., that 54 percent-efficient gas water heater is actually more efficient - when you take the fuel source into account. The A.G.A. numbers also put electric water heaters as polluting, on average, three times as much as their gas counterparts, when using source analysis. That, Fritts says, "is our beef with the Department of Energy."
And they run across the same issue everywhere. "We have the same problem with furnaces, the same problem with the home energy rating system," he says, referring to the five-star system for home efficiency. Fritts speaks of situations where a four-star electric home actually generated more pollution than a gas home that was awarded only three stars, according to A.G.A.'s account. "It was a classic, 'I'm from the government; I'm here to help you,'" he says.
But using source would just get too complicated, argues EEI's Rosenstock. If you're going to look at source, then where do you stop? What about the cost of oil drilling or transporting crude from the Middle East? What about the U.S. military budget for the Gulf War?
And, Rosenstock argues, the Department of Energy already takes source into account in other ways.
"They're [already] using [source] to set priorities in terms of how many quadrillion British thermal units can be saved," he says, referring to the DOE's means of picking and choosing which appliances to go after based on the amount of energy savings they would achieve. "We have no problem with that."
Emissions: What's At Stake
The A.G.A. still believes that gas gets the short shrift. Fritts cites water heaters as an example: "The DOE sees the 86 percent rating and says 'we can't do much more with that.' Then, it sees the 54 percent for gas and says, 'Man, we could get that up a little higher.'"
Moreover, if you reduce the emissions from the gas water heater by 10 percent and shift that 10 percent over to electric resistance water heater, "you've made the world worse," says Fritts. "That's the problem, and DOE doesn't get that," he says. By the A.G.A.'s count, a 10 percent market shift in the other direction, to gas water heaters, would reduce CO2 emissions by 1.1 million tons per year.
Fritts also complains about the DOE's handling of the electric heat pump (as opposed to the electric resistance water heater). Referring to the department's decision not to increase the efficiency standard for the relatively new product, Fritts says, "DOE failed to raise the bar for electric heat pumps because they said it wasn't on the market yet, but we feel they just keep coming back to us because they see a target."
Consumer Cost: The Ultimate Standard
David Goldstein, the appliance efficiency standards expert for the Natural Resources Defense Council (NRDC), believes that both the electric and gas industries are missing the point.
"We're not excited about either site or source," Goldstein says of NRDC's position, "because [source] relates to something people cared about in the '70s and don't particularly care about anymore, and [site] doesn't relate to anything at all that I can understand. If you think all energy forms are equivalent and you're mainly concerned about how much we're importing, then source energy matters to you. I don't know anyone who cares about that."
And regarding site energy, Goldstein says, "That's sort of like going in a bar and pricing drinks by the ounce."
To Goldstein, the debate was current in the 1970s but has now played out: "I don't understand why either side cares about it that much now."
On what equitable basis, then, do you create standards? This time, the environmental side sees economics as a productive force.
"The much more useful way to measure energy is in cost," Goldstein says. That obviously works well for consumers, but, as Goldstein notes, the green camp also likes cost measurement "because the pollution impact, coincidentally track the costs pretty well." So, he says, if you're comparing kilowatts and therms, "the easiest and most straightforward and least controversial way to do it is also the most technically correct. The current national average costs track very closely the green house pollution emissions and reasonably closely other pollution emissions."
As for the DOE's neutrality in general, the man on the sidelines of the electric-gas fight says the department for the most part has been fair. "I think DOE has made a strong effort in the standards program to not favor any fuel unfairly."
But Goldstein returns to his preference for cost analysis when he suggests a different bias on the part of the DOE's policies. "There are some constraints within the labeling program that the gas industry objects to, and I think the gas industry's position has merit." The DOE's labeling program, he says, potentially can make a gas appliance appear less efficient than an electric appliance "that actually would cost a lot more to operate and cause a lot more pollution."
Once again, though, the blame does not necessarily lie with the DOE. "A lot of that is not a DOE call because it's embodied in the legislation."
Meanwhile, residential gas consumption continues to fall, says GRI's Hemphill. "I don't know why that is," he adds, but he is obviously concerned. "I would think that the Department of Energy would have some answers to why [that is] happening."
How would the A.G.A. feel about ditching the site vs. source debate and going to cost analysis? That, says Charlie Fritts, would be far preferable to the current state of affairs. "If they went to cost, and only cost, we'd be a lot happier organization."
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.