Voices Of Innovation: Amory Lovins

CEO of the Rocky Mountain Institute, a nonprofit energy and environment policy think tank

The U.S. economy is becoming more energy-efficient. How much further can this go?

The U.S. now uses 43% less energy and 50% less oil per dollar of real gross domestic product than in 1975, mostly because of better technical efficiency. Yet this revolution has only just begun. We can profitably save over half our oil and gas, and nearer three-quarters of our electricity -- that's far cheaper than buying it. This efficiency revolution will be at the core of competitive advantage, and laggards will suffer.

How seriously is the need to cut back on fossil-fuel consumption being taken?

It has been taken very seriously by many state policymakers and in much of the private sector but by few at the federal level. Leaders in the transition beyond fossil carbon are earning startling returns. Such firms as DuPont (DD ), IBM (IBM ), and STMicroelectronics (STM ) are routinely cutting their energy intensity 6% a year, and seeing return on investment coming from retrofits to existing systems in just two or three years.

What will the energy future look like?

Wind, and perhaps coal [if CO2 can be sequestered], will beat natural gas for making hydrogen, which will emerge as the dominant energy carrier. Ultralight hybrid vehicles will be ubiquitous. Most important, all energy uses will become far more efficient, so many of the new energy sources commonly proposed won't be needed, and irrationally exuberant investors who support costlier forms of energy will lose their shirts.

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