Dark Days For Energy Efficiency

Federal funding for research aimed at cutting energy use faces the knife

After years of research, Charles Bates is close to perfecting a more energy-efficient method for casting engine blocks, a technique that industry would love to put into wider use. The University of Alabama engineer, who uses X-rays to monitor the shaping of molten metal, says only one big technical hurdle remains in refining a process that uses 30% less energy than traditional casting methods. "We've been making progress by leaps and bounds," he adds.

But Bates may be stopped short. The U.S. Energy Dept. wants to slash funding for the efficiency program that supports his work. This perplexes the foundry industry. "It's a great program, and we'd be sorry to see it go," says Bryan Baker, vice-president of Vulcan Engineering, which supplies casting equipment to General Motors (GM ), BMW, and others.

Across the board, federal funding for energy efficiency is taking a major hit. In the White House's proposed 2007 budget, efficiency spending is down 17% overall from 2006 appropriations, and 25% from levels in 2002. The cuts are deeper for individual programs. Research to help industry reduce energy use is slated for a 30% decrease, and some programs are being shut down.

As a result, "we would be leaving a lot of energy on the table," says Peter Molinaro, vice-president of Dow Chemical.

Bush Administration officials profess support. "Efficiency is among my highest priorities," insists Assistant Energy Secretary Alexander Karsner. But an increasing share of research money is going to biofuels and hydrogen instead. "They talk the talk but are pulling the rug out from under these programs just when they are needed most," says R. Neal Elliott of the nonprofit American Council for an Energy-Efficient Economy.

The Administration has already had one embarrassing moment in its drive to ease the energy crisis. In his State of the Union speech on Jan. 31, President George W. Bush called for investment in technology to break our "addiction" to oil. Just before a follow-up Presidential visit to the National Renewable Energy Laboratory in Golden, Colo., the White House found that the lab had just laid off 32 workers because of budget cuts. Funding of $5 million was restored before the trip.

Now, efficiency advocates are lobbying Congress to limit the damage to their cherished programs. With energy prices high and supplies tight, they argue, a mere 1% drop in demand causes prices to plunge 20%, easing cost pressures for both consumers and businesses.

Plus, these government efforts pay big dividends. Setting efficiency standards for refrigerators alone is saving nearly $20 billion a year, the California Energy Commission estimates. But the Bush Administration has so far failed to update appliance standards. In another federal program, university engineering students help small and medium-size companies reduce energy use. The $6 million per year effort brings $40 million in annual savings and trains new efficiency experts. But the number of universities involved is slated to be cut in half. And a threatened program to develop energy-saving processes for heavy industries has brought advances in everything from metal casting to glassmaking. "I can't think of another program in government where the results are so great," says Lawrence W. Kavanagh, vice-president of the American Iron & Steel Institute.


Bush administration officials counter that the private sector doesn't need support since lower energy costs should be incentive enough. That's unrealistic, industry representatives say. On the plant floor, "the production schedule is more important than energy savings," says Nasr Alkadi, energy manager at General Motors' Wentzville (Mo.) plant. At the nonprofit Gas Technology Institute, federal dollars are helping David Rue develop an energy-saving process for making glass. "This has a chance to be a revolutionary change," he says, "but no one company has the resources to do it on its own."

Some states "are trying to fill the vacuum," says Arthur H. Rosenfeld, commissioner of the California Energy Commission. Thanks to state efficiency programs, Californians use about the same amount of electricity as they did in 1976. In contrast, per capita use in the U.S. overall has jumped 50% over the same period.

Biofuels, wind, and other renewable sources are now getting all the attention, and a larger share of federal dollars. But "efficiency is the quickest and cheapest solution," says Dow Chemical's Molinaro. "It won't get us all the way there, but it is absolutely the way to start."

By John Carey

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