Editor's Letter

05/02/2011 | By Chris Olson

The Pendulum of Energy Prices and Perceptions

Rapidly rising gas prices have reignited talk about energy efficiency, showing once again that myopia is the norm. One would think that the recognition of inevitably higher future prices would become more constant over time, unlike the swings of energy prices themselves. But in this regard, memory doesn't seem to serve us well.

Only a few months ago, when pump prices were significantly lower, I read that sales of SUVs and other less efficient vehicles had picked up beyond the expectations of auto execs. Now there are reports of buyers demanding fuel efficiency. Given that the lifetime of the average vehicle is around 13 years, one would think that buyer behavior would fluctuate less in the short term.

Pause for a moment and think about 13 years from now. Sure, today's Libyan crisis will likely be over, but will fossil fuel pollution, global warming, oil spills, nuclear meltdowns, and the increasing energy demands of developing countries be things of the past? And while renewable energy is a very exciting prospect, it is hard to envision how the technology could be developed and implemented quickly enough to supply more than a slice of demand.

The behavior of businesses seems to be little different from that of consumers, and good intentions always seem to outrun actions. A survey I conducted last year of BUILDINGS subscribers showed that most respondents (59%) are planning to reduce square-foot energy consumption, but only 56% have conducted an energy audit, only 53% have a strategic energy management plan, and only 42% have a dedicated energy manager driving their efforts.

How do the 58% of respondents in organizations without an energy manager expect to reduce energy consumption in the near term? And how do the 44% who have not had an energy audit expect to reduce their consumption if they don't know what it is now? What do they see when they look 13 years ahead?

An unwavering focus on conservation, no matter what current energy prices are, is the only way to manage the inevitable future risks and their impact on profits. As Peter Drucker said, "We must stop talking of profit as a reward. It is a cost. There are no rewards, only the costs of yesterday and tomorrow."

Chris Olson
Chief Content Director


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