Talk to the Policymakers
Dear Editor:
I cannot argue the facts regarding world oil reserves. The eventual end of our oil supply is a given, as no more is being created. While we can debate when the end will come, we cannot deny that it will come.
However, the tenor of your editorial (Don?t Be Crude, December) leans in the same direction as the Y2K Chicken Littles who claimed the world was coming to an end at the stroke of midnight. It did not happen then, and it will not happen when oil runs out.
As you yourself indicated, companies such as British Petroleum are diversifying into renewable energy fields. They see the handwriting on the wall, and market pressures are the surest method for encouraging change. Just as industry could not afford the catastrophe predicted for Y2K and thus made the necessary investments to avoid it, the energy producers and consumers of today will make that same investment.
For those who feel that changes are not happening fast enough, it is easy to call for government regulation. The statement that Washington is "fight(ing) electric cars" is hyperbole?Washington is fighting the requirement that auto manufacturers sell electric cars. There is a vast difference. Would you be as supportive of government regulation if they required your publication to include articles that you felt were inappropriate for your editorial purposes? If there is a market in California for electric cars, they will be appear in the car show rooms.
Additionally, you seem to be totally unaware of the fact that electric cars and hybrid cars are currently available. May I suggest you check out your local Toyota or Honda dealership? Those are just front-runners?more will be following because the market will demand it, not the government.
You state that "individuals and private enterprises who want to address (alternate energy sources) are on their own." That, indeed, is as it should be. Take a deep breath and relax. The world will adapt to our available energy resources without coming to an end?even without government regulations.
Ray Miller
Cost Engineer
Aurora Metals Division, LLC
Green and Purple Money
Dear Editor:
If I were to offer to sell secure bonds for $100,000 with the assurance that they would yield an annual return of $25,000 per year for the next ten years, I would need a security team to maintain order in the line of frantic buyers, given the current economic climate.
However, if I were to offer the CFO or CEO of most organizations the opportunity to invest $100,000 to reduce annual energy costs by $25,000 per year for the next ten years, most of them would say, "Thank you very much. We will take this under consideration." But the project would never see the light of day.
Perhaps there is an intrinsic character flaw that gives American decision makers a blind spot. Or, perhaps it is insufficiently manly to be concerned about reducing energy consumption. Or, perhaps ¿¿the list goes on.
Let me cite some examples that I have recently observed:
The president and CFO of a university, who would have leaped at the opportunity to find bonds yielding 5% for their shrinking endowment fund, chose to "postpone" an energy conservation project which offered a four-year payback because their budget was too tight.
A major U.S. corporation was presented with a proposal to reduce its energy consumption at a major facility by $350,000 per year with a payback period of 3.8 years; they are considering performing some deferred maintenance instead.
A major hospital specified that energy conservation projects would not be considered unless the simple payback was less than 3 years.
In a desperate effort to explain this bizarre behavior by otherwise solid, respected corporate citizens, I have developed the following hypothesis. There are two kinds of money: green and purple. Real investment decisions are made with green money. Professional money managers carefully calculate of rates of return and establish priorities for projects involving green money. However, there is also purple money, and energy bills are paid with purple money. Saving purple money is not important because purple money does not impact profit and loss statements. Evidently, expenditures to achieve energy cost reduction require green money for implementation, but the money saved is only purple money. Therefore, the savings don¿t count. Consequently, the implementation cost of energy conservation projects is viewed as an expense (to be avoided) rather than as an investment (to be embraced).
This theory would explain the apparently irrational behavior that governs decision-making for energy-efficiency investment in our country.
Joel M. Levin, Ph.D.
