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Lessons Learned (and Not Learned) from the 1970s Energy Crisis

Source: https://garystockbridge617.getarchive.net/amp/media/one-of-many-service-stations-in-the-portland-area-carrying-signs-reflecting-c0f70f

In 1973, an embargo by Arab member states of the Organization of Petroleum Exporting Countries (OPEC) sent a shock through world oil supply and prices that would set the stage for the national energy portfolio that we still have today. The result was the doubling, then quadrupling of the per barrel price of oil over the course of a few months. With increased reliance on oil consumption and minimal domestic reserves, shortages at gas stations and among electric producers were commonplace.

Project Independence was a Nixon administration effort to address the energy crisis through negotiations with OPEC nations and domestic energy conservation. Energy conservation efforts included gasoline rationing as well as further developing domestic fuel sources. Several policy initiatives prompted by the 1970s energy crisis are still enforced today, including fuel economy standards and building efficiency requirements.

In the years following the energy crisis, a cultural shift changed the public perception of foreign-produced goods. Racist caricatures of “greedy” and “violent” Arab oil producers became increasingly commonplace and fed into anxieties of foreign economic domination and loss of national assets. These depictions not only focused on the energy industry but also extended to foreign-made vehicles and other manufactured goods. Both supporting and driving this cultural shift was a strong narrative across many forms of media: the fear of the loss of the middle-class, American way of life.

Black activists continuing their work from the early 1960s challenged this discourse. The NAACP highlighted the inaccessibility of middle-class lifestyles (including personal vehicles and larger homes with high energy use) for most of the American public. Mobilization around energy policy at the time challenged the notion of mass conservation and stressed the irony of asking energy-poor households struggling to pay for basic needs to turn off their lights for the greater good. The reforms that followed the energy crisis placed a further disproportionate burden on Black, Brown, and low-income households by entrenching pre-existing inequities in housing and employment.

Lessons learned from the 1970s energy crisis depend on who is asked. For some, it demonstrated the value of substituting energy supply with efficiency resources to conserve. Amory Lovins, founder of the Rocky Mountain Institute, advocated eliminating all U.S. oil imports, stating: “if we spent as much to make buildings heat-tight as we now spend in one year on the military forces meant to protect the Middle Eastern oil fields, we could eliminate the need to import any oil from the Middle East.”

Overall, the 1970s energy crisis serves as a critical lesson in how fuel-price volatility can drastically affect energy supply and household energy costs. As more states pursue economy-wide decarbonization, processes like electrification and renewable energy generation can hedge against future price volatility. With lessons learned from this historical crisis and modern options like renewables and storage, future energy shortages can be managed proactively and more effectively.

Sagal Alisalad

Researcher


This is a part of the AEC Blog series.

tags: Sagal Alisalad
Tuesday 05.27.25
Posted by Liz Stanton
 

Energy History: The Steam Engine, the Industrial Revolution, and Imperialism

Significant inventions in energy history cannot be viewed in isolation from the socioeconomic and cultural shifts that precede and accompany them. This blog series will explore technologies and innovations in the energy field that have prompted life-altering societal shifts and massive policy changes.

Modern technologies can spark massive economic growth, but they also carry significant human costs that ripple throughout society. This narrative dives into how the steam engine played a key role in Britain’s colonization of South Asia.

One of the earliest versions of the steam engine was developed by Thomas Newcomen in 1712. It took advantage of steam power to create continuous motion by drawing steam into a cylinder, or piston, and quickly cooling that steam with cold water to create a vacuum that pushes the piston that pulls a weight. Originally designed to pump water from underground mines, Newcomen’s invention accelerated coal production in England by allowing deeper access to mines previously blocked by water.

Image source: Lira, C. Michigan State University. “Newcomen Atmospheric Engine Description”. 2006. Available at: https://www.egr.msu.edu/~lira/supp/steam/newcomen.htm 

This innovative equipment allowed for a major expansion in England’s energy industry by improving its ability to meet growing coal demand; nevertheless, the Newcomen steam engine was extremely large, expensive to operate (with a thermal efficiency of roughly 0.5 percent), and not particularly useful in a non-coal mining context. Newcomen’s steam engine predated railroads, so each unit had to be constructed locally with materials and fuels transported in by the island’s canal network and horse-drawn wagons. The Industrial Revolution prompted improvements in the Newcomen engine—most notably by James Watt, who developed a separate cooling chamber that increased the steam engine’s efficiency by roughly 2 to 5 percent. By 1782, Watt’s improved steam engine was not limited to mining. The result was increased production of goods in locations where water power was not available. Once adapted for rail and ships in the 1800s, the coal-fired steam engine expedited and expanded overseas trade of raw materials, finished goods, and people.

Source: Royal Museums Greenwich. N.d. “Ships and steam power”. Available at: https://www.rmg.co.uk/stories/topics/steam-power

New technology amplifies the effect of conventional work. Just as the creation of the internet led to the growth of online shopping, ultimately shifting patterns of individual consumption, the spread of the steam engine created “industrial unrest” that affected labor structures at a local and global scale. For instance, the steam engine resulted in a boom in English textiles, which was aided by a series of British economic policy choices, particularly the ban of Indian textiles in the late 1700s. While growth in England’s textile industry drove rising demand for raw cotton from India, by the first half of the 19th century, Indian cotton revenue declined by a third. This trade imbalance, combined with taxes and undervaluing traditional textile practices, prompted an uprising against the British East India Company in 1857. This unrest was a catalyst for the beginning of the formal British direct rule in India, or the start of the British Raj under Queen Victoria. 

When viewed in isolation, the steam engine is an invention that improved productive efficiency and allowed for more work to happen with less human power. But when considered holistically, steam engines were the catalyst for a vast shift in energy use, labor forces, political and economic spheres, and cultural and linguistic patterns. A close analogy for the digital age might be data. Applied to essentially all aspects of life, our reliance on modern communications technologies not only affects the global economy but has profound social impacts. In the last three to four decades alone, data has fundamentally transformed the way communities and individuals interact with one other.

Sagal Alisalad

Research Fellow


This is a part of the AEC Blog series.

tags: Sagal Alisalad
Thursday 09.19.24
Posted by Liz Stanton
 

It’s Getting Hot in Here: Impacts of Drought

Reproduced from: National Oceanic and Atmospheric Administration. 2022. “Drought Monthly Outlook.” Data Snapshots. Available at: https://www.climate.gov/maps-data/data-snapshots/data-source/drought-monthly-outlook

This Summer, as temperatures rise and precipitation decreases or remains unchanged, much of the western half of the Lower 48 is at high risk for intense drought. According to the National Oceanic and Atmospheric Administration’s (NOAA) monthly drought outlook, conditions are forecasted to improve or stay the same on the Atlantic coast and parts of the Great Plains and Pacific Northwest regions due to below-normal temperatures and above normal precipitation through June 2022, but while conditions in the rest of the continental United States worsen.

Persistent or worsening droughts can cause decreased streamflow, dry soils, and large-scale death of vegetation. These conditions increase the potential for wildfires that spread more rapidly, burn more severely, and are more costly to suppress. Based on the National Integrated Drought Information System’s (NIDIS) recommendations, prescribed burns can reduce the potential for wildfires by thinning the amount of vegetation available to ignite. However, with this method, local air quality deteriorates severely. In regions with large swaths of farmland that are vulnerable to wildfires, like the San Joaquin Valley in California, poor air quality from agricultural burns is particularly harmful for residents’ respiratory health. While wildfire prevention and coordinating evacuations are crucial in drought conditions, there is a long-term need to consider how the related damage to air quality will affect millions of people this Summer and in the coming decades.

Sagal Alisalad

Assistant Researcher


This is a part of the AEC Blog series

tags: Sagal Alisalad
Wednesday 06.22.22
Posted by Liz Stanton
 

Changes to PJM's Capacity Market: What is the Impact on Consumers?

PJM’s capacity market results in higher-than-necessary electric bills for consumers as a result of two problems: (1) high clearing prices, and (2) over-procurement of capacity. When high clearing prices appear in a capacity market, they are a reflection of overestimating customer demand and generator costs—which ultimately get passed on to utility customers. As discussed in our recent report on PJM’s capacity market, over-procurement occurs when the grid operator overestimates its peak demand and cost of new generation (or “net CONE”), resulting in avoidable spending on additional capacity payments and generator investments and, as a result, extra costs charged to customers.

In the past year, PJM capacity market rules have experienced significant changes affecting customer bills. For instance, the latest revision to the PJM’s Minimum Offer Price Rule (MOPR) in September 2021 changes how the floor price that generators receive for capacity is determined for various resource types, which also impacts the price of electricity on customer bills. The most recent change came on January 20, 2022 when the Federal Energy Regulatory Commission (FERC) ordered PJM to halt the use of an adder used to raise generators’ expected costs in its 2023/24 capacity auction. According to FERC Commissioner Richard Glick, methods to maximize prices in PJM’s capacity market conflict with FERC’s regulatory mission:

“Sometimes I felt like we were just making stuff up in order just to increase prices...It's important that we go back to basics and figure out what is truly just and reasonable and not focus extensively on bolstering uneconomic generation.”

FERC’s January 20th order targets the 10 percent adder used in calculating generators’ fuel cost risks; without the adder, capacity charges on customer bills should be lower. Estimated fuel cost risks are used in PJM’s methodology for calculating the cost of new generators (called “net CONE”) and impact the price generators receive in the capacity market. The 10 percent adder raises costs to consumers by: (1) increasing generator bids which, in turn, increases the clearing price, and (2) inflating the demand curve (due to a higher net CONE) which results in increases to both the clearing price and cleared amount—all of which gets passed on to consumers as higher electric bills.

What concerns remain after these substantial changes? For the issue of high costs to consumers, FERC’s order removing the adder should have the effect of lower capacity charges on customer bills, but it’s complicated. As long as PJM overestimates demand in constructing its capacity market, over-procurement of capacity will persist. “Fat market” conditions due to over-procurement allow power plants to remain online (as well as new ones to be built) despite being uneconomic and not needed to provide reliable electric service for meeting peak customer demand. The impacts of over-procurement could be resolved by PJM reconsidering its methodology for estimating future demand and by implementing changes in market design to address the concerns of communities in close proximity to power plants. Actions, such as FERC’s January 20th order, act to lower PJM customer bills, but there is still more that needs to be done to eliminate flaws in PJM’s capacity market design that have kept uneconomic, unnecessary generating capacity online across the PJM region.

Sagal Alisalad

Assistant Researcher

Joshua Castigliego

Researcher


This is a part of the AEC Blog series

tags: Sagal Alisalad, Joshua Castigliego
Monday 02.14.22
Posted by Liz Stanton
 

No Idling Allowed: Electric Vehicle Policies and Development

Filmmaker and environmentalist Chris Paine’s Who Killed the Electric Car?—a retrospective documentary released in 2006 on the rise and, at the time, fall of the electric vehicle (EV) industry in the early 2000s—raised some controversial points that are still relevant to today’s EV market. Paine makes the claim that General Motors, one of the largest car manufacturers in the country, intentionally sabotaged its original EV model, the EV1, out of fear of market repercussions. General Motor’s main argument for discontinuing the EV1 was a common myth in the automobile industry: Low customer demand for all-electric vehicles make EVs a “worthless” niche to pursue as a company. But what if producers had an incentive to expand manufacturing to include EVs?   

Soon after President Biden took office, he signed an executive order to replace all government vehicles (include USPS) with electric vehicles. Since then, President Biden has made efforts to increase electric vehicle charging infrastructure with large funding opportunities from the Department of Energy, among other government agencies. In the last month, President Biden pitched his $174 billion EV proposal in the heart of the car manufacturing industry in the United States—Michigan. In addition, Senate passed a $3.5 trillion budget framework on August 11, 2021, that includes funding to make EVs more affordable for consumers, including a public charging network and financial incentives.

EV Parking.jpg

Lowering greenhouse gas emissions relies not only on making EV charging infrastructure available but also on getting more EVs on the road. Consumer Reports analyzed EV production plans by vehicle producer, including big names like Ford Motor Company, Volvo, Honda, and General Motors. Among its findings: Jaguar plans to be all-electric by 2025, the United Kingdom will ban diesel- and gas-powered cars affective 2030, and General Motors will become completely carbon neutral by 2040. Individual companies setting targets, however, will not be enough for a timely fleet turnover—the International Energy Agency determined that governments will need to accelerate decarbonization policies to meet their climate goals, which will involve extensive upgrades to the transportation sector.

While EVs make up 4.6 percent of car sales around the world, and more than 20 countries have electrification targets or planned bans on internal combustion engines, in the United States there are no federal targets for EV sales. Instead, states have taken the lead and incentivize businesses and consumers to make the switch from conventional internal combustion engines to hybrid and battery-operated EVs. As consumer demand for EVs increases over time, auto manufacturers must abandon the idea of EVs being a “small niche market” to promote turnover of combustion engines, facilitate meeting climate goals, and to achieve the target of half of all new domestic vehicle sales being electric by the end of this decade.

Sagal
Alisalad
Assistant Researcher

Myisha Majumder
Research Assistant


This is a part of the AEC Blog series

tags: Sagal Alisalad, Myisha Majumder
Friday 08.13.21
Posted by Guest User
 

The Urban Heat Island Effect and Equity

A recent study published in Nature Communications found that Black, Indigenous, and People of Color (BIPOC) are disproportionately in census tracts with higher heat island intensity. Heat islands are defined as areas that experience higher temperatures than the surrounding areas. This is often in urbanized areas with large infrastructure, like buildings and roads, that lead to an increased sunlight intensity. In contrast, areas that are more suburban or rural have more green space, which helps with cooling temperatures.

Bloomberg’s CityLab reported that access to green space in cities is directly related to income and higher education, both of which are, in turn, associated with an increase in green space. The Nature Communications study found that in 169 of the 175 urban areas analyzed disparities in heat island effects were dependent on race. A higher exposure to heat leads to drastic health outcome, which already disproportionately impact marginalized communities. Heat impacts pre-existing conditions, like heart and lung disease, diabetes, and asthma.

anthony-delanoix-VDS8ASoyzjw-unsplash.jpg

In the hottest parts of Boston and its adjacent cities (Chelsea, Everett, and Somerville), daily temperatures can be 20 to 50 degrees hotter than nearby suburban areas that have more tree and vegetation coverage—like Melrose, Arlington, Newton, and Brookline. Building colors and types of infrastructure also play a major role in the heat island effect: dense urban areas with an aging housing stock and multi-story buildings, often made of brick and stone, retain heat collected throughout the day. While replacing asphalt with rubberized surfaces on children’s playgrounds is beneficial in preventing injury, black or dark blue playground surfaces can heat up to about 96 degrees on a sunny day in the mid-70s. While some cities are investing in long-term cooling plans, there are some setbacks. For instance, the City of Chelsea planted 2,000 trees between 2013 and 2017, but roughly 30 percent of the trees died within a year of planting. This is partially due to methane gas distribution system leaks nearby the affected trees.

Urban heat islands are often a result of racist systemic practices, such as redlining (where neighborhoods and communities are denied services as a result of racially discriminatory practices) and underfunding of marginalized communities. A study in the journal Climate found that 94 percent of the cities studied had higher land-surface temperatures in formerly redlined areas compared to non-redlined areas. To this day, Boston is still quite segregated, and like other cities in the United States, urban heat islands are strongly correlated with public disinvestment and systemic racism.

sagal.jpeg

Sagal
Alisalad
Research Assistant

Myisha Majumder
Research Assistant


This is a part of the AEC Blog series

tags: Sagal Alisalad, Myisha Majumder
Wednesday 07.14.21
Posted by Guest User