It is cheaper to save energy than make energy: August 2011

Take the pledge now to conserve energy:

World will be forced to conserve energy this time

World will be forced to conserve energy this time

This time it is different. True, this is an oil shock akin to those that struck the world economy in the 1970s, for the price of oil -- even allowing for inflation -- is now a lot higher than it was at the 1979 peak. Those shocks pushed the world economy into two recessions, in the mid- 1970s and the early 1980s, and helped drive inflation into double digits in most of the developed world. Unemployment soared as interest rates were raised to try to curb inflation. But then the oil price fell back again as new fields came into production and countries made a start on conserving oil.
So will the surge in the oil price have similar consequences this time? It is a tough judgment because we don't know how high oil will go, but it looks likely that this oil shock will have a less damaging impact than in the 1970s. However, since the price is unlikely to fall back as far, it will have a more lasting impact on our way of life.
Since oil is the largest single source of global energy, larger than natural gas or coal, and far larger than nuclear or renewables, a rising oil price pushes up the price of everything, including food. That squeezes living standards still further.
As a result some countries may well be pushed into recession. There is a good chance that will happen in the US and maybe here in the United Kingdom, though in both instances the prime culprit would be the end of the housing booms. The surge in the oil price just happens to come at a very bad time. But even if this does happen there are a number of reasons to suppose that the world will continue to carry on growing, despite the pressure from oil.
One, of course, is the size of China in the world economy. Last year for the first time it added more demand for oil to the world than the United States. Demand from India, Russia and other large economies is strong too.
The high oil price speeds up the shift of power from the "old" developed world to the "new."
Another is that inflation, while rising, is far lower than it was in the 1970s or indeed the 1980s. So there is much less need to crunch it down with high interest rates.
Still another is that the world is much better at conserving energy than it was 30 years ago. We use roughly half as much energy to produce a unit of GDP now than in the 1970s. But if we can probably cope better, we should not expect cheap energy to return for two main reasons. One is that demand from China, India and other fast-growing economies will remain strong: their growth will offset their efforts to conserve energy. The other is that there is no longer spare capacity; some geologists believe we may be close to peak oil production. Whether that proves right or not, there is certainly no easy oil to find and while alternatives such as biofuels are being developed they will take years to make a material difference.
In a way, though, this is good news. This time the world will be forced to continue its efforts to conserve energy. The market will drive us to reduce our carbon emissions. Many would say: about time too.

Small businesses conserve energy to curb costs

That means lights out at nighttime and fryers off during off-peak hours

NEW YORK - The lights go out at night after the last wash at Jim Whitmore's five coin laundries — no longer does he use a fully lit store as advertising. And at Todd Waldemar's Wing Zone store, he's shutting down some of the fryers during off-peak times.

Small business owners are getting pinched by the soaring prices of oil, gasoline and other fuels, eating into their profits as they gas up vehicles, heat and cool their premises and run machinery. Often, they turn to commonsense solutions to save energy and money.

For example, no longer flooding a store with light at nighttime.

"We used to use it as a way to advertise our stores — people drive by at night and would see clean stores," said Whitmore, whose laundries are in the Boston area. He said his energy costs have gone up 10 percent to 15 percent in the last year.

Small businesses have had to become creative and smarter to cut energy costs. Companies that do a lot of deliveries as part of their business — florists, for example — have been reducing the number of delivery runs they make each day. They're also using mapping software to find the shortest routes, and making sure vans and trucks are filled as much as possible to capacity.

Many that consume a lot of energy buy contracts ahead of time to get oil or natural gas at a set price. And many business owners invest in more energy-efficient machinery or switch their heating systems to wood or other alternative fuels from oil or natural gas.

Whitmore is in the process of replacing his washers and dryers, and is searching for machines that will use less energy and water, reducing his costs over the long term. He sees a side benefit of going greener: By advertising that his laundries are more environmentally friendly.

"Hopefully some of it will flow to the bottom line and help pay for the new equipment," he said.

At Ranch Rudolf, a resort in Traverse City, Mich., owner Sid Hamill has replaced most of his heating system with a wood-burning furnace. He estimates it's saving him between $10,000 and $12,000 a year in fuel costs.

Since his business is located on 195 acres of land, he cuts most of the wood he burns from his own trees.

"The wood works well for me," Hamill said, and estimated that the new heating system "basically has paid for itself."

He's still using some regular fuel, but is hoping that fairly soon he'll be able to switch the entire property to wood-burning energy.

Rising energy costs are forcing some companies to shorten their operating hours — a sacrifice in particular for restaurants that pride themselves on being open 24/7.

Phil Greifeld, chief executive officer of the Huddle House restaurant chain, said the company is allowing its less-profitable franchisees to close at midnight, although Huddle House has advertised itself as "always open, always fresh, 24 hours a day."

"There was a lot of internal debate about it, but it's a good thing we did that in terms of helping people to control their costs," Greifeld said. The result: Those restaurants that are closing at midnight are making more money.

Other steps Atlanta-based Huddle House is taking include reconfiguring its seating arrangements, to allow restaurants to accommodate more customers and increase their volume. The company, which has 440 restaurants in 17 states, is also working with equipment manufacturers on burners that turn the gas on when a pan is placed on the stove and turn it off when a pan is removed.

"It really does add up" in saving money on energy, Greifeld said, and added about cutting costs, "it's something you have to work on day in and day out."

While businesses try to cut costs as much as possible, most are ultimately forced to pass some of the higher energy prices on to customers. Delivery charges are going up, manufacturers are repricing their goods and restaurants are raising their menu prices. Generally, small business owners say their customers understand — energy prices are going up for them as well.

Waldemar uses independent delivery drivers for his Norfolk, Va., Wing Zone stores, and they're asking for more money per trip. "Eventually, it's passed on to the consumer, because that's how it works," he said.

But Waldemar is also contending with rising fuel costs for cooking the chicken wings and other food he sells, plus higher electricity prices. He estimates that his propane costs alone have risen 30 percent to 40 percent over the past year.

So, one solution is to turn off unused fryers during down times.

"There's only so much I can do," Waldemar said.

He's also looking at more fuel-efficient equipment as he plans to expand. He has two stores now, and plans to open one more in January and another in March.

Raising prices isn't easy, though, for many small business owners, because of the competition they face. Whitmore noted that his pricing is expressed in minutes — the number of minutes a customer gets of dryer time per quarter. He can cut the drying time only so much before customers, who tend to be lower-income and not able to pay much more, might go elsewhere.

"We're in a competitive market, and our competitors are not always eager to play ball," he said.

More businesses embrace greener commuting

Employee incentives sometimes include free bikes or monthly prizes

High gas prices and the ongoing concern for the environment have prompted an increasing number of environmentally sensitive businesses to focus attention outside of the workplace and on those carpool lanes, bike lanes and even sidewalks.

Many businesses are now encouraging and rewarding employees who use alternate forms of transportation to get to and from work. For some companies, it means paying the daily fares and footing the bill for mass transit for their employees. Other companies are rewarding carpoolers with prizes such as gift cards to local businesses.

While carpooling has attracted fewer than 8 percent of the nation's daily commuters, vanpooling has emerged as another option, with companies hiring vans, designating a driver (or rotating drivers) and giving commuters the opportunity to relax en route to the office. According to the Santa Barbara County Van Pools in Southern California, riders pay anywhere from $100 to $175 per month, depending on the distance to and from the destination, which typically beats paying for gas. In some cases, companies are setting up their own vanpools, such as those used by Safeco Insurance, which offers incentives to employees who use any of the 80 active vanpools that are set up throughout the country.

Biking to and from the office is also gaining popularity: "We give out a bicycle to everyone who has worked at the company for at least one year," says Bryan Simpson of New Belgium Beer in Fort Collins, Colo. The environmentally driven brewery, which runs on the power of wind turbines, has seen more employees biking than your average brewery and even hosts a philanthropic bike festival called the Tour de Fat, which celebrates bicycling as a viable form of transportation.

Encouraging 'greener' commuting
Joshua Scott Onysko, founder and CEO of Boulder, Colo.-based Pangea Organics, who also gives mass transit passes to employees, sat down with his staffers to determine what else could be done to encourage "greener" commuting. "We found that a lot of people would bike to work but needed a place to change and dry off," explains Onysko. "We responded by turning 500 square feet of our facility into lockers and showers for employees biking to work."

For those who are not avid bikers, there's always another basic, earth-friendly alternative. "I walk to my office every day," says Kelly LaPlante, founder of Kelly LaPlante Organic Design in Venice, Calif. "In fact, everybody who works for us, more than part time, is within walking distance. We prefer people who live close to us who can walk to work. It helps us decrease our carbon footprint," says LaPlante, adding that the company certainly wouldn't turn anybody away who is talented just because they're not living nearby.

Along with providing incentives and amenities for bike riders and walkers, it behooves a company to initiate alternative commuting. With that in mind, RideSpring, a Santa Cruz, Calif., company that matches commuters online offers rewards to individuals for their "greener" commuting efforts. "The most popular place to organize a carpool is at work, but very few companies have a system in place to help people find matches," says RideSpring founder Paul T. McGrath.

With that in mind, RideSpring sets up specific password-protected Web sites for companies where employees can post and find ride information and subsequently win individual monthly prizes, such as $300 toward REI purchases or $400 toward Apple goodies, simply by using alternative means of commuting. In addition, RideSpring compiles trip-reduction statistics on a daily basis so that business owners can evaluate the effectiveness of their programs.

"[RideSpring uses] a formula that essentially gives us the number of commuting miles saved, gas saved and reduction of CO2 emissions. This allows us to tell our employees how much they are helping the environment so that they can continue to use the RideSpring program," explains Mark Parnes, assistant general counsel and green team member at the Palo Alto, Calif., office of the law firm Wilson Sonsini Goodrich & Rosati. The firm has seen a positive response to its RideSpring incentive program.

Transportation alternativesTo get started with a green commuting program, companies can do their own workplace commuting evaluations. "Companies can do workplace transportation audits to look at what infrastructure and policies are in place now and see where changes can be made to help develop green commuting action plans," says Jessie Klassen, coordinator of workplace transportation for Resource Conservation Manitoba, a nonprofit center for applied sustainability based in Manitoba, Canada.

According to Klassen, who helps businesses develop such green commuting plans, one of the principal reasons that commuters shy away from greener modes of transportation is the inconvenience of not having accessibility to a car during the day.

This problem is being addressed by Zipcar, which merged with Flexcar in October 2007. The company provides low-emission, fuel-efficient vehicles that can be conveniently parked near any business and ready for whoever is signed up and holds an access card. Companies that sign up can have employee rules in place for using the "instant car" for which they are charged an hourly rate, which includes gas, insurance and maintenance. Such easy access to a car can provide peace of mind for those employees who are uncomfortable about not having an available vehicle in case of an emergency, such as a call from their child's school.

Slowly but surely, companies are making efforts to entice their workforce to make the switch to alternative transportation. Even communities are jumping on board. For example, Boulder, Colo., features the annual Bike to Work Day Business Challenge, pitting businesses in different size categories against one another to see who can have the most employees pedal their way to work. Meanwhile, in Central Oklahoma, there is also a Bike to Work Day; in Santa Barbara, Calif., there's Bike to Work Week; and according to the League of American Bicyclists, May is National Bike Month, with biking events scheduled in various states throughout the month.

Tuesday, August 9, 2011

Take the pledge now to conserve energy:

World will be forced to conserve energy this time

Small businesses conserve energy to curb costs

More businesses embrace greener commuting