Energy Circle : Thinkers

On the Language of Saving Energy: In Defense of Energy Efficiency.

Peter Troast — Fri, 16 Jul 2010 16:02:36 +0000

Last week David Fenton, an icon of the progressive communications world, gave a talk at the Department of Energy entitled “The Language of Saving Energy.” The arc of the speech was that we need to change the way we talk about home energy efficiency, an argument supported by two key premises. First: in order to spur broad utilization of home energy efficiency programs and incentives, we need to start using language that speaks to the core values of all Americans, and not just to “true believers” or industry insiders. The second: we need to bear in mind the power of repetition as a branding device. We need to settle on a set of terms that speak to Americans’ core values, and we need to drive them to the point that they penetrate our collective subconscious and become part of our everyday lexicon. We need to be more like the right--encapsulating big issues into sound bites like “death panels” and “clean coal.” Only then will we get to the point where we need to be as an industry.

Both very strong, very poignant arguments. We’ve repeatedly visited the problem of branding and language in the energy sector, and acknowledge that settling on a set of powerful, simple terms will be key to energy efficiency achieving real market penetration. What was disappointing about the speech was that an icon like David Fenton fell into doing what too many of us are doing these days: talking about what’s wrong, shooting holes without acknowledging what’s being done right, and not proposing concrete, serious alternatives.

Fenton’s is a long (and thoughtful) piece that’s well worth a read, but here’s a summary of the terms he doesn’t like, and why:

Energy efficiency: “Cold, heartless, unemotional.”
PACE: “I’m asleep already.”
Retrofit: “Retro isn’t looking forward.”
Green Collar Jobs: “Men don’t want to wear green collars.”
Green homes: “The guys will not go for this one.”
Climate: “Only for true believers.”

He also falls victim to the ad agency love of the campaign. He’s very proud, justifiably, of their own work: “What would Jesus Drive?” and “Give a Swordfish a Break,” but fails to recognize the industry’s need to describe itself on a more fundamental level. After all, long before the “What would Jesus drive?” campaign, the term “hybrid” was settled upon by industry insiders.

In particular, I think he’s wrong on energy efficiency. There is broad evidence that energy efficiency, both as a term and as a concept, is working. People hate waste; and, especially in these economic times, the idea of saving money every month is one that most of us, true believers or not, can get behind. A Reuters piece this week, Energy efficiency is new green for US homebuilders, describes how major players in the production homes industry are adopting energy efficient features as a competitive advantage over the re-sale market. This is the market speaking, seizing on the trend that buyers today are become more cognizant of a home’s operating cost.

On a more fundamental level, we’d suggest that energy efficiency is more consistent with core American values than Fenton would have it. He allows that it’s a business term (“It’s a beautiful concept to engineers...”), while suggesting that that’s not something most Americans can identify with. We respond: Americans are business people. We’re engineers. We’re industrious, self-reliant, innovative and thrifty. Energy efficiency reflects these values beautifully, without nonsense, without moral or emotional hocus pocus. His references to George Mason University Professor Ed Maibach’s social marketing research seems spot on for energy efficiency--that people change behavior based on functional (I’m saving money), self-expressive (I’m doing my part) and self-evaluative (this is the right thing) benefits. For these reasons, we’d say, the term can, and should, stick around a while; and it’s one that we should all rally behind without reservation. For our part, we’ll continue to use it, and continue to use it, and continue to use it, until we get the job done.

And, most importantly, let’s all commit ourselves to finding POSITIVE solutions. The terminology and language of our industry is fair game, of course, but be mindful of the cumulative effect of all this negativity. The topics of energy and climate are sufficiently complex. We face enough hurdles. No more term bashing without constructive alternatives. OK?

The Mallet Deep Energy Retrofit--My View on the Historic Preservation Debate

Margaret G Myers — Thu, 08 Jul 2010 22:17:28 +0000

The Community Center in Freeport, Maine, is a beautiful building which comprises newly renovated 53 and 55 Depot St - 2 of Freeport’s fabled “Mallett Houses”, homes built by Freeport entrepreneur E.B. Mallett at the end of the 19th century. 57 Depot St., also owned by Freeport Community Services, however, remains a creepy, rundown, empty shell of a building. As an intern at the FCS Thrift Shop, I’ve had the opportunity to see for myself the inside of 57. The house is currently a mess, but it’s also not hard to imagine the relative splendor that it once was. The front room still boasts original plaster, molding, and doors, the detailing on the outside was obviously once gorgeous, and though completely void of plaster, the upstairs rooms still hold a certain elegance.

When I started my second internship, at Energy Circle, I was excited to find out that Peter was championing a deep energy retrofit of the house I’d been so taken with. (Deep energy retrofit meaning a reduction in energy use by more than 50%.) Achieving this level of reduction comes largely from superinsulation--the practice of adding substantial insulation to entire building enclosure--walls, roof, and basement. In order to preserve the inside of the home, the decision was made to insulate outwardly, carefully removing and saving as much of the current siding as possible (most of it, to my eye, appears to be beyond repair), adding insulation, and then reconstructing all of the exterior detail just as it was originally built. This will result in the volume of the house being roughly 4 inches more than it currently is, which does not bode well for the historic preservation review. Because Freeport’s Mallet Houses are eligible for listing in the National Register of Historic Places, the project requires historic review before any changes can be made. The complex process is just getting underway, but there's a lot of buzz around the community center that in the name of historic preservation, the deep energy reduction may get stopped in its tracks.

Here's my view of the historic preservation versus deep energy reduction debate: The purpose of a deep energy retrofit of this scale, on this historic building, is far bigger than just to save money and energy. By completely retrofitting this structure, and, more importantly, sharing how we’re doing so, we will be able to show that it can be done. We can work to combat climate change, we can find reasonably affordable ways to make changes to existing structures. Beyond that, and without waxing too philosophical here, there is something paradoxically beautiful about a simultaneously historic and “new” building.

In my opinion, a building can be “historic” without being made of historic materials. The retrofit aims to keep completely the elements of the home that are indicative of the time they were created in - the chimneys, the molding, the waist flare, and bay window - to name just a few. I find this an extremely respectful ode to the home. And when I consider the alternative, which is essentially to let the building sit for a few more years, and then make “less aggressive” modifications, I am even more sold on the idea of a deep energy retrofit. What better way to honor the past than to ensure that a piece of it will remain a solid, energy efficient building far into the future?

It’s easy to think about “green” construction and energy efficient building only in terms of new structures - but the Mallet House can, and will, serve as an example of how important it is to make improvements to existing structures.

Is Saving Energy Bad or Good? And Why That's the Wrong Question to Ask

Tom Harrison — Mon, 28 Jun 2010 17:39:59 +0000

Almost everything we do as humans has some negative impact on the planet -- this is not a diatribe against humanity or anything, just a fact. In moderation, the planet can easily respond to our impacts, as it does with most other living things and did successfully for a good long time before we people got to be all industrialized. Our current impact is no longer moderate, and a few of us are thinking about ways to reduce our impacts so our earth can do its thing again. I hope you're one of them.

Us people tend to think in absolutes -- "bad" or "good," rather than "better" or "worse". There are many things that are good that we do. But we have to accept that little of our modern lives could be characterized as “good” for the planet. Sorry. I speak the truth.

Several recent comments discuss whether insulating foam (used to) release greenhouse gasses (GHGs) when applied. I am sure there's some nasty chemical process that goes on while creating the foam. I don't know the process, but I don't think it is collected from the tips of unicorn horns :-).

So foam may be “bad”. But if we think about comparison, it's better than the alternative (assuming we’re not spraying it on unicorns, of course).

After I had my energy audit done (good!), I learned that my house leaked like a sieve. All that nasty natural gas we burn to keep warm (bad!) was leaking past all the insulation we had installed some years back because we had no idea that we also had to create a tight house that kept warm air in and cold air out.

So we had our insulation beefed up where it was missing or thin, but by far the biggest change was application of foam around the sill of the house, and in a number of other places where air was leaking out (and in). We did other things to plug the holes, many of them involving just a little caulking. Who knows what bad things were in the materials we used.

However, the result of our efforts was a significant reduction in the amount of natural gas we had to burn to keep the house warm in the winter. As I write this, it is 93 degrees and humid outside, but quite comfortable in our house. I have a Vornado fan going that uses electricity (bad!). No air conditioning (good!).

So if it were the case that my use of foam released some GHGs during application, the foam and its benefits will last for decades, and reduce the amount of fossil fuels we burn to heat and cool. Neither is good; one is better.

Many people have shied away from CFL bulbs because they have (tiny amounts of) mercury in them, which might get released if the bulb breaks. Mercury is "bad". But the irony is that not replacing the incandescent bulb with a CFL results in release of more mercury (and into the air and water, to boot) when we burn coal to create electricity to power the bulb.

My Toyota Prius uses a lithium battery pack that creates environmental harm (bad!). But the car also gets 50 MPG, which (as of last year) is about 2x the average mileage of cars in the US. It will last for 100,000 miles, and thus use about 2,000 gallons less gasoline than a regular car. Even without the BP Oil Spill in the Gulf of Mexico, oil isn't exactly a friend of the environment.

Even environmentalists are confused by this trade-off. None of the groups deny the benefits of renewable energy like wind and solar. But when it comes to siting wind or solar farms, other conflicting environmental goals arise.

Last week, we had a spirited and excellent discussion about the Jevons Paradox (one of the many economic theories which gave the field of Economics the name "the dismal science"). The nut of the idea is that it may actually be worse to improve efficiency than not, and while counter-intuitive, at some level, this has been proven to be true repeatedly. Peter argues, persuasively I think, that the Jevons Paradox doesn't apply to our current energy woes -- in some ways our attempt to apply this theory to the current situation is a case of "bad" versus "good" thinking versus "better" and "worse".

We all make trade-offs between bad choices. We need to become educated about which choices are relatively better. Respecting that people need to make their own choices, and that we all view and see the world differently, our calculation needs to be not what is good or bad, but which is better or worse.

The Jevons Paradox: Time to Send it The Way of the Dodo?

Peter Troast — Mon, 21 Jun 2010 21:02:09 +0000

The Jevons Paradox has been the elephant in energy efficiency's room since energy efficiency was in diapers. It casts a gloomy shadow over the industry, raises doubts about the sanctity of our mission, and the fact that it exists at all is, frankly, kind of a drag.

But here's the thing: energy efficiency is all grown up now, and Jevons is dead. It's Hans Castorp's grandfather-on-the-wall in The Magic Mountain—archaic, mysterious, and useless. Time to move on.

In case you're unfamiliar, the Jevons Paradox was first suggested by William Stanley Jevons in 1865 in a book called The Coal Question, and essentially claims that as technological improvements increase the efficiency with which a resource is used, use of that resource increases rather than decreases. The classic case in point was that when James Watt invented his coal-fired steam engine, which was drastically more efficient than Thomas Newcomen's earlier design, coal became a more cost effective power source, its range of applications increased, and ultimately, coal consumption boomed. Good bye, blue skies.

The same principle has held true for nearly every other major fuel source since. Likewise, in more modern times, the Jevons phenomenon has manifested itself in the growing efficiencies of typical houses (as measured by mmbtu's/sq ft), that have been offset by—guess what—larger houses. (This may be changing; see below.)

But while it continues to be broadly accepted as an economic principle, we think there's growing reason to question the validity of Jevons in a new era, and certainly good cause for those of us in the energy efficiency business to stop talking about it as though it were an immutable law of nature. Here's why:

1) It's no longer the height of the Industrial Revolution. James Watt was born in 1736. Times have changed (needless to say, but we'll say it).

2) Times have changed more recently, too. The housing boom is over. Americans are no longer looking to get rich quick (or feel rich quick) by investing in bigger, badder, further out of town houses. As Warren Buffett wrote of housing in his 2009 shareholder letter, "prices will remain far below 'bubble' levels..." I question whether those days will ever return.

3) Today's economic environment is uniquely bad, and, despite our highest hopes, may stay so for some time; so the trend of increased consumption that's carried on for the past 50 years may be grinding to a halt. As Nobel-prize winner Paul Krugman predicts, things "could be unpleasant for a very long time."

4) Demographics are changing. Today's generation, the "Echo Boomers," is big, and entering the home buying years, but not as wealthy as the baby boomers. They like to spend money, but maybe not quite as much as their parents. And perhaps more importantly, research suggests that today's up-and-coming, soon-to-be-home-buying generation is the most socially conscious, environmentally driven generation in recent history. I'm hopeful that this is the renovation generation, less concerned with real estate flipping, more committed to quality of place and the impact of their housing on the planet.

5) Houses are no longer growing. While increased efficiency in homes over the past 30 years was offset by bigger homes, what we're seeing in the post-bubble housing market is a veering away from McMansions in favor of smaller, more affordable, more efficient homes.

6) Energy prices are growing faster than incomes. Despite the energy price hiccup of the last couple years, the broad trend is that energy prices are on a steady rise, taking into account the recession drop, and even in the absence of shock factors like peak oil or major supply disruptions. The growing disparity, and increase in energy costs as a percentage of family income, means that people will need efficiency just to survive, unless we want to live in a state of permanent recession.

Of course, this is, in the end, an opinion piece, and we'd be tremendously curious what you might have to say about the matter. Let us know in the comments section.

ENDNOTE: Two posts on the topic of energy efficiency versus conservation lit the match for this one. Thanks to Allison Bailes' post on Energy Vanguard and to Sean Lintow's post on the SLS Construction Homeowner's Resource Center Blog. Both highly recommended reads.

What the Oil Spill might mean for Echo Boomers and Energy Efficiency.

Margaret G Myers — Sat, 19 Jun 2010 14:59:12 +0000

My generation (I’m 19) has been getting a lot of flack these days. We are resistant to entering the “real world”, hesitant to settle down, and spend way too much time on “the internets”. Are we simply unmotivated, or is there logic to our laziness?

Where some see our so called “prolonged childhood” as nothing but a bad thing, I see smart (if tradition-breaking) adaptation to our changing world.

The economic crisis means that we’ve seen first hand that jobs once considered safe bets are now anything but. So maybe instead of entering the workforce, we’ll spend a few more years in grad school. Maybe instead of finding our own place just for the sake of it, we’ll spend a few more years living with our parents. (Speaking of parents, 50% of ours got a divorce. With statistics like that, why wouldn’t we be afraid to marry?)

And how does this play into energy efficiency? Much as the economic crisis and disheartening marriage statistics have changed the way we think about future jobs and relationships, I think the oil spill will prove to be a turning point in how we “echo boomers” think about energy.

Our collective reaction to the oil spill will take time to evolve. But in the meantime, perhaps it is breaking us from our hypocrisy. We use a ton of energy (I type, guiltily unplugging my already fully charged laptop ...), but we also seem to care, at least on paper. Remember when everyone got excited last November when we all voted? Well, turns out a big reason we did so was because of the environment.

“Fully 64 percent of these young voters said the environment was ‘very important’ to their vote, compared with 55 percent of older voters, according to a poll conducted by the Pew Research Center in October,” says a Washington Independent article.

Just a glance at any of our favorite social networking sites, such as Twitter, Facebook, or blog sites like Tumblr, proves how interested -- at least superficially, and hopefully seriously -- we are in the spill. And in figuring out ways to right this very big wrong.

Even before the spill, we were touted as the generation that would demand energy-efficient homes, and some statistics show we’ll even pay more for them. That is, if we ever get our acts together and buy them - and that could take some time. Because we’re so hesitant to join the workforce, we don’t have nearly as much money as our parents’ generation did when entering the home-buying market, which means that even if we are looking for a home to buy, finances will be an issue - and some of us aren’t looking at all. Just as we learned and adapted from divorce rates and the economy, we saw the mortgage crisis unfold before our eyes - and we’re not interested in getting involved with a broken system. The demand for houses is just not there right now.

The rest of the country, however, is waiting for us to take the plunge into home ownership, because when we are ready, we’ll be the ones to revitalize the housing market. And when we are ready, there will be a lot of us - which means we’ll need new housing. And the new housing that we need? Chances are really good that homes will be much smaller, and much more energy efficient than the homes our parents wanted when they were first starting out. Luckily, some statistics are showing that slowly but surely, we’re entering the market - but for the most part, we’ll just have to wait and see.

In the meantime, the places where we’re living now are getting more and more energy efficient. College campuses are getting greener, (thanks in great part to efforts like America’s Greenest Campus contest), and even those of us still living at home can make a difference. I, for one, yell a line derived from NBC’s show “30 Rock”, whenever my 17-year-old brother spends too long in front of the open refrigerator: “Decide what you want before you open the refrigerator. You just released enough hydrofluorocarbons to kill a penguin. This penguin!” Well, at least it’s a start...

Energy Efficient Landscaping for Cooling Down.

Margaret G Myers — Thu, 10 Jun 2010 20:19:12 +0000

On cold winter days, a ray of sun streaming into your house can be most welcome - a free source of heat. But what about in the summer, when those rays of sun and other, less-evident solar heat, seep into our already too-hot houses and become a costly nuisance? Well, what happens is that you lose money. But using landscaping (namely by planting trees) to shade your home can be a great way to lower energy costs.

Thanks to (get ready for a big word!) evapotranspiration (big, but not scary: it's just the tree or plant releasing water vapor), air temperatures can be reduced up to 9° Farenheit in areas around trees, which creates a cool microclimate. Adeptly placed trees can cut air conditioning costs in the summer by 15%-50%, and one well positioned tree has the daily cooling effects of five air conditioners running for 20 hours a day. And it's easy to figure out where to place these trees: close to windows!

Shading east- and west-facing windows with trees can reduce costs in any climate, and south-facing windows just need a little more thought. In a hot climate? Go for it, shading will keep energy costs down year round. In a cold or mixed climate? Consider planting deciduous trees so you don't run the risk of impeding welcome solar heat in the winter.

According to the Department of Energy, the average return on investment for landscaping as a means of low energy cooling is less than 8 years. And if you plant trees as saplings, it's likely that they will begin shading your windows within a year, and reach the roof within the next 5 to 10 years (depending on tree species and climate).

But then again, since when did we need to do an ROI calculation for planting a tree?

The Concept of Home Performance—Will We Commit to the Term or Let it Wither?

Peter Troast — Fri, 21 May 2010 19:05:29 +0000

At the Affordable Comfort (ACI) Conference in Austin in April, three giants of the home performance industry sat on a panel describing their business models. They were WellHome, the subsidiary of $7.3 billion MASCO, GreenHomes America, and Recurve, the California contractor formerly known as Sustainable Spaces. I couldn't help but notice, in their generally well-designed presentations, that none was using the term "Home Performance" in their branding.

That's right. At the mecca of Home Performance, the biggest players in the industry seem to have abandoned the term.

Naturally, I stood up and asked about it. The answer came from Brett Knox, President of GreenHomes America, who essentially said: with limited marketing budgets we can't afford to educate consumers on what home performance means. The other panelists, Matt Golden of Recurve and Larry Laseter of WellHome, nodded in agreement. In fairness, Rick Gerardi of WellHome ran up to me afterwards to defend their use of the term. Rick was there, he said, 20 years ago when the term was born. And he assured me that WellHome hadn't completely abandoned it, which is true if you read their fine print.

A couple of weeks ago, I wrote a post that looked at Internet search volume for various energy efficiency terms. It was clear from that research that Brett Knox's point is a fair one: consumers' aren't familiar with the "Home Performance" label, and they rarely search for it online.

So here we are: our industry is poised for massive expansion, thousands of us in every corner of North America are using the term Home Performance, and what we call our business isn't resolved? This isn't good.

Since that meeting, and in our interaction with contractors and auditors across the country, I've been thinking about this dilemma. Home Performance is a long standing concept, conceived by the founders of the industry, and remains, in my opinion, the best way to describe the full range of the whole house approach. As a way of grouping the big 5 benefits of the whole house approach--comfort, efficiency, health, safety, durability--Home Performance is still the best umbrella term. Yet 20 years after its conception, it remains a mystery to most consumers, and even the largest companies in the industry aren't able to invest in the necessary education. So where does that leave us?

I believe that it comes down to knowing where in the selling cycle the term fits. Let's all agree that the day when consumers are saying, "I want Home Performance" is a long way off. But that does not mean it should be abandoned alltogether. When introduced at the right time in the consumer's consideration process, the idea and concept of Home Performance remains a powerful way of communicating all the benefits of whole house and, equally importantly, positioning the energy auditor/home performance contractor as a critical, consultative, long term advisor to homeowers. Here's my best effort so far, in infographic form, to describe this concept:

Overall, the point is that Home Performance as a concept is not driving demand, but when introduced once a homeowner is in the consideration phase, and increasingly throughout the sales and job completion cycle, can be the powerful communication idea that it was originally conceived to be. I consider this infographic a first draft, so please let me know what you think.

One final point, which is the responsibility we all share. Disagree with me if you don't think Home Performance is our core conceptual term--I welcome the discussion. But if you agree that it is our best umbrella term for the whole house idea, then all of us have an obligation to promote the term for our collective good.

TED Talk: Catherine Mohr on Embodied Energy and Green Building.

Will — Fri, 21 May 2010 15:23:41 +0000

TED Talks are always fascinating, and this discussion on the often misunderstood concept of embodied energy in green building is no exception. Catherine Mohr, a self-described geek who works in robotics, begins the talk with a humorous but compelling discussion: when you spill your local, organic yogurt, do you clean it up with a paper towel, a sponge, or a towel? What is the most environmentally friendly option? She then gives extensive data to evaluate all options, and comes to a very important conclusion: "Sometimes the things that you least expect have a bigger effect than all those other things you were trying to optimize."

As you can imagine, the spilled yogurt scenario goes to new heights when applied to building green, and energy in buildings in general. Mohr packs an incredible amount of information and data into this brief, 6-minute video, while keeping it entertaining, and staying focused on what is a very important point: that though there may be "1,001 articles telling us to optimize these little things around the edges," we should take care not to overlook the "elephant in the living room."

We were so impressed we thought we'd share:

Hope you enjoy, and be sure to check out Ms. Mohr's blog about green building.

Water, Water Everywhere: The Rainwater Collection Industry Makes a Stand.

Guest — Wed, 05 May 2010 14:42:54 +0000

By Carl Seville (Green Building Curmudgeon)*

Having little knowledge and less experience in rainwater collection, it was a lucky break for me that the American Rainwater Catchment Systems Association or ARCSA national conference was held in my hometown recently. It was so close, in fact, that I was able to ride my bike to the event. I heard several good presentations from pioneers in rainwater collection with very interesting theories that really made me think. Issues that were raised included the value of rainwater vs. gray-water reclamation; one speaker contended that rainwater was a better value. The cost per gallon to construct a collection system is lower, the systems have fewer problems, the collected water requires less treatment, you can collect more water, and that water has a broader range of uses than gray water. Sounds logical to me, but I bet the gray-water equipment companies don’t like to hear that.

The water/energy relationship keeps coming up

Other points raised that struck a chord with me were that the high cost of deep well drilling sometimes exceeds installation of a rainwater system; that challenges exist in finding qualified managers and installers for new systems (complicated and cutting-edge technology is very susceptible to failure when not properly managed throughout the process, a point that should be considered in all high-performance building); and the danger of employing energy-intensive water conservation systems. We know that power generation uses water, so therefore, water conservation systems that use large quantities of energy to operate are counterproductive, and ultimately do not save much, if any, water.

An industry still in its adolescence

There was a small exhibit area, your typical trade show arrangement, with vendors showing their wares. I realized after visiting the booths that this industry is still a very immature one, a conclusion I reached after learning that there are few, if any, single source solutions for rainwater collection. Systems are assembled with tanks from one supplier, first flush filters from another, controllers from a third, and additional parts from still more suppliers. The group is very knowledgeable, but still somewhat disjointed, not unlike the home performance industry, which also faces challenges to widespread adoption. Rainwater catchment is still neither quick nor easy, two factors that combine to slow down adoption.

Great products looking for markets

Two products on display impressed me by their simplicity: the Rain Tube , a gutter guard and filtration system made of recycled plastic, and the Rainwater HOG , a modular storage tank system that is a very clever design. Being new products in an emerging industry, they are still seeking their “sweet spots” in the market, and they both deserve more attention and sales than they are currently getting.

Best in show

I have to save my highest accolades for Enterpriseworks , an extremely cool non-profit agency that held a contest to create an affordable, commercially viable rainwater collection device for emerging countries. Currently in the process of commercial development, this product is designed to be sold at an affordable price to provide cost-effective water collection systems to a broad market in the developing world. The winning entry is a reinforced plastic bag with a tube at the top where water is directed for storage. It is so simple, elegant, and inexpensive, it can serve as a lesson to the developed world that simple and straightforward can sometimes be the best route to take.

*This is a guest post by Carl Seville, a green builder, educator, and consultant on sustainability to the residential construction industry, and originally appeared at Green Building Advisor. You can visit Carl's website at SevilleConsulting.com or follow him on Twitter @GreenCurmudgeon.

Prominent Investment Manager Discusses Peak Oil on CNBC.

Peter Troast — Fri, 30 Apr 2010 14:28:29 +0000

Earlier this week, Puru Saxena, a prominent investment manager based in Hong Kong, was featured on CNBC discussing the imminence of peak oil.

Saxena is the founder of Puru Saxena Wealth Management, and a regular guest on CNN, BBC, Bloomberg TV, CNBC, and various other media, and publisher of a highly regarded monthly newsletter called Money Matters. It is interesting and important to see a mainstream investment manager taking peak oil very, very seriously: "We forsee a big energy crisis in the next two, three years," Saxena says, "and I think we're pretty much close to peak oil, in terms of daily flow rates... This is not because of politics, this is not because of OPEC. This is because of geology. You cannot continue to increase the production of oil."

Of course, as the guiding philosophy of Saxena's firm is to "invest capital for the long-term and focus on identifying those assets whose intrinsic value has not been fully recognised by the market." To be sure, Saxena appears to be something of a long-view contrarian - but a smart one, from what we can garner.

As for us, we'll simply re-state what we wrote back in the fall: "How do we build immunity against the fluctuating price of oil? By improving energy efficiency, and reducing the amount of fuel, whatever the source, that we'll need - both in the short term and the long term."

And Saxena seems to agree: as he wrote in Money Matters last August, "I suggest that all my readers allocate a large proportion of their investment portfolio to upstream energy companies and to businesses in the energy services sector."