April 28, 2006—Runaway energy demand is outstripping markets’ ability to deliver, binding America in an “energy straitjacket,” according to a new report from the American Council for an Energy-Efficient Economy (ACEEE). America’s Energy Straitjacket finds that the resulting high energy prices show no early prospects for relief, spurring inflation and threatening economic growth.
This unprecedented situation, in which interrelated forces are squeezing oil, gas, coal, and electricity markets at the same time, calls for energy efficiency in the short term and a more aggressive policy response for the long term, says ACEEE.
ACEEE finds not so much a “supply” crisis, but a “deliverability” crisis.
This means that while in-ground resources are not fully depleted, the energy quantities delivered to market are not keeping up with demand. “The energy industry is investing in wells, mines, pipelines, and refineries,” states author Dr. Neal Elliott, ACEEE’s Industrial Program Director, “but energy demand is growing faster than most of these markets can add capacity.”
ACEEE asserts that the only near-term policy solution is to moderate demand through aggressive energy efficiency and conservation, allowing energy supply markets to catch up. ACEEE adds that efficiency must be sustained for the long term, because energy suppliers face continuing challenges. Constraints on capital and materials, environmental concerns, regulatory approvals, and other factors will continue to limit the rate at which supply infrastructure can be deployed.
America’s Energy Straitjacket includes the key steps that ACEEE recommends the federal government take in the short and long term. The report is available for free download from ACEEE, or a hard copy can be purchased for $16 plus $5 postage and handling from ACEEE Publications.
