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1. Introduction
In the U.S., emphasis on alternative energy and conservation
has a varied history. More than 30 years ago, the 1973 oil
trade embargo staged by Persian Gulf producers, vastly limiting
the supply of petroleum to the U.S., created an instant interest
in energy conservation. Thermostats were turned to more efficient
levels, solar water heating systems sprouted on the rooftops
of American homes (including a system that was used for a
few years at the White House) and tax credits were launched
by various government agencies to encourage investment in
more efficient systems that would utilize less oil, gasoline
and/or electricity. Meanwhile, American motorists crawled
through lengthy lines at filling stations trying to top off
their tanks during the horrid days of gasoline rationing.
While some consumers maintained a keen interest in alternative
and conservative energy methods from an environmentally-friendly
point of view, most Americans quickly forgot about energy
conservation when the prices of gasoline and electricity plummeted
during the 1980s and 1990s. Gasoline prices as low as 99 cents
per gallon were common. As advancing technology made oil production
and electricity generation much more efficient, a low commodity
price trend kept market prices under control. As a result,
Americans returned to ice-cold air conditioned rooms and purchased
giant, gas-guzzling SUVs, motor homes and motorboats. The
median newly constructed American single-family home built
in 1972 contained 1,520 square feet; in 2003 it contained
2,123 square feet. More square footage means more lights,
air conditioning and heating to power. Meanwhile, federal
and state regulators made efforts to force automobile engines
and industrial plants to operate in clean-air mode, largely
through the use of advanced technologies, while requiring
gasoline refiners to adopt an ever-widening web of additives
and standards that would create cleaner-burning fuels.
Fortunately, the first energy crisis in the early 1970s did
lead to the use of technology to create significant efficiencies
in some areas. For example, prior to that time, as much as
40% of a typical household’s natural gas consumption
was for pilot lights burning idly in case a stove or furnace
was needed. Today, electric pilots create spark ignition on
demand. Likewise, today’s refrigerators use about one-third
the electricity of models built in 1970. Many other appliances
and electrical devices have become much more efficient. While
the number of electricity-burning personal computers proliferated,
computer equipment makers rapidly adopted energy-saving PC
technologies.
Today, soaring oil and gas prices have created a renewed interest
in all things energy-efficient. Smaller cars, high-efficiency
homes and even solar power are once again part of popular
culture. Sales of gas-guzzling SUVs have slowed to a crawl
while the demand for hybrid vehicles is soaring. At the same
time, renewable energy sources and cleaner-burning fuels are
of great appeal to the large number of American consumers
who have developed a true interest in protecting the environment.
For example, surveys have shown that some consumers would
be willing to pay somewhat more for electricity if they knew
it was coming from non-polluting, renewable sources.
Hybrid gasoline-electric automobiles made by Toyota and Honda
are selling well in the United States, and many U.S. consumers
are looking forward to a wider choice of hybrid offerings,
including those of U.S. automakers that appeared on the market
beginning with 2005 models. Meanwhile, some municipalities,
such as the City of Seattle, are investing in buses and other
vehicles that are hybrids or run on alternative fuels. FedEx
and UPS are both eyeing the long-term purchase of tens of
thousands of hybrid or fuel cell-powered trucks.
Alternative energy is also of growing interest to some investors.
Venture capital and new public offerings of stock have helped
to support innovation. Likewise, the federal government is
helping to fund many energy efficiency projects, ranging from
fuel cell research to the design and development of high-efficiency
office buildings.
U.S. energy consumption from renewable sources was about 6%
of the total market in 2004, according to the Energy Information
Administration. For 2006 it will be slightly higher, at perhaps
6.2%, thanks to growth in wind, solar and biomass use. Meanwhile
nuclear generation accounts for about 8%. It should be noted
that the use of renewable sources does not always mean clean
power generation. For example, burning wood under the wrong
conditions can create a lot of pollution.
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