Cheap Gas Doesn’t Mean More Driving : Consumers Continue to Conserve Energy in Spite of the Oil Glut

Julius Nealy, a 68-year-old Los Angeles resident, says lower gasoline prices mean that he saves $3 every time he fills the tank of his 1978 Buick Regal. But lower prices don’t mean he is driving more.

“I have my routine and go to all the same places that I normally do,” he said as he filled his tank last Wednesday morning at an El Monte Arco station. “Most of the places are close to home.”

Leon Gonzalez, the station owner, said that most of his customers are like Nealy. Instead of driving more, “they are saving money instead,” Gonzalez said.

Gasoline prices have dropped more than 20 cents a gallon since last summer because oil prices have tumbled from $31 a barrel last November to less than $15 today. Energy experts doubt, however, that the worldwide glut of crude oil will drive up energy consumption.

The Energy Department predicts that just the opposite will occur. The department says that each American household will use 33% less energy in 1995 than it did in 1970. The amount of gasoline consumed in 1995 will be 12% less than the amount consumed in 1975, even though many more cars will be on the road.

Much of the decline in energy use results from federal and state regulations passed during the energy crisis that require energy efficient cars, homes and appliances. Additionally, experts say that energy consumers, like Nealy, have acquired good energy habits that they aren’t likely to break as prices fall.

Though Americans are paying less attention to conservation, according to experts in the field, they are still saving enormous amounts of energy. Between 1973 and 1984, American homeowners saved the equivalent of 1.4 billion barrels of oil daily, said Andrea Ketoff, an energy expert at Lawrence Berkeley Laboratories, a research firm in Northern California. Ketoff said that even though energy use increased by 3% in 1984--the first increase since the oil shock of 1978--Americans aren’t returning to their old ways. “We’re noticing less reversing (to old habits) than we expected,” he said. Ketoff said his research indicates that Americans’ energy habits have changed.

“Now people turn off the light when they leave a room,” says Dennis Whitney, conservation director for the Los Angeles Department of Water & Power. “Or they don’t use the oven to heat up a bagel.”

Regulations in most states that require energy-efficient construction have lowered the energy requirements for new homes.

New homes use 30% less energy than homes built a decade ago, according to federal statistics, and electrical appliances also use much less energy than in the past. The average new refrigerator uses 1,100 kilowatt hours a year, compared to the 1,600 kwh used by the typical older refrigerator.

Automobiles go farther on less gasoline as a result of federal fuel consumption standards. The Energy Department says a new car is 85% more fuel-efficient than a car sold in 1970.

Experts also point out that Americans are much less dependent on oil than they were in the 1970s.

Fewer 15% of the nation’s homes are heated with fuel oil, compared to 25% in 1973, according to Energy Department statistics. Electrical generation is less dependent on oil. Oil is used to generate just 4% of the nation’s power, down from 17% in 1973.

“There is virtually no relationship between the price of oil and the price of electricity,” said Alan Meier, an energy expert with Lawrence Berkeley Laboratories.

Experts note, however, that energy use in American homes isn’t stagnant. It increased by 3% in 1984.

Blip in Economy

Conservation experts attribute this growth blip to a healthy economy. George Amaroli, chief of the California energy branch, said that with inflation down and paychecks fatter, many Americans are buying “blow-dryers, home computers and second TVs for the kids.”

Additionally, American homeowners have recovered from the shock of higher energy costs. “People are used to paying higher energy prices,” said Elliot Aronson, a psychology professor at the University of California at Santa Cruz who has studied conservation behavior. Since homeowners “think the energy crisis is over,” they don’t worry about using energy, Aronson added.

Because homes and appliances are now more efficient, however, experts say it doesn’t appear that America faces the sort of energy shortages that closed factories in the Northeast and Midwest and created gasoline lines everywhere in the late 1970s.

But they warn that Americans will pay more for energy--especially electrical energy--if consumption isn’t further constrained. That’s because electrical consumption in the residential sector is expected to increase by 47% by the year 2000, as Americans switch to electric heat and buy more electrical appliances.

“There are two ways to meet the future demand,” said Amaroli. “One is to conserve, the other is to build new plants.”

Energy conservation forced its way into the nation’s consciousness seven years ago when former President Jimmy Carter urged Americans to reduce energy use and join in “the moral equivalent of war.”

The nation had just recuperated from an icy winter that led to a serious natural gas shortage, which closed schools and factories in the Northeast and Midwest. Shortly after the President’s speech, the unstable Middle East again erupted and oil prices raced upward, finally hitting a high of $38 a barrel in late 1980.

Electric-customers in California and the Northeast received a powerful shock, as oil was used to generate about one-third of their power. “Anyone looking for a reason to conserve needed to look no farther than their bill,” says Art Rosenfeld, a researcher at Lawrence Berkeley Laboratories.

Families Cut Back

Families responded to President Carter’s plea and to high prices by cutting back. A few homeowners stuffed their attics and walls with insulation; many more families adjusted their thermostats to save fuel. Ketoff says American households used 23% less energy in 1984 than a decade earlier--the second-biggest decline among developed nations.

Ketoff said that half of the energy saved between 1973 and 1984--the equivalent of 700,000 barrels of oil a day--was the result of belt-tightening rather than permanent energy-saving improvements.

Rather than cram their walls with insulation, many Americans adjusted their thermostats and shivered through the winter to save on fuel. Only 4% of American families requested federally funded energy audits, though they are widely publicized and are free, according to the Energy Department.

In 1979, during the height of the energy crisis, Portland, Ore., for example, offered homeowners low-interest loans for attic insulation and weatherstripping. Less than 1% of homeowners signed up.

Some homeowners who did invest in conservation became discouraged after finding that it could backfire in unexpected ways.

In 1979, a Tennessee Valley Authority loan program for wood-burning stoves attracted a good deal of enthusiasm but also led to a good many house fires.

The situation got so bad, recalls Patricia Harris, residential conservation manager at the TVA, that many families with wood-burning stoves--19% of the TVA’s customers in 1981--couldn’t get affordable insurance.

Homeowners Resisted

Efforts that forced homeowners to invest in energy conservation encountered resistance. In Portland, for example, voters, through a 1980 referendum, deactivated a 1979 ordinance that prohibited the resale of inadequately insulated homes.

The ordinance, while still on the city’s books, must be approved by the voters before it can be enforced. That has never happened. “People decided they needed more time” to comply with the regulations, says Jeanne McCormick, director of Portland’s energy office. The city says 42% of its homes and 7% of its apartments have adequate insulation.

And new home buyers are less enthusiastic about super-insulated homes--even when assured of huge energy savings--than they are about other amenities, such as an extra bathroom or a fireplace, according to home builders. “You can’t sell energy efficiency,” says Walt Miller, a Kingston, Wash., builder who has tried.

Miller is one of several builders in the Pacific Northwest who have built energy-efficient homes under a program sponsored by the Northwest Power Planning Council, the federal agency that oversees power distribution in the region. Of the 450 homes built under the program 1 1/2 years ago, about 20% remain unsold.

Miller cut the price of one home by $6,300 to $59,500 and it didn’t sell, although “there were a lot of lookers.”

Thomas Eckman, senior conservation analyst for the Northwest Power Planning Council, blames the low sales rate on a soft market and poor locations. Seattle home builder Thomas McGrath blames cost.

He says the homes, which cost $2,500 to $5,000 more than conventional homes, are too expensive for young families. “First-time buyers who earn between $24,000 and $26,000 will be impacted” when the housing standards are enforced next year, Eckman acknowledges. “But, if you look around, that’s only 2% of the families regionwide.”

Support Restrictions

In some communities, however, restrictive regulations are well received. John Frigenisi, community development director in tiny Ashland, Ore.--population 15,000--says the mandatory conservation measures work in his community because, as the location of Southern Oregon College and an annual Shakespearean festival, it is populated with well-educated, well-paid and “pretty liberal residents.”

Among Ashland ordinances that “wouldn’t work in too many places” is a law that prohibits the planting of trees that will cast shadows on the south side--the sunny side--of residences. “You need a population that’s supportive of that, and that’s what we have here,” Frigenisi says.

The amount of energy that could be saved in American households is potentially enormous. Robert H. Williams, a researcher at the Center for Energy and Environmental Studies at Princeton University, said the technology exists to save the equivalent of another 800,000 barrels of oil a day by the year 2000.

But, with energy prices now lower, the odds are against it. Towns such as Ashland aside, “the conservation message has gotten much quieter,” Williams observes.

Few natural gas or electric utilities are pushing conservation as hard as they once did. Southern California Gas, the nation’s largest natural gas utility, has stopped insulating single-family homes and is trying to sell more gas through co-generation, by which customers make their own electricity from gas.

The Bonneville Power Administration, which supplies power to the Pacific Northwest, has sharply curtailed its conservation programs.

Customers Pay More

“It comes to a point where conservation no longer makes sense for a utility,” says Bruce Pittenger, a consultant with Cresap, McCormick & Paget in Los Angeles.

Pittenger said that in many cases, utility customers end up paying more for utility-sponsored conservation programs than the fuel costs. That is because many states, including California, allow utilities to pass the cost of conservation programs on to customers through utility rates. “In those cases, it doesn’t make sense to push conservation,” Pittenger said .

However, some financially strapped electric utilities are beginning to view conservation as a cheap source of fuel. “The alternative is for utilities to build lots of expensive central station power plants that take 15 years to finish,” says Howard Geller, a researcher with the Washington-based American Council for an Energy Efficient Future.

Geller says “rates could shoot up by a large percent” even if utilities are forced to absorb some of the plant construction costs. So far as conservation is concerned, “it’s up to utilities to get the ball rolling,” Geller says.

Public Service Electric & Gas, located in Newark, N.J., is trying to do just that. It started pushing energy conservation after canceling its Hope Creek Two nuclear plant in 1983.

“We need to save 1,000 megawatts a year through conservation by 1995” to compensate for the power that Hope Creek Two would have produced, said Richard B. Comerford, the utility’s conservation director.

The New Jersey utility is having a difficult time persuading its residential customers to save. Encouraged by lower rates, homeowners are increasing their electrical consumption by 2% a year. “There’s a lot more TVs and radios out there,” says Comerford.

Williams, the Princeton researcher, says the message is obvious. “Market forces by themselves are not enough to bring about an energy-efficient future,” he says.

Different Approach

Southern California Edison has taken a different approach. Rather than asking customers to pay for energy-saving equipment, it is paying some customers not to use electricity. Last summer, the Rosemead utility paid 80,000 customers $7 million for the right to switch off their air conditioners by remote control on hot summer days.

Richard McLeod, manager of the program, says Edison saved 160 megawatts last summer, the size of a small gas-fired power plant that would cost $23 million to build. That helps bring the utility closer to its goal of saving 880 megawatts through conservation and load management by 1998.

It also helps Carol Williams, whose goal is very different from the utility’s. The Williams family isn’t energy conscious. Their comfortable one-level home in Covina is stocked with the modern gadgets that few American families do without these days--a stereo, a video recorder, a microwave, a radio and two TVs.

Carol Williams, a single parent, pays attention to heat and hot water to save money. “I honestly don’t think about energy,” she says.

“This is why I do it,” she says, waving a stack of electric bills. Last year, she saved $144.49 as part of Edison’s air-conditioning program. “If I save energy, too,” she says, “That’s OK with me.”