Conservation and CAFE standards

I recently sat down to talk energy with Joseph Stanislaw, one of the founders of Cambridge Energy Research Associates who is now running his own consultancy and acting as an adviser to Deloitte & Touche.
One topic we touched on was the call from some politicians for oil companies to promote conservation while they continue to let the existing Corporate Average Fuel Economy standards ride.
CAFE standards dictate how many miles per gallon the United States’ fleet of vehicles has to achieve overall. Dialing up efficiency through CAFE standards should be an easy first step toward using oil more efficiently in this country, Stanislaw says. But only Congress can do it.
The Stanislaw interview will run in Friday’s paper, but here are some interesting outtakes from the transcript.

Q: So do you think traditional energy companies are doing enough to promote conservation or should they even be talking about a move away from hydrocarbons?
A: Look, if you take straight oil companies, they’re not designed to encourage conservation except in their own applications. (Some of the explorers put solar panels and even windmills on their offshore rigs to help power them.) Their mandate and their agreement with shareholders is not to do that.

That doesn’t mean they can’t encourage or support environmentalists who, say, want to see more efficient cars. This will help them long-term to and take some of the political pressure off them while continuing to promote oil-based transportation. Because, you know, it’s actually helping to maintain the business position they have.

It’s almost the only market the oil companies have now — transportation — or will at the end of the day. So they want it to survive in a way that’s socially acceptable, but still oil.
Q: What about conservation on the power side? I’m thinking about the Cape Wind project in New England that’s encountering so much community resistance. Even 20 years out, all predictions are that wind energy will still be a tiny amount of the overall energy mix, so what’s the benefit in pushing forward with one small project?
A: My answer is simple. An application like wind is a niche market play and every application like that does make a difference. Because, in this case, it will supply Cape Cod and the islands. So you don’t need to build a nuclear power plant. You don’t need to build an oil-fired or natural gas-fired plant, and that takes pressure off those traditional sources of supply so it can go elsewhere at a different price level.
My bottomline is I’m purely eclectic. No technology provides the final answer. No supply source does. They’re all needed.
But this is a very controversial issue. The real issue is, in our country and in particular on the two coasts, we suffer from a complex about not wanting to build anything anywhere. You know, we’ve got to make some decisions because there are no energy sources free of objectors. None.
No matter what energy source you’re talking about somebody’s objecting.That’s why I say look at the demand side. Because if you do it right you’ll never stop having to create supply but you’ll have to come up with a lot less of it. There’s nothing offensive about a car that gets twice as many miles per gallon.