[melvin]

Yes, that's one of the disturbing things about the oil industry. The oil companies have done their best to make sure usage of oil is as inefficient as possible, since that is in their medium-term economic interest... They go to tremendous lengths and expend (and destroy) significant resources to extract oil, and then they are actually hoping we'll waste a major portion of it.

[danshapiro]

It always confuses me when the energy company promotes energy efficiency. It seems like economic incentives exist for both promoting efficiency, reducing it, and greenwashing (doing one while promoting the other). It would be really interesting for someone to do an economic analysis and figure out what the bottom line is for the oil companies with regards to energy efficiency.

[aarong]

Ha. How would consultants make their money if this was easier to figure out?

It's natural for any smart person to ask "Why would someone who sells energy want to drive energy efficiency?."

The short version is utility spending on energy efficiency is largely driven by 2 key factors - one is regulation and the other is capital deferral.

On the regulation side, it's 31 flavors... E.g. you have decoupling, renewable portfolio standards which have efficiency components, efficiency portfolio standards, mandates to target all cost effective savings (e.g. WA), etc... Some flavor of this applies to about 35 of the 50 states.

On the capital deferral side, it's more about a utility getting more rate payers on the same capital assets. Turns out it's not easy to permit a new coal based power plant. So more users on existing plant may mean less revenue but more profit depending on the circumstances. In some markets (e.g. FL) the utility commission lets the utility charge consumers for conservation programs. So in these case, the utility has effectively marginal CGS/OPEX on a program which drives up profitability.