Finding Another Saudi Arabia Under Detroit: Amory Lovins on the Economic Logic of Energy Efficiency and the Overthrow of Bad Engineering

12/8/08Follow @wroush

Xconomy had the great privilege last week of hosting energy guru Amory Lovins, the cofounder, chairman, and chief scientist of the famous Rocky Mountain Institute resource think tank in Colorado, for a “fireside chat” with local venture community leader Paul Maeder of Highland Capital Partners. There was no real fire or other unwarranted carbon emissions, of course—it was all part of Xconomy’s latest forum event at the British Consulate General in Cambridge, MA, focusing on the role of technological innovation in rebuilding the U.S. energy economy.

We published a summary of the forum’s opening panel on Thursday, and today we wanted to bring you a transcript of the conversation between Maeder and Lovins. Energy has been on Maeder’s mind a lot lately: he’s leading his firm’s effort to branch out from healthcare, consumer, Internet, and communications investments into the world of energy efficiency technologies. And he quizzed Lovins—who was on his way to the other end of Cambridge to give a speech as part of the “Future of Energy” series at the Harvard University Center for the Environment—on a dizzying variety of issues, from the role of oil prices in energy innovation to the inefficiency of today’s building and construction industry and the best way to resurrect U.S. automakers.

But while the discussion was wide-ranging, Lovins returned over and over to the message that is at the center of the Rocky Mountain Institute’s advocacy and of his own consulting work for automakers and companies in other industries: that tapping market mechanisms to bring about the more efficient use of resources isn’t simply a good thing for the global environment, it generates greater employment, wealth, equality, and national security.

Paul Maeder: Let’s begin with how you got here. You grew up in Washington, D.C., and went to Harvard and Oxford. Neither school is known as an energy powerhouse.

Amory Lovins: Neither was any other place. There was no university in the world where you could study energy. It was always the engineers, the lawyers, and the accountants who created energy policy. Just two years before the Arab energy embargo, schools were still saying “Energy, what’s that? It’s not a real subject. We don’t have a chair in it.”

PM: How did you come to the conclusion, even before the first oil shock, that energy was the crux of so many issues?

AL: From reading books by John Holdren and others, it was pretty clear that energy was as close as anything to being the master key that would teach us about other issues like water and climate and minerals. And that turned out to be true. Then I wrote a paper that was published in Foreign Affairs in 1976 ["Energy Strategy: The Road Not Taken"], and I’ve been real busy since then.

PM: In Europe, which has a culture of doing more with less, there has been sensitivity to energy prices for a long time. Here, the acuteness of the problem only jumped to the forefront when gas prices were starting with a 4. Now they’re back to starting with a 1. Where are we now? Was this just a flash of awareness, or was it a secular change?

AL: I think there is a secular change, because we still have acutely the security and the climate problems around energy. And those will be with us for quite a while, and that will help us to keep our eyes on the ball in a way that didn’t happen after energy prices crashed in the late 1970s. That said, oil is a commodity and its prices have been perfectly random since 1859. There is no reason to believe they won’t … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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