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FAS Vice President of the Strategic Security Program, Dr. Ivan Oelrich, was featured on a panel discussion last week at the Center for Strategic and International Studies (CSIS). The discussion was the second event of the CSIS Project on Nuclear Issues (PONI) “Debate the Issues” series. The discussion focused on the forthcoming Nuclear Posture Review.

Watch a video of the discussion here.

Happy Earth Day!

To mark the celebration of the 40th Earth Day, the Federation of American Scientists (FAS) is launching the Earth Systems Program. As increased stresses on the environment threaten environmental, resource, and food stability, environmental issues have become a key security matter.

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Ivanka Barzashka is intrigued by the puzzle that is Iran’s nuclear program. Unlike North Korea’s public pursuit of nuclear weapons, Iran has been steadfast in its denial of developing a nuclear bomb, stating time and time again that it is pursuing a self-sustaining nuclear energy program. The dual-use nature of nuclear technology, specifically uranium enrichment, is at the heart of the uncertainty concerning the Iranian situation.

In his speech last Tuesday, President Obama defended the reputation of insulation, stating “See, I told you, insulation’s sexy.”  His assertion that insulation is a hot and sexy building material is based on the cost-effectiveness of insulation for both new construction and retrofits.  And when he stated that “if you saw $20 bills just sort of floating through the window up into the atmosphere, you’d try to figure out how to keep them,” he equates properly insulating a house with saving energy and money.   And we agree—without question, insulation saves energy and money.  Not only is insulation one of the least expensive and best methods of saving money on your utility bills, it also improves your house’s thermal comfort.  So while the Building Technologies Program doesn’t claim expertise at sexiness, we applaud the spirit and message of Obama’s speech.

And insulation is also a key component in the federal government’s energy efficiency strategy.  As the US seeks to reduce energy consumption from buildings in both the residential and commercial sectors, the concept of retrofitting or weatherizing existing building stock has come to the forefront of government policy.  Vice President Biden’s recent report, titled Progress Report: The Transformation to a Clean Energy Economy, backs up the message of the cost-effectiveness and job creation potential of weatherization.  According to the Progress Report, the $5 billion appropriated for the Weatherization Assistance Program (WAP) in the American Recovery and Reinvestment Act of 2009 (ARRA) will weatherize 500,000 houses by the end of 2010 and, combined with private investment, will weatherize 1 million houses by 2012.

In addition to increasing weatherization funding to $5B, ARRA has also increased the percentage of funding that can be used for training (to 20%), raised the WAP qualification cutoff from 150% of the poverty line to 200%, and increased the total per-house weatherization allotment from an average of $2500 to $6500.  This $5B is a good investment not just for the receiving families, but also in terms of job creation.  While the Progress Report fails to provide numbers on how many jobs weatherization should create, it does provide data on the expected job creation from other ARRA energy measures.

Weatherization’s Role in Job Creation

The ARRA cost per job created ratio is a valuable tool for determining which measures are likely to produce the most jobs at the lowest cost.  For example, while public sector investment in energy manufacturing facilities is very capital intensive and yields only one job for every $135,294 invested, renewable energy generation and advanced energy manufacturing is expected to yield one job per $92,490 invested.  By comparison, over the past several years the WAP received $250 million in public funding, directly creating 8000 jobs and weatherizing 100,000 homes annually.  This results in a job creation ratio of one job for every $31,250 of government investment—a highly efficient investment to job ratio. As the budget increases to $5B and the retrofit goal increases to 500,000 houses under the stimulus, the program can be expected to continue as one of the most efficient job creating programs in the clean energy sector.

Assuming that the current weatherization employment was scaled up directly with the additional funding, the additional funding would be expected to produce 160,000 new jobs.  However, several factors will limit weatherization job creation well below this point.

First of all, as more money is spent per house (from $2500 to $6500) houses will be retrofitted with more expensive, less labor intensive measures such as new high-SEER HVAC systems and EnergyStar rated windows.   And so while performing $6500 in retrofits will require more labor than $2500, it will not require over 250% more labor.

Second, as money spent on training and technical assistance increases from 10% to 20% of the budget, less money will go toward directly retrofitting the houses.  However, the higher training and technical assistance appropriation is essential as the nation currently lacks the qualified weatherization professionals necessary to meet the higher weatherization goals.  And without qualified retrofit professionals and specialists, weatherization money will be wasted as installation is not done properly and the program’s full energy efficiency benefits are not realized.

And finally, while the current $5B appropriation is theoretically enough to weatherize the 500,000 house goal at an average cost of $6500, additional program expenses for scaling up operations and state-level training are likely to decease the money available for weatherization wages.

Assuming a ratio of houses retrofitted per job created similar to the 2009 WAP ratio (12.5 houses/job), the program could be expected to create 48,000 jobs.  However, this number is likely to under predict the job creation potential of weatherization as additional retrofit professionals will be needed on each house in order to perform the more extensive retrofit.  Accounting for the additional workers needed to blow interior insulation and replace or repair HVAC systems, doors, and windows, a more realistic ratio would be 9 houses per job.  This yields an estimate of about 70,000 jobs created at $71,429 of government investment per job.  Even this fairly conservative job creation estimate demonstrates the relative cost effectiveness of the WAP and energy efficiency retrofits as compared with other clean energy sector investments.

And at a household level…

The WAP program metrics show that under the $2500/house program households save on average $350 annually on their utility bills, representing a 23% reduction in total utility bills.  This reduction is especially important for low-income families as this sector pays, on average, 16% of their income toward utility bills, as opposed to a national medium of 4-5%.  A key to reducing energy use is to decrease space heating and cooling needs as they together account for on average over 1/3 of a house’s energy use.  And the key to reducing heating and cooling loads?

Insulation.  See, just like President Obama told us, insulation could be a seriously sexy building material.

A few fun facts about insulation and using it in retrofits

What is referred to as insulation is a term for any material that significantly slows down or retards the flow or transfer of heat.  Insulation is measured in terms of its R-value, which is a measure of resistance to heat flow/conductivity.  This equation [DT/Q_A or, in the US, 1 hour* ft²*°F/Btu] measures only conduction, to which 25-40% of air infiltration is attributed in an average house.  The other two means of air infiltration, convection and radiation, make of the remaining 60-75% of air infiltration in a given house, but are not generally considered when looking at the insulating properties of a material. The higher the R-value, the greater the resistance of the material and the better it insulates.

Insulation is classified primarily by form and by material.  Insulation forms, for example, include rigid, semi-rigid, loose-fill, batt, flexible, reflective, and foamed in place.  And common insulation materials include mineral fiber, organic fiber, and foam glass.

While not all types of insulation are appropriate for retrofitting, many interior and exterior/sheathing insulations can be effectively applied.

Surveying the retrofit case studies from the DOE Building America program, the most popular forms of insulation for retrofitting or weatherizing buildings include blown interior and rigid exterior insulations—specifically blown cellulose and polyisocyanurate rigid insulation/board.  Additional types of insulation utilized include fiberglass bat, sprayed polyurethane foam, spray and rigid foams, and rigid insulation integral to both house wraps and siding.  In all cases, the needs of the particular climate must be taken into account, but some form of insulation is almost always the most cost effective retrofit solution.  For example, in Pasadena, “if you have 300 square feet of glass and you replace it, you go from R-1 to R-3 [which is the typical R value for new windows].  For a fraction of the cost, you can take the 2,000-square-feet of ceiling surface area and increase it from R-6 or R-10 to R-38 at the place where it really matters, in the attic.”  (quote courtesty of Andrew Durben at HartmanBalkwin )

The chart below breaks down the cost savings and types of insulation used in six Building America retrofit cases.

Over the opening days of the Copenhagen Climate Negotiations, which began this Monday, each country has been asked to consider how it can contribute to the 25-40% carbon emission reductions climate scientists believe to be necessary to keep climate change below the 2C mark.  Key issues at stake for the 170 nations represented include commitments to national and international carbon reduction emissions, financing of clean technologies and carbon emission reductions, and technology transfer to non-industrialized nations.   Leading up to the Copenhagen climate summit, deforestation has been primary focus of discussion as deforestation accounts for one-fifth of global carbon emissions and halting deforestation involves large financial investment, but no fundamental consumer behavior changes.  And with a Reducing Emissions from Deforestation and Degradation (REDD) agreement, developed nations would pay developing countries to not cut down their rainforests by treating the standing forest as a valuable commodity.  Such an agreement, if properly financed and implemented, will be necessary to meet global carbon emissions goals and avoid the numerous ecosystem and climate hazards associated with deforestation.

However, in order to meet national greenhouse gas abatement goals and make the economic and structural changes necessary to avoid or mitigate large-scale climate change consequences, industrialized countries must reduce both their total energy consumption and energy intensity.

Consuming 40% of all energy in the US and Europe and 30-40% worldwide, the building sector is one of the least energy efficient sectors and one in which efficiency investment has been generally highly fragmented, relying n the US on individual owners to finance energy efficiency new construction and retrofits.  Yet for many countries, especially the US and the European nations, cutting buildings sector consumption is not only essential to meeting these goals, but is also one of the most cost effective energy saving measures available (see the table from McKinsey, below). Furthermore, analysis by the World Business Council for Sustainable Development (WBCSD) indicates that market-driven reform can reduce building energy use by 60% by 2050, but will require a concerted and immediate effort on the part of industry, government, code and standard making bodies, and labor in order to achieve.

Graph demonstrating the cost effectiveness of buildings energy efficiency (McKinsey)

Looking at energy use in the residential sector as a case study, according to the 2005 Residential Energy Consumption Survey 59% of houses in the US were built before 1980 and in the vast majority of cases have not been substantively renovated or retrofitted. These hugely inefficient houses feature little or no insulation in the attics, walls, and foundations, inefficient HVAC systems, leaky ducts, poor air sealing, outdated windows and doors, and are often expensive to operate due to high energy waste rates, especially during peak heating and cooling periods.

US households spend on average just over $1800 annually on house energy consumption, with over 40% of that energy consumed in maintaining thermal comfort through space heating and air conditioning. However, energy consumption reductions of up to 50% have been proved cost effective in both the retrofit and new housing market by focusing on insulating and air sealing to reduce heating and cooling costs.  In the retrofit market, the efficacy of energy efficiency retrofits in decreasing annual operating costs of a building through energy savings is supported by analysis of the DOE Weatherization Assistance Program.  Independent reports conclude that for every $1 spent to weatherize a house (up to $5000 under the current program), the occupants save $1.67 in utility costs, a savings achieved through measures such as adding insulation, air sealing, installing airtight doors and windows, and occasionally upgrading HVAC equipment and ducts.

In the new homes market, Habitat for Humanity affiliates across the country have succeeded in building affordable housing units that are up to 50% more energy efficient to operate (achieving HERS scores in the low to mid-50s), feature materials with low embodied energy, and are cost-effective, saving the families hundreds of dollars per year in operating costs. (To see case studies on high performance Habitat building, see upcoming FAS report titled “Habitat for Humanity High Performance Building Guide”.)

The US Federal Government has begun to address the need for improved energy efficiency in the building sector through legislation in areas such as:  investments in weatherization (the American Recovery and Reinvestment Act of 2009), commercial and residential energy efficiency tax credits (among others, the Energy Improvement and Extension Act of 2008), federally backed energy efficient mortgages, and setting energy use goals and standards for federal buildings (the Energy Policy Act of 2005 and Executive Order 13423 of 2009).  However, all current US energy legislation will save only a fraction of President Obama’s recently announced target of 17% energy savings by 2020.  My comparison, the European Commission has just tentatively approved an “Energy Performance of Buildings Directive,” which mandates that all new construction be “near zero energy”; this directive is estimated to have the potential to reduce the EU’s greenhouse gas emissions by 70% of their energy savings target of 20% by 2020.

In order to fulfill any promises that are made at Copenhagen over the coming days and weeks, the US will need to set an ambitious buildings energy efficiency target akin to that approved by the European Commission.  This target must be supported by both public and private action and investment, including:  government legislation, incentives, and workforce training; private sector financial investment and the development of a strong, competitive, energy efficiency market; technological innovation both from industry and the national labs; and the rapid development and deployment of high performing building energy codes and standards.