Maryland Legislation Taps Energy Efficiency as the "First Fuel"

Maryland Legislation Taps Energy Efficiency as the First Fuel

Governor O'Malley's Energy Efficiency Bills Are Passed by Legislature

Washington, D.C. (April 9, 2008): Maryland's legislators gave final approval this week to two landmark energy bills that together aim to reduce the state's energy consumption by 15% by 2015. The legislation, proposed by Governor Martin O'Malley, sets the stage for Maryland to become a leader in capturing the benefits of energy efficiency.

"These two bills provide a foundation for a clean and sustainable energy future for the state of Maryland," said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy (ACEEE). "Maryland's policies now recognize energy efficiency as the 'first fuel' for meeting its future energy needs.

A study released in February by ACEEE evaluated a suite of energy efficiency policies for Maryland and found that more than enough energy efficiency resources exist in the state to meet Governor O'Malley's ambitious 15 by '15 goal, and confirmed that reducing electricity consumption is the quickest, cheapest, and cleanest way for policymakers to bring consumer bills down and keep the lights on in the state.

Two of the bills are key to meeting the Governor's goals. The first codifies the goal of reducing per capita electricity consumption 15 percent by 2015. This target, known as an energy efficiency resource standard, will require the state's electric utilities to achieve 10% savings by 2015 and the Maryland Energy Administration (MEA) to oversee programs to meet the remaining 5%. The second bill establishes a Strategic Energy Investment Fund supported by the proceeds of upcoming auctions of the state's carbon dioxide emission allowances and administered by MEA. About half of this new fund, which is expected to reach $100 million or more per year, is to be expended on programs to reduce energy consumption, including low- and moderate-income electric customers.

In addition, the General Assembly passed a bill that requires energy-efficient and environmentally friendly design and materials for new state buildings and public schools, and a separate bill that boosts the state's renewable portfolio standard (a target for the portion of the state's energy derived from wind, solar, and other renewable sources) to 20 percent by 2022.

Among all the possible energy resources available to the state, energy efficiency is the least-cost and the quickest to deploy," said Maggie Eldridge, ACEEE's State Team Leader. "By committing to investing in energy efficiency, Maryland can meet its future electricity needs while containing energy costs for the state's consumers. This legislation is an extremely smart investment for all Marylanders.

ACEEE's analysis shows that the benefits of energy efficiency include lower consumer electric bills, improved system reliability, significant job and economic development in the state, and reduced pollution. Our analysis of policy options available to Maryland identified potential net consumer electric bill savings of about $900 million and over 8,000 new in-state jobs in 2015," said Eldridge. "The provisions included in this year's energy legislation and last year's appliance efficiency standards address about 90% of the efficiency savings that we identified.

Helping consumers save energy means helping families reduce their electric bills, said Ed Osann, Senior Associate with ACEEE. We commend the General Assembly for answering the Governor's call to help Marylanders make their energy use more efficient.

The foundation for a more energy-efficient Maryland is now in place, said Neal Elliott, ACEEE's Associate Director for Research. "ACEEE looks forward to working with the Maryland Energy Administration, the Public Service Commission, utilities, and consumers as new programs are developed that will achieve these ambitious goals. Based on our work with leading energy efficiency programs across the country, we are confident that Maryland can succeed."

Energy Efficiency: The First Fuel for a Clean Energy Future-Resources for Meeting Maryland's Electricity Needs can be downloaded for free at or purchased for $50 plus $5 postage and handling from ACEEE Publications, 1001 Connecticut Avenue, N.W., Suite 801, Washington, D.C. 20036-5525, phone: 202-429-0063, fax: 202-429-0193, e-mail: .

About ACEEE: The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For more information about ACEEE and its programs, publications, and conferences, visit .

Check out this US Carbon Footprint Map, an interactive United States Carbon Footprint Map, illustrating Greenest States to Cities. This site has all sorts of stats on individual State & City energy consumptions, demographics and much more down to your local US City level...

This is the first positive step I've read about in a long time - and from the United States no less. I guess this means that some people are starting to take this whole "peak oil" phenomenon seriously. To be honest, I was a little skeptical myself when I first started readin all this stuff but now I'm conivinced that unless serious measures are taken we are in big trouble.

I just finished a class on Energy, Power, and Security and am not sure whether to feel depressed or enlightened - or maybe a bit of both. Before taking the class I knew nothing about this whole peak oil "thing" and I was a total advocate of anything ethanol. I've learned quite a lot in the last few months, and one of the most important things I've realized is that the solution to peak oil is not ethanol (or any other substitute for gasoline) - it's efficiency. I'm sure we've all learned by now that ethanol is not "greener", and it leads to the clearing of many of our natural carbon storage sinks thereby emitting even more carbon into the atmosphere than oil.

Instead of focusing on ways to continue with our destructive lifestyles, maybe it's time to start thinking about how we can change to adapt to these new found (yet recurring) energy insecurities. Maryland has made a conscious effort to start dealing with this realization. Maybe it's time the rest of us took notice and started turning off our lights and walking a little more often. Not only would we save a lot of money, but we'd be showing our politicians that we're not scared of the future - we're embracing it. Maybe then peak oil would get the attention it deserves and the people that run our coutry could stop denying that it exists - or at best turning a blind eye. The time to act is now, and Governor O'Malley has taken up the challenege - will others politicians follow suit or will the problem be denied until it is too big to hide anymore?

That's great news, Nate!

I expect the rest of the USA to follow Maryland's actions as it appears that the world production plateau of crude oil and lease condensate (C&C) is over, and C&C production has entered its irreversible decline phase.

World Crude Oil & Lease Condensate Production to 2012 (bottom up project forecast) - click to enlarge

For a more detailed forecast please see

As C&C production declines, expect higher oil prices. One the world's most prized oils, Tapis, exceeded $116/barrel for the first time today.

Big fan of your work. Always concise and referenced. Question:

What makes you confident that the drop you are seeing isn't like the dips you show after Peak 1 and Peak 2, and will make new highs later on?


p.s.I heard Guy Caruso at EIA conference today project total oil in ground of 16-21 trillion barrels. Another chap talked about technology eventually getting to 75% recovery rate. After 5 years of looking at this stuff, I am still SHOCKED at the disparity of beliefs in the two camps. They are off by an order of magnitude!!


I think that the drop in C&C production is irreversible because too many countries are now in decline or on plateau. Angola has just said that 2 mbd is their peak about now. Russia is either in decline or on peak plateau now. Venezuela is on a plateau or slight decline. Offshore areas such as North Sea, USA Gulf of Mexico and Mexico are in serious decline. Canada's tar sands production has been increasing but offsets Canada's declining conventional production. Saudi Arabia's C&C peaked in 2005 and Khursaniyah's 500 kbd project has been delayed and Aramco will only admit to a 300 kbd capacity.

Increasing production from Kazakhstan, Azerbaijan, Brazil and possibly Nigeria and Iraq won't be able to offset all the declining countries. The forecast is also an output of an excel model which contains over 350 world projects/regions, each with their own production profile.

I am also given further confidence by IEA's forecast in their World Energy Outlook 1998, prior to their acceptance of the overoptimistic USGS World Petroleum Assessment 2000.

Oil Supply Profile to 2030 - click to enlarge
source: page 100

The chart above shows a crude oil peak in about 2012 assuming that the total ultimate recoverable reserves (URR) are 2,300 billion barrels. I think that this estimate is high. Colin Campbell's URR estimate is about 2,230 billion barrels but this includes 143 billion barrels yet to be discovered. So Campbell's revised known URR is lower at about 2,100 billion barrels. This lower estimate pushes the IEA peak forward. My estimate is that the world total URR for C&C is closer to 1,900 billion barrels as I think that Campbell's URR estimates for OPEC countries are too high which brings peak C&C further forward.

Nate: I have read forecasts like 21 trillion-a country by country breakdown is never provided, which lessens the credibility of these claims greatly. Just a guess: Russia 4 trillion, SA 6 trillion, Canada 5 trillion, Venez 4 trillion? The numbers always look more ridiculous when listed by country.

Ace is it significant that this bloomberg piece puts

500,000 barrel-a-day Shaybah oil field expansion

whereas this megaprojects page has it at 250,000



I think Bloomberg just made a mistake.

Aramco's official source says a 250 kbd expansion on Dec 2008 bringing Shaybah's total capacity to 750 kbd.

Bloomberg's article does say that "Aramco will add a further 250,000 barrels a day by the end of the year when its 500,000 barrel-a-day Shaybah oil field expansion..." So the first part of their sentence is right.

What is interesting in Bloomberg's article is that Khursaniyah will only produce 300 kbd but "will eventually add 500,000 barrels a day to the country's production capacity". Maybe Khursaniyah will only ever produce 300 kbd.


The 300kbpd is on start up, so possibly they will ramp up (as you have said before). The bigger question is how do they get to 12mbpd by the end of 2009? Close on an increase of 3mbpd from what they did in 2007 and just over 2 mbpd of megaprojects, so no decline and more than their telling us? I'd appreciate your take on it.



The short answer is that Aramco won't be producing 12 mbd of crude, although they might say they have the capacity. Please refer to some of the jokes on capacity by westexas.

Aramco’s new project additions do not offset the natural production declines of their existing fields as shown by the chart below. In addition, Aramco’s so-called surplus capacity is heavy oil which can’t be produced since there is not enough surplus refinery capacity to process their heavy oil. Consequently, Aramco’s production will, at best, remain on a plateau for the next couple of years.

Saudi Arabia Crude Oil & Lease Condensate Production to 2080 - click to enlarge

For a long answer please read section 5 of my Feb 2008 oil forecast

For more info please read my story on Saudi Arabia’s use of propaganda which includes a detailed discussion on discovered oil in place and recovery factors.

Ace, posts like yours and West Texas's in my view provide wholly persuasive evidence for the true situation in supplies, contrary to what government and industry sources would have us believe.
Thank you for your fine efforts.

The current slogan printed on Maryland license plates reads "Seize the Day Off". Previously it read "America in Miniature". In a way, the former motto speaks volumes about the two seemingly progressive energy bills recently passed by that state.
Though measures to curb both state-utility and residential energy consumption no doubt constitute steps in the right direction, the exclusion of industrially-related energy consumption concerns is symptomatic of the larger issue facing the United States (and indeed all western states) and their energy woes. Instead of focusing on the truly exorbitant energy consumers - our massive production facilities and the broader business interests they represent - government and the mainstream media outlets have attempted (though far less intentionally in the latter case to be sure) to download the burden of responsibility to the average middle-class citizen. At the risk of coming off as a bent, left-wing marxist rant, if we're really concerned about our energy consumption, we need to focus on the wider issues of what forces drive these demands and how and if these forces are susceptible to change. The same questions apply to concerns about global warming. Though we ought to be conscious of our individual impacts and those of the states we support, it is foolish to imagine that these constitute the gravest of our society's energy transgressions.
We ought to ensure that we prevent the industrial-corporate interests within our society from seizing the days off they've declared for themselves.

The objectives are admirable, the intentions praiseworthy but my question is are we doomed to applaud the miniscule steps being taken towards a Sustainable Environmental strategy whil;e ignoring the proverbial elephant in the room? While I am encouraged by the actions being taken in Maryland, I cannot help but see it in the wider context of United States refusal to take the lead in driving Environmentla Security policy. There are those who would arge=ue that the U.S is more interested in another type of Security in the form of fossil fuels and so any other concern is secondary to that particular brand of Security. I daresay that a country that has vehemently refused to openly acknowledge the reality of peak oil is worthy of little confidence in matters of Security and Sustainability.

I will be the first to note that I am among those who question but offer no solutions. I am inclined to put that to the fact that I have only recently been named among the converted. I would however like to understand better what kind of world peak oilers envisage were their eality to become part of the mainstream consciousness. Would it be more of the incrementalism that one observes in Maryland? Or will it be more of an Endgame scenario as envisioned by Derrick Jensen?

There is no way to know.
There are 5 or 6 'most probable' scenarios, but even those depend on some flips of the coin - will we avoid choosing sides and creating WWIII? Will we encounter some flu or other bug that is long overdue for pandemic that reduces energy demand via population? Will governments choose to 'buy' energy with more fiat currencies? Will we find some high energy surplus source that allows us to continue business as usual for another 20 years, thus drawing down stocks of other non-renewable inputs like water, biodiversity, soil, etc.?

All scenarios could benefit from efficiency, but efficiency is the answer to none. But it is the low hanging fruit that will extend the life of cheaper fuel so as to buy us time to focus more on what ends we want as society.

I have been learning from this website for six months.I have been amazed by what information has been offered.The comments have been posted by what I think are very smart and concerned people.Our world is in a very dangereous place in history.This is my very first comment on The Oildrum.My worry is that our governments have to do more and very fast.The oil situation should be brought to the attention of every citizen of The United States and Canada since between us we use the most.We in Canada use more fuel per person than the United States so we have as much or more work to do to educate our population before we crash hard.I think we will have to face this problem very soon THANK YOU VERY MUCH TIME WELL SPENT

Kudos to Maryland for being the first state to see the light. Their vision is exemplary.

I think we'll have electric cars with wireless connections to the grid within a decade. Plug-ins will be here in the next two years. All new construction should have grid-tied solar systems/shingles. Every home could be a battery,providing clean energy to the grid. But,we need to get started now. We need government mandates.

PPPLEASE . . . I live in Maryland. The Maryland Transportation Authority cut the public transportation budget for this year while allocating millions for new roads. Electricity rates have doubled in the last two years and will continue to go up even if there are small efficiency gains. Any progress made from better electric effeciency at the few public buildings that will be built by 2015 will be taken away by the thousands of miles of new roads that are going to be built, roads that are being built for cars running on GASOLINE. And the roads will be built by DIESAL guzzling machines.

I'm another Marylander, long time lurker, first time posting.

Yes, our Governor is pushing forward with the Intercounty Connector (ICC), which sounds like a dating service but is a $3 billion highway. They will raise taxes and tolls for this highway, and issue GARVEE bonds which pledge future transit funding to paying for this highway. The proposed Purple Line and Corridor Cities Transitway sit unfunded. The money needed for these is going to the ICC. For more on this boondoggle see

The legislation to stop the ICC mentioned on that site is now dead and the session is over. But you can still tell Governor O'Malley that his immortal soul is in peril due to his support for this highway at


Will do. Thanks

Hello, Nate

I live in Bend, Oregon, and recently had the follow guest editorial published in the local newspaper:

"A Modest Proposal

Energy prices are skyrocketing. Since Oregon imports most of its energy, this hurts all Oregonians – as unemployment data, foreclosures, and state revenue forecasts show. Until Oregon produces more energy, energy efficiency is our best defense.

Bendites will spend roughly $84.7 million for electricity and natural gas during fiscal 07-08 (Bend finance dept.). The rest of Deschutes County likely will spend a similar amount. Most of this $170,000,000 leaves the area, to pay for fossil fuel, and coal-fired and hydroelectric power. That’s an economic drag. Energy efficiency – insulation, upgraded equipment, smarter operation – could probably save 20% or more of this. Keeping $34,000,000/yr more in Deschutes County – providing more local jobs, more disposable income, and a better standard of living - is enticing.

Oregon’s government recognizes this. There are state tax credits, loan programs, and subsidies from the Oregon Energy Trust. Free or low cost energy audits help guide choices. These programs pay some of the cost of insulation, equipment upgrades, etc. – for those who choose to invest. But relatively few homeowners and businesses actually have invested in energy efficiency. Why?

Tax credits aren’t persuading those who pay no taxes. And some homeowners, especially retired or low-income folks living from check to check, can’t muster cash to invest in savings opportunities, even those with quick payoffs. Instead, we offer charity to help pay their utility bills. And many renters and businesses have no incentive to invest.

For homeowners, here’s the problem. The Oregon Small Energy Loan Program (“SELP”) has a minimum loan size of $20,000, and a loan origination fee of $525. Unless you own a mansion, upgrading windows or insulation requires a micro-loan, too small for SELP. If you qualify for credit, this puts you into the small dollar financing markets. There, high loan fees and/or interest rates make any but the fastest payback upgrades unappealing. If you don’t qualify, you can’t invest; all you can do is try to operate more efficiently. And loan officers, red tape, additional payments, credit card debt, etc. discourage many who’d otherwise happily cut their utility bills.

Renters and many local businesses occupy rented or leased facilities. They pay the utilities; somebody else owns the building. Why would a tenant invest to improve someone else’s property, when the pay-off takes longer than their rental or lease agreement runs? And for landlords who don’t pay the utilities, low cost trumps efficiency. The Oregon Department of Energy doesn’t favor increasing the Business Energy Tax Credit (now 35% except for renewables). ODOE would rather not further enrich those landlords who knowingly chose to build inefficient low-first-cost buildings to maximize leverage and profits.

The result: We have lots of energy efficiency projects, “low-hanging fruit” with short paybacks and attractive savings, that aren’t getting done. This holds true throughout Oregon. Statewide, we spend about $10 billion/year on energy and motor fuel; $8 billion goes out of state (ODOE).

The answer is 100% public financing for qualified energy improvements.

Public infrastructure - roads, bridges, water, sewer, airports, etc. – needs investment for a healthy economy. Privately owned buildings and facilities are also part of our infrastructure. Investing in their efficiency will benefit everyone. However, using additional tax money to pay for efficiency upgrades is controversial. It rewards those who built “on the cheap”, partly at the expense of taxpayers who built responsibly for high efficiency.

But, with the right financing mechanisms, public financing can happen without added taxes. The key is using anticipated energy cost savings to pay off the financing. Spread loan payments over a longer term than needed for savings to pay for the improvements. This makes monthly payments (lowered utilities plus loan principal and interest) smaller right away. During the loan period, loan P&I remains fixed, instead of rising with energy costs. And after the loan payoff, whoever pays the utility bills pockets the savings.

Most such loans would be “microloans” to homeowners, renters, and small businesses. Origination costs for traditional loans would be impractically high. Streamlined processes are needed, so just verify that improvements are justified by savings, and that buildings will last longer than the loan term.

But what about collateral and paperwork to guarantee repayment? Forget it. Make loan repayment part of the utility bill. Non-payment causes a utility disconnection, same as always. And non-payment risk is lowered, since bills decreased when improvements went into service. The loan is applied for by, and follows, whoever is paying the utility bill. Improvements happen without additional tax dollars. City, county, or state revenue anticipation bonds provide capital at low rates.

This proposal, on it’s own merits, makes sense. In the context of future energy shortages and global warming, it’s imperative. Have special interests prevailed on Republican legislators to block this? If Oregon or Federal legislators can’t get this done, local governments should. Just do it!"

There are some oversimplifications in the OP-ED, due partly to an 800 word limit for guest OP-EDs.

However, it will be intesting to see what happens to this proposal, since it steps big-time on toes of several special interests, namely utility cos, banks, and landlord/property developer community.

I also saw on PBS "NOW" (3/28/08) that a program with some of these features is in pilot phase in Cambridge, MA.

How does my "modest proposal" compare with the Maryland program?

Les Lambert

First time I've posted to "oil drum" - I've lurked here for a long time, although I don't read everything (not enough hours in the day for that).

I'm glad Carl Henn pointed out that Maryland is road crazy - the highwaymen are robbing the public for their roads.

None of the local or state governments I have heard of who make pretenses of sustainability, environmentalism, etc. have canceled highway projects or other mega boondoggles because of concern about energy availability or melting polar ice caps.

The Inter County Connector is the residue left over from the old Outer Beltway proposal around Washington, D.C., and the State of Maryland is spending billions to bulldoze forests and parks in the path of this Pork Way. The idea that Maryland is supposedly concerned about energy efficiency and renewable energy is a bad joke even if they might install a few more solar panels some time in the future (not now). Maryland has almost no bicycle lanes and central Maryland is a grid of interstate type highways every couple miles ...

It's much easier to say that one is for the environment than to cancel stupid toxic highways. But rhetoric doesn't change pollution levels or cancel highway construction contracts.

To their discredit, some of the "environmental" groups in Maryland refused to even do substantive work to try to stop this enormous highway project. A big problem of parts of the environmental movement is they are too closely identified with a certain political party (the one symbolized by a donkey) so they are hesitant to challenge destructive projects promoted by that political party's politicians. True progress on the energy crisis is going to have to move beyond sectarian identification, but that doesn't seem likely any time soon.

I used to live in Maryland and am very glad that I do not any more.

Hey Permatopia -

good point about too many enviros being too soft on Democrats. Until both parties fight to be the more environmentally responsible, we won't sustain progress. The Republicans don't fight for environmental voters because they aren't likely to get them. Democrats don't work for our votes because they take us for granted. The fact that Gov. O'Malley can push through this highway and be hailed as an environmental hero proves they are right to take us for granted. We have set the bar way too low.


Maybe the big D environmentalists are too busy planting bay grass and baby oyster spat to fight the highway and other development [that kills even more bay grass and oysters....]

Most Maryland license plates on cars say "Treasure the Chesapeake". [There's irony for ya.]
Perhaps soon it will say instead: "The Chesapeake will Rise again!"

The environmental lobbyists are pushing an 80% emissions reduction by 2050. Won't post peak oil chaos guarantee that anyway?

"The environmental lobbyists are pushing an 80% emissions reduction by 2050. Won't post peak oil chaos guarantee that anyway?"

If we replace declining oil with transit, telecommuting, proximity, bicycles, walking and family planning, then perhaps we will reduce emissions without too much chaos.

If we attempt to replace declining oil with oil shale, tar sands, drilling everywhere and coal liquification, then carbon emissions could go up even as energy availability goes down. If we attempt to replace oil with biofuels, we will blow the last six inches of good topsoil out our tailpipes.

We are choosing which path to take as we fund the highways like the ICC and to leave unfunded projects like the Purple Line, Corridor Cities Transitway and the Rockville Street Car system. (Note that there is no proposal for a Rockville Street Car system - there ought to be.)

I note two things about the bill to reduce emissions by 80% by 2050:

1. It commits a future governor to reduce emissions while the current governor takes the credit and builds more highways.

2. The bill failed anyway.

Governor O'Malley wants credit from environmentalists for supporting this bill and campaign contributions from developers for building more highways. So far he has acheived this. Not good enough. We need transit, not highways. We need a frank recognition that our energy and climate problems require a real change in direction. The Governor's support of the ICC shows that he doesn't care about either peak oil or climate change.