Seattle CEOs Ready for the New Energy Era
This spring, Rocky Mountain Institute’s founder and Chief Scientist Amory Lovins ventured away from the arid mountains of Colorado—where he has been holed up for many months writing a book called Reinventing Fire—for the damp seascape of Seattle.
There, Lovins and RMI’s Chief Executive Officer Michael Potts gave an audience of entrepreneurs and business leaders a taste of some of the new material from the forthcoming book and accompanying Reinventing Fire website and campaign, a culmination of a year-plus research effort by much of the staff at Rocky Mountain Institute. The core topics—energy efficiency and renewable energy—are the same ones RMI was largely founded on and has pursued for the past 29 years. But, Lovins says, Reinventing Fire—a detailed and integrated sector-by-sector roadmap to get our nation off coal and oil by 2050 and natural gas shortly thereafter—is what those 29 years have been preparing us for.
RMI looks to business, enabled by smart policy, to lead the transition, so when the Young Presidents’ Organization (YPO), a global network of young chief executives, invited RMI to address its Seattle chapter, Lovins and Potts were both eager to see how this first talk about the new roadmap would play with a business audience. (Potts is a longtime and active member of YPO.)
YPO was founded in 1950 by manufacturer Ray Hickok who, at the age of 27, inherited his family’s 300-employee company in New York. He and other young presidents began meeting regularly as a way to become better leaders by learning from each other. YPO has grown to 17,000 members around the world. The organization provides members with access to unique educational experiences, resources, alliances with top learning institutions, and specialized networks to enhance their business, community, and personal leadership. At age 50, YPO members transition to the World Presidents’ Organization (WPO).
YPO/WPO members are known as a particularly entrepreneurial group, so it may not be surprising that despite hydro-rich Washington state’s low electricity prices, this group of business leaders mainly seems to be already embracing business strategies built on energy efficiency, advanced technologies, and less reliance on fossil fuels.
For example, YPO member Greg Smith, founder and CEO of Urban Vision, a Seattle real-estate developer, owns the Nissan car dealership playing host to this YPO event. (A different member hosts an educational session at their place of business each month.)
Anticipating a strong market for cars in the environmentally friendly Pacific Northwest, Smith completed a LEED Gold renovation of this 1922 former industrial warehouse in South Seattle and opened a new auto sale and service facility, Stadium Nissan of Seattle, featuring Nissan’s new battery-electric car, the Leaf.
The space includes an auto showroom, retail area, service and waiting areas, service bays and “back of house,” where on this occasion this audience of entrepreneurs are seated in rows of wooden chairs on the cement floor.
Showing off the industrial nature of the space, Smith left raw the wood, steel and concrete finish materials, many recycled from the former warehouse space. A steel-clad “box” in the center of the space houses office and administrative functions. Energy-efficient lighting and heating systems cut costs and the overhead doors fully open to the street for ventilation. Supplementing natural ventilation, giant industrial oversize Big Ass Fans™ brand industrial ceiling fans spin slowly overhead, blade ends shaped like airplane wings. (Lovins explains: Big slow fans use far less energy than small fast fans.)
A Nissan Leaf is parked on the cement floor in the back of the dealership, a few feet away from the audience, where Lovins takes the podium to talk about Reinventing Fire. Appropriately enough, he starts with cars.
Lovins argues that carbon-fiber composites could halve cars’ weight and fuel use at no extra cost, paid for by simpler manufacturing and a smaller propulsion system. The cars could then be affordably electrified. According to Lovins, BMW, Audi and VW have already announced production of such cars for 2012–13. “If we made all autos this way, it would be like finding a Saudi Arabia underneath Detroit,” he comments. An added bonus, Lovins says: Superefficient carbon-fiber cars go very fast and are radar-stealthy.
Lovins summarizes Reinventing Fire’s recommendations for the building, industrial, and electricity sectors. He challenges the audience to imagine a future where 80+ percent of all U.S. electricity comes from renewable sources in 2050.
Reinventing Fire’s bottom line for 2050: no oil or coal burned, one-third less natural gas, no nuclear power, and trillions of dollars of net savings if carbon and all other externalities are valued at zero.
Following the Reinventing Fire overview, Smith and three other Seattle business leaders—Paul Skoglund, Bill Quigg, and Stephen Reynolds—take a seat on stools next to Lovins.
Michael Potts then proceeds to moderate a lively discussion between the men on the effects on business of transitioning away from fossil fuel, asking them: What are the obstacles, and who are the winners, and losers in this transition away from fossil fuel?
By way of introduction, Potts tell the audience, “The 20th Century was a race to consume and we won that race beyond a doubt. We are now in the next race: How to create the most value with the fewest fossil fuels. We are not prepared to win that race,” he says, adding that international competitiveness is the biggest concern of CEOs.
Panelist Paul Skoglund, a mechanical engineer, sounds a lot like Lovins when he says, “The biggest thing we’ve got to do is get past the single point cost and look at the whole system.” Skoglund developed the superefficient Delta P Valve for a firm he founded called Flow and Control Industries, a specialty manufacturer of high-performance pressure-independent control valves.
“People say you can’t afford to make this transition during a recession, but that’s when you most need to do it,” Lovins replies.
“All you have to do is drive I-90 to see what has happened with wind energy in the Columbia River Gorge,” Reynolds chimes in. Renewable energy is one of the best economic stimulants that this region has seen during a recession.” It’s a topic Reynolds knows something about. Now chief sustainability officer at Prefer West LLC, he’s the former CEO of Puget Sound Energy, a major regional utility that owns the largest solar facility in the Northwest and two major wind farms.
But whether economics is the motive, or climate change, or politics. doesn’t matter, says Lovins: “Let’s concentrate on outcomes, not motives.”
“They call it ‘green’ but it’s really about just being more efficient,” Smith says, gazing out across the electric cars parked behind the audience in his LEED Gold dealership.
Caroline Fluhrer couldn’t agree more. A young RMI consultant in the Boulder office’s Buildings Practice and a Seattle native with a no-nonsense practical call to action, she takes the podium to urge the YPO Seattle members to take tangible steps to get their businesses off fossil fuels.
“I think the hook—the reason to act—lies not in waiting for dire consequences to occur or for mandates to take over, rather it’s about using common sense and seizing opportunity,” Fluhrer begins.
“For me, it just comes down to how if there is an opportunity to build a building or to operate your business more efficiently and cost-effectively, why would you not do it that way?"
“At Facebook, they use the philosophy of ‘don’t be lame,’” she continues.
“Don’t be lame means doing what you think is most impactful, not just doing something to make money. So I think in this call to action, I will leave you with that. Don’t be lame. Stop just listening and learning about energy issues and figure out your reaction and then do something. Hopefully, Reinventing Fire can help you identify the opportunities that make sense for you and your company.”
As the audience disperses, panelist Bill Quigg, a founder of Gray’s Harbor Paper—which uses biomass to make steam for drying the paper and cogenerating electricity—hands out reams of Harbor 100, a Forest Stewardship Council-certified, 100 percent-recycled paper made with 100 percent renewable energy.
Seems like these YPOers are well on the road to heeding Fluhrer’s call.
(Reinventing Fire synthesizes and links innovations in technology, design, policy, and business strategies across these four sectors—transportation, buildings, industry, and electricity. For more details on RMI’s research and recommendations, please visit rmi.org and watch for the forthcoming book Reinventing Fire and accompanying website to appear later this year.)