It's a Small, Energy-Strapped World After All!!!

Why we need Green Building

Written by Brian Hicks
Posted March 29, 2006

As you may recall, last week we briefly touched on green building momentum in the U.S.

Thanks in large part to escalating energy prices and looming water shortages, green building practices in the U.S. are picking up steam.

Since writing that article however, I've received a number of e-mails from those outside the U.S. who were quick to sing the praises of green building momentum in their own countries...and felt I should address those as well.


The Immediate Necessity

The energy crisis we face today does not discriminate. You know better than anyone that from war-torn African nations to the shiny, plastic hills of Los Angeles - the reality of peak oil is upon us. And if aggressive measures aren't taken now - a global, economic meltdown eagerly awaits.

According to the Association for the Study of Peak Oil and Gas, in the last 30 years, not one new oil field capable of producing more than a million barrels a day has been discovered.

And of the 35 giant oil fields uncovered in the last decade, none will have a production capability above 1,000,000 barrels per day.

Not to mention, of the 15 fields that did have this kind of capacity 20 years ago, only 4 can still produce that much today:

Ghawar (Saudi Arabia) 1948
Kirkuk (Iraq) 1938
Burgan Greater (Kuwait) 1927
Cantarell (Mexico) 1976

With oil demand estimated to reach 103 million barrels per day by 2015 (this is a conservative estimate) and no real validation of any new, significant oil fields on the horizon - energy companies aren't the only ones looking for an escape hatch.

While oil giants like BP and Shell continue to take baby steps towards energy alternatives, building developers are taking the appropriate measures to insulate their industry from getting sucked down into the fossil fuel sinkhole.

You see, for developers, energy efficiency is no longer just an added bonus offered to clients - it's an immediate necessity that will shape the way the international community will build its homes, industrial complexes and commercial buildings this century.

It's a small, energy-strapped world after all

According to Chinese Construction Vice Minister, Qiu Baoxing, by 2020, China will have transformed all existing buildings into energy-saving buildings. And buildings built after 2005 will embrace new technology that could save 65 percent more energy per square meter compared with conventional buildings.

(The World Bank has estimated that between now and 2015, roughly half of the world's new building construction will take place in China)

Based on water shortages and dwindling oil supplies, the overall potential for green buildings in India is also picking up speed, with some estimates showing a potential worth of more than US$4 billion by 2010.

Back in 1997, the Australian government moved forward with its own green building practices which have since provided a 15% energy reduction, saving taxpayers about $30 million a year.

And just two years ago, Jose Montilla, Spain's Minister of Industry, announced that beginning in 2005, anyone who intends to build a home will be obliged to include solar panels in their plans.

Subsidies vs. Substance

An argument I often hear from opponents of green building integration is that much of this momentum is being inflated via government subsidies. Especially in reference to most European nations.

Well there's no doubt that subsidies are allowing renewable energy markets to become more competitive in a world dominated by fossil fuels. But let's face it - no lawmaker is going to dole out a dime unless he's getting a kick-back or there's a significant threat to his tenure.

In other words, any savvy lawmaker who's looking to keep his job is most likely going to support some type of initiative backing renewable energy and green building.

And that's because the reality of a world energy crisis is real.

Don't believe it?

Well, just look at the state of Maryland for instance, where lawmakers are now frantically fighting Baltimore Gas and Electric to keep the utility from hiking electricity rates more than 70%!

That's right. Starting in July, Maryland residents (Voters!!!) could be paying as much as 70% more for their electricity.

It's amazing how important green building and energy efficiency has become for Maryland lawmakers over the last few weeks!

The simple fact is that green building allows for significant reductions in energy and water consumption. Subsidies or not - these conservation practices must be integrated if we have any intention of avoiding a complete meltdown of our energy infrastructure.

If this weren't the case, not one single subsidy for green buildings would exist.

Of course, you may still disagree - citing 'studies' funded by any organization or company that has something to lose from green building initiatives. And that's fine; because my intention here is not necessarily to change your mind regarding the advantages of green building over conventional building. But it is rather to show you how green buildings are well on their way to becoming the global status quo. And those who are smart enough to tap this market now are poised to clean up as more and more lawmakers and developers require green building practices in the immediate future.

Until next time...

Jeff Siegel
Managing Editor, Green Chip Stocks

Visit Green Chip Stocks for the latest news on the publicly-traded companies already profiting from the green building movement.