Points to Ponder: The ROI on Energy Literacy - A (very) Preliminary Analysis

Points to Ponder is an occasional series of thoughts (points) that come to mind and that I can articulate in the written word. They are ponderings because I really do not have any clear answers to the points under consideration.

By John Tobin

Now that I got your attention with the title of this article, in the interest of full disclosure, I will admit that this analysis will concentrate on trying to define the investment component of the return on investment (ROI) calculation.

It is not the return on my investment that concerns me; it is the return of my investment.
-Will Rogers

Of course the first problem is to determine what kind of efforts there are in improving Energy Literacy in the public. To me Energy Literacy is a fundamental knowledge and appreciation of how Energy, (BTUs and KWHrs in any form), the Economy (how energy fuels all economic activity) and the Environment (the environmental impact of producing and consuming energy) are irreversibly interlocked. 

Giving credit where credit is due, I want to thank the Obama administration for being the first in government to blatantly admit that energy policy and environmental policy are one and the same. I couldn’t agree more. It is my hope that as Energy Literacy evolves, that the economic E will get equal weighting. (Note: This will take some work in that there are several environmental laws that preclude the consideration of costs in their enforcement. But I digress.) So I will probably only be able to concentrate on the energy E at this time.

Why Bother

I must assume that the investment in energy education programs is justified based on the novel idea that an informed consumer base is good for business and may even lead to well-reasoned, sustainable energy policy. If this goal is too overwhelming or is not seen as a part of the energy industry’s job, these investments should cease and you, dear reader, can stop right here.

But, I have to hope that we all truly do want to see an energy literate public. So let’s soldier on.

Number of Programs

Energy education programs are aimed at building the foundation of energy literacy and they are the easiest area to count.

The annual listing of Energy Education Resources for K-12 by the EIA lists about 160 such programs. To qualify for this list any program must address some aspect of energy, be targeted to K-12 and have material that is free or very inexpensive. Several years ago the IOGCC listed over 175 programs, only in oil and gas, and only 11 were common to the EIA list. The EIA estimates that their 160 represents at most 1/8 to 1/4 of all “energy education” programs available.

For this very preliminary analysis we can assume that there are some where between 600 and 2,000 programs. I will use 1,000 as an easy number to work with. I should note that this does not include “educational material” that is also used for name recognition and advertising. This also does not consider actual K-12 classroom efforts funded directly by school systems.

Cost per Program

These literally hundreds of programs addressing some aspects of energy are funded by the energy industry and government grants, etc. Non-governmental funding ranges from 0% to 100%. At this stage of sophistication (or lack thereof) I will use a level of 50% coming from the energy industry and other private sector sources.

The range of annual funding for each program appears to be from $50,000 to $5,000,000. Here I will assume a most likely level of $250,000. Therefore, 1000 programs at $250,000 at 50% from non-governmental sources would suggest that the private sector spends over $100 million per year on energy education.

While this funding serves a noble cause and has the benefit of being a “charitable” donation for tax purposes, it has yet to result in an energy literate public that truly appreciates the “realities” of energy.

Collaboration, Coordination, Cooperation

David O’Reilly, former CEO of Chevron noted, “there are hundreds of energy education programs available. The issue was that they were not coordinated, sustainable, nor sufficiently resourced.”

The Energy Education Form held in January 2006 in response to EPAC 2005 reached essentially the same conclusion. However, real action in this area is yet to take hold. This situation should bring into serious question the private sector’s return on its investment in energy education.

One solution to make energy education more effective (and possibly see a real return) would be to use the private sector’s power of its purse strings and invest literally only pennies on the current dollars invested in a program to force these 3 C’s. Such an effort could also identify areas of duplication that may warrant a 4th C, consolidation.

This “Effectiveness Program” would be able to:

• Identify areas of weakness and recruit resources to fill such holes.

• Direct the appropriate programs and resources to address critical issues that may arise.

• Build the knowledge base in the public so that specific concerns will be easier to explain to communities impacted by energy development.

As I ponder this issue on the anniversary of the “Day the Music Died” in that Iowa cornfield, let us pray that the concept of a 4 Cs effort at energy education hasn’t also died. I’d really like to see a return on the industry’s investment in energy education.

So no more ranting on about how energy-illiterate the public is, just “Rave On”.
-Buddy Holly


John Tobin has been the Executive Director of the Energy LITERACY Project. For more of John Tobin’s insights on energy price forecasting see: Confessions of an Energy Price Forecaster. Please send your ponderings on this or any other topic to John at jtobin3es@gmail.com.

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