Every day, at 4 p.m, half the lights go out at Intel's Folsom, Calif., offices.
It's part of the company's voluntary emergency conservation efforts in response to the state's energy crisis. What better emblem of California's bizarre energy pickle: 6,000 workers at the chip giant that creates the silicon that powers the very engines of the new economy -- the future! -- working in the dark.
"It still leaves enough light to work by. It's not dangerous," says Richard Hall, the company's director of corporate government affairs. "It's one specific measure that we've been taking every workday in the last four weeks."
The Folsom office turns out 50 percent of the lights during the peak electricity-consumption time of 4 to 7 p.m., when overall demand is at its highest as people get home and turn on the TV, the stove, the dishwasher and the microwave.
Last week, Hall went to Washington to meet with federal regulators and staffers from the office of Sen. Dianne Feinstein, D-Calif., to explain why Intel workers are laboring over their monitors under mood lighting, and to find out what the government plans to do to assuage California's electricity woes. After helping drive California's high-tech and dot-com boom, Intel is now in the weird position of lobbying the government to help it turn the lights back on.
"Some people say, 'You guys helped create the Internet economy, and the Internet economy runs on electricity.' Yes, guilty as charged. We did, and it does," says Hall. "The issue is really the Internet economy."
Can California's power grid handle the Net? "The electric system in California was not originally designed for a high-tech industry. As the high-tech industry has grown, so has the level of technology that we have to provide, or try to provide," says Scott Blakey, a spokesman for PG&E, one of the state's largest utilities. "You've taken what essentially is a 19th century system of poles and wires, and using late-20th century technology you've tried to meet the needs of what is going to be a 21st century industry."
Some analysts, bolstered by a study declaring that the Internet is responsible for fully 8 percent of all national electricity consumption, assert that the Net itself is responsible for spiking demand to unprecedented heights. The new economy, it seems, is an energy hog. Never mind that other researchers have debunked the 8 percent figure as absurdly inflated. President-elect George W. Bush has already touted it in discussing his energy policy. What better reason could there be to allow oil drilling and coal mining in virgin wildernesses than the need to keep the Net running?
That's right. There's a convenient new villain in the California energy crisis, and it's not the utility companies that can't meet demand, crying bankruptcy and begging for a bailout by the government. It's not the greedy oligopoly of power generators cashing in on the state's failed, half-baked deregulation scheme. It's not even the environmentalists, whose green-friendly regulations make building a power plant in California about as easy as trying to raise venture capital for an e-tailer in 2001. Nor is it the conservation-clueless customers who can't even be bothered to turn off the lights when they leave a room.
No, it's the Internet. In addition to taking the heat for everything from kiddie porn to the gentrification of urban neighborhoods, the Net is now at fault for overloading our national power infrastructure.
But wait a minute. Wasn't the Net supposed to conserve energy by making businesses run more efficiently? Don't computers use relatively little energy compared with refrigerators and cars and washing machines? How much power does it really take to run the global computer network?
Mark Mills and Peter Huber are the Chicken Littles of the debate over electricity and the Internet. The two conservative analysts publish the Digital Power Report and have testified about the increased demand for electricity occasioned by the Net everywhere from the pages of Forbes and the Wall Street Journal to a congressional regulatory subcommittee. A year and a half ago, Mills published a report for the Greening Earth Society, a nonprofit backed by coal interests, asserting that by 1998 the Internet was already consuming about 8 percent of U.S. electricity and that the entire "digital economy" accounted for fully 13 percent. Moreover, he forecasted that in the next 20 years the Internet -- "directly and indirectly" -- would come to consume 30 to 50 percent of all electricity in the country.
"It shouldn't be surprising that we're using a fair amount of electricity to keep the Internet economy hot," says Mills. "This virtuous economic circle is very powerful, and everyone wants to act like it's free, like there's no energy cost to it, like living without food." Mills and Huber want to highlight the dependence of so-called new-economy companies, and all the wealth they inspire, on the oldest of the old economy -- power companies. "The digital economy," they wrote in the Wall Street Journal, "which most everyone loves, is completely dependent on the big central power plant, which most everyone hates."
So while Silicon Valley lobbyists busied themselves arguing for more H-1B visas, did they forget to worry about what keeps the machines running for all those workers to type away on? "They got very focused on bringing in enough labor and talent, and they forgot about power," says Mills. "Twenty years ago, it was inconvenient to have a brownout. It's a killer in the silicon economy. It's blue-screen death."
That specter of the blue screen of death has been more than enough to encourage Silicon Valley CEOs such as Intel's Craig Barrett to start throwing around their political weight to advocate for the construction of new power plants -- and fast. And who can blame them when they've been reduced to shutting off lights and bracing for rolling blackouts?
But increasing demand for electricity is only one factor in California's current energy woes -- and the overall increase has not been especially dramatic for a time of economic boom. According to the California Energy Commission, electricity demand in California grew at a rate of about 2 percent a year in the late '90s -- the height of the Net boom. It's not a staggering percentage. In the go-go late '80s, between 1987 and 1990, U.S. electricity consumption grew 3.3 percent a year, according to the Electric Power Annual, a publication of the Energy Information Administration.
California's power problems are rooted in a mix of factors, most importantly a flawed deregulation scheme that gave little incentive for power generators to build more capacity in the short term to meet demand. As part of the 1998 deregulation, utility companies sold off much of their power-generating capacity to a handful of wholesalers. But once they enjoyed the market power to raise prices, wholesalers haven't been in a rush to raise capacity. They've taken a wait-and-see attitude about building more power plants -- a position that's somewhat understandable in a state like California, where stringent environmental regulations mean the construction of a new plant can take an average of seven years, compared with three years in a more permissive state like Texas. And with utility companies unable to pass on wholesalers' rapidly rising prices to customers without government permission, their road to bankruptcy has become painfully obvious.
"The whole California electricity crisis is not a crisis related to rapid increase in demand. Demand growth has not been out of the ordinary," says Jonathan Koomey, a scientist and group leader of the End-Use Forecasting Group at Lawrence Berkeley National Laboratories. Although no one could have predicted how quickly California's recession would turn from bust to boom, moving from a power surplus to increased demand, a 2 percent annual increase is hardly a never-before-seen consumption surge.
So what's the explanation for Mills and Huber's 8 percent figure? "If the claims that they're making are true, you'd expect to see vast increases in electricity demand and you are not," says Koomey. Scientists at Lawrence Berkeley have refuted Mills and Huber's assertions point by point, based on their own research. They put the figure for all office, telecommunications and networking equipment at 3 percent of the total electricity used in the United States.
It comes down to a war of watts. For example, Mills and Huber argue that after factoring in all the networking and telecommunications equipment required on the back end, like routers and servers, a PC and its peripherals connected to the Net use 1,000 watts of power, which is as much the electricity used by 10 100-watt light bulbs. But Koomey and his group think that figure is wildly exaggerated. Koomey says that a PC consumes only 50 to 200 watts and that factoring in the back-end equipment adds only about 15 watts to the PC's electricity consumption.
Mills and Huber also assert that a Palm Pilot that is plugged into the Net consumes as much energy as a refrigerator -- a nice sound bite that has been widely quoted. But is it true? Koomey says he sent an e-mail to Mills requesting documentation: "I am trying to reproduce your estimate about the electricity use of a Palm Pilot equaling that of a refrigerator, because of the network electricity use. Is there a place where this calculation is documented?" Koomey says he repeated this collegial request eight times over two months, but got no response.
In a rebuttal to Mills' testimony ("Kyoto and the Internet: The Energy Implications of the Digital Economy") to the House Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs, Koomey wrote, "In the past year and a half, I have been witness to an extraordinary event: An analysis based on demonstrably incorrect data and flawed logic has achieved the status of conventional wisdom."
Mills defends his 8 percent figure by saying that it's only an estimate: "The total may be somewhere between 5 percent and 6 percent. Our number is an estimate. No one knows for sure. We know it's not zero. That's why the whole debate is sort of silly in a way, if you're focusing on a few percentage points."
But Koomey contends that a difference of a few percentage points does matter. "This whole set of bogus numbers has gotten so much play because it is convenient for certain interests to make it sound like growth has gone up at a ferocious pace," he says. "The people who want to build power plants would like everyone to think that there is huge demand growth so we can reduce environmental regulations. I think that we have to build power plants, but I also think that people are trying to create a sense of urgency to make it easier for them to argue for their interests."
John "Skip" Laitner of the Environmental Protection Agency's Office of Atmospheric Programs sees Mills and Huber's argument as a scare tactic. "I began to think that this is an effort to push people to think: 'We're going to lose the new economy if we don't have all kinds of power to make sure the Internet is maintained.' There are some areas of the country like Seattle or California or Austin, Texas, in which there are some hot spots -- an unexpected surge in data hotels or server farms -- and other economic activity that may be causing a temporary mismatch between the planning and the actual load that is required, but it's wrong to translate that into a nationwide trend," Laitner says.
All the quibbling over wattage would be little more than a scientific tempest in a teapot if it didn't have such far-reaching implications for how to solve the power crisis in California. As Huber wrote in Forbes, "Somewhere in America, a lump of coal is burned every time a book is ordered online." And, in fact, it's the coal industry that's licking its chops as politicians buy into the fantasy that the Internet will soon gobble up half the power-generating capacity in the United States.
Mills did the original research for his report "The Internet Begins With Coal" as a scientific advisor for a group operating under the name Greening Earth Society, a nonprofit affiliated with the Western Fuels Association that also promotes the idea that there's no such thing as global warming. The society's fossil fuels Web site spins a noble parable, with no apparent irony, about how God above put coal on earth for the greater glory of our humble species: "Fossil fuels are one of the Creator's greatest gifts to humankind. For eons, coal, oil and natural gas lay untapped and ready for exploitation by humans to create an environment on earth conducive to the spectacular success of life on earth."
The Internet needs more coal, so put on your miner's hat and start digging?
A close look at the numbers, say some researchers, suggests that the opposite is true -- that the Net may actually be helping to drive down overall energy demand. Joseph Romm, a former assistant secretary at the U.S. Department of Energy, notes that from 1992 to 1996 total energy demand grew at about 2.4 percent a year in the U.S., during a period when the gross domestic product was growing at a rate of 3.2 percent a year. But from 1996 to 2000, when the Net boom was really taking off, the gross domestic product grew at an average of 4 percent a year while energy demand grew at a rate of only 1 percent. In other words, the growth in energy demand was far below the growth in the overall economy; as the economy grew hotter and hotter the rate of increase in the demand for energy actually slowed.
Electricity consumption numbers demonstrate a similar slowdown, says Romm, who is now executive director of the Center for Energy and Climate Solutions. "The pre-Internet era saw electricity demand rise 2.9 percent per year," Romm wrote in an article for the center's Web site. "Since 1996, electricity demand has risen only 2.2 percent per year. And this has all occurred in spite of higher GDP growth since 1995, hotter summers (1998 was the hottest summer in four decades in terms of cooling-degree days; 1999 was the second hottest summer), and less support by utilities for demand-side management, all of which would normally lead to higher growth in electricity demand."
"It's pretty clear that something big is happening in the way that the U.S. economy uses energy," says Romm. "I don't think that anyone can look at the energy data and conclude otherwise ... We're getting a lot of growth from the Internet economy -- software, hardware and services. Those sectors of the economy are not very energy intensive, no matter what Mark Mills or anybody says. They're just not."
Some advocates of the Net assert that it will actually result in overall energy savings by making businesses in sectors like transportation more efficient. But it's hard to see how whatever savings the Net may be putting in the pockets of certain industries will get the lights back on at Intel in Folsom, Calif.
Then again, blaming the Internet for the power crisis won't solve Intel's problems either.