DST: Energy Saver or Waste of Time?

DST: Energy Saver or Waste of Time?
If you live in the United States or Canada, you have likely already engaged in the annual ritual of "springing forward" to begin Daylight Saving Time (DST).

If you live in the United States or Canada, you have likely already engaged in the annual ritual of "springing forward" to begin Daylight Saving Time (DST). Thanks to the Energy Policy Act of 2005, DST starts three to four weeks earlier and ends one week later than it did prior to 2007. If you live in Mexico, the Caribbean, Europe, the former Soviet Union, and certain other regions in the Northern Hemisphere, you will probably set your clocks ahead at some point in the next few weeks. For those in parts of Brazil and Australia as well as several other countries lying south of the equator, your extra hour of daylight has either ended or is about to end.

Although DST is often touted as a means of conserving energy, the benefits of the practice have long been called into question. "There is no evidence that DST saves energy overall," said William F. Shughart II, Professor of Economics at The University of Mississippi and a Senior Fellow at The Independent Institute, a non-profit, non-partisan research and educational organization that sponsors studies of social and economic issues.

Diagram

SOURCE: webexhibits.org/daylightsaving

A Conservation Flop?

Even a major proponent of DST, the U.S. Department of Energy (DOE), has acknowledged that the practice offers unimpressive results. According to an October 2008 DOE report, the shift led to a 0.5% decrease in U.S. electricity use for each day of this "Extended DST" (EDST) in 2007 and a 0.03% savings for the year as a whole. The savings for the eight-month-long period translates into 1.3 billion kilowatt-hours (kWh), or enough electricity to power approximately 122,000 average U.S. homes for a year. To put this into context, the DOE has reported that total U.S. residential demand for electricity in 2007 was nearly 1.4 trillion kWh - a figure more than 1,000 times greater than the savings attributed to EDST.

Another 2008 study, conducted by University of California, Santa Barbara researchers, reached a different conclusion. Using a dataset comprising 7 million observations on three years' worth of monthly billing data for the majority of southern Indiana households, the investigators found that overall electricity demand increased by 1%. In addition, the study attributes to DST a 2-4% increase in electricity consumption during the fall. The investigators, Matthew J. Kotchen and Laura E. Grant, focused on Indiana because the state was undergoing a transition that offered a rare opportunity to empirically gauge the effects of DST on electricity consumption. The entire state adopted DST in 2006; previously, some of the state's counties did not follow the practice. The researchers' data spans the years 2004 through 2006.

In terms of national traffic volumes and motor gasoline consumption for passenger vehicles for EDST in 2007, the changes are less impressive. In fact, DOE states in its 2008 study that they were "statistically insignificant" and could not be attributed to EDST. The federal government's extension of DST is not unprecedented. In fact, it extended DST to eight months in 1974 and 1975 to conserve oil as a result of the Arab Oil Embargo of 1973. The U.S. Department of Transportation found that the extensions saved approximately 600,000 barrels of oil in each of the two years. This annual savings represents less than 1% of the oil produced in the U.S. during that period. According to the DOE's Energy Information Administration, annual domestic crude oil production for 1974 and 1975 totaled approximately 3.2 and 3.1 billion barrels, respectively.

A Global Patchwork

An area in which DST has had a significant impact is international commerce. "It has complicated international business travel and telephone communications because the DST schedule in the U.S. no longer coincides with those of the rest of the world," said Shughart, who has estimated the annual cost of changing clocks twice a year to be $1.7 billion. "It is not consistent with economic theory to argue that the opportunity cost is nil if one changes clocks in the evening or when one is off work - time has value 24/7."

The table below illustrates the disparity between the U.S. EDST schedule with time zones in commercial hubs worldwide. In 2010, EDST began on March 14 and will end on November 11. Coordinated Universal Time (UTC) is the time standard that is considered equivalent to Greenwich Mean Time (GMT) at 0° longitude, commonly known as the Prime Meridian.

Diagram

SOURCE: webexhibits.org/daylightsaving

Given the patchwork of start and end times for DST in the places that practice it, one can appreciate the potential difficulties it can create for companies that transact business worldwide and must do so in a time-sensitive manner. Using Houston and New York as examples, note that during Standard Time (ST) the cities' local times are six and five hours, respectively, behind UTC. When these cities began EDST earlier this month (thus moving to UTC-5 and UTC-4, respectively), other cities that begin DST later - such as Rio, London, and Moscow - were still following ST. Furthermore, businesses with a multinational reach that are based in cities where DST is not practiced -- such as Dhahran, Singapore, and Perth - need to stay abreast of the dynamics of time differences elsewhere and adjust their operations accordingly.

Bad for Health But Good for Cookouts?

Aside from DST's debatable impact on energy efficiency, various studies have linked the practice to negative health and safety outcomes. For instance, a 2009 Michigan State University study links sleep deprivation from springing forward to an increase in workplace injuries. In addition, Swedish researchers in a 2008 New England Journal of Medicine article reported a spike in heart attack cases in the first few days of DST as well as a decrease associated with falling back. Other researchers have attributed lower workplace productivity to DST, arguing in 2003 and 2007 that the time change throws the natural human circadian rhythm out of balance.

Shughart, who advocates a wholesale repeal of DST, does admit that the practice is good economically for purveyors of backyard cookout supplies. "There are no pros, except for the obvious benefits of DST to the manufacturers of charcoal briquets, propane, and barbecue grills, who lobbied in favor of the recent extension," he wryly concluded.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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