ANSI President Joe Bhatia on the Importance of Energy Management Systems

Keynote Remarks of S. Joe Bhatia, President and CEO of the American National Standards Institute at the APEC Conference on Implementation of Energy Management Standardization (ISO 50001), September 13, 2011, San Francisco, CA

Good morning, everyone. My name is Joe Bhatia, and I am president and CEO of the American National Standards Institute.

I am very pleased to be part of the APEC Conference on Implementation of Energy Management Standardization, and am honored to share my thoughts on how APEC members can harness ISO 50001 to meet the global energy challenge.

What is ANSI?

For those of you who don't know us, ANSI is a non-profit organization that coordinates the U.S. standards and conformance system - a system that relies upon close collaboration and partnership between the public and private sectors.

ANSI is the U.S. member body to the International Organization for Standardization (ISO), and via our U.S. National Committee, to the International Electrotechnical Commission (IEC). A key U.S. participant in the international accreditation community, ANSI and our affiliates ANAB and ACLASS are members of the International Accreditation Forum (IAF) and the International Laboratory Accreditation Cooperation (ILAC). We also participate actively with the U.S. delegation to the APEC Subcommittee on Standards and Conformance, and as a U.S. representative to the Specialist Regional Bodies, specifically the Pacific Area Standards Congress (PASC), the Pacific Accreditation Cooperation (PAC), and the Pan American Standards Commission (COPANT), where I have the honor of serving as the vice president.

I am here representing thousands of our member companies, organizations, and individuals who rely upon standards and conformance to increase efficiency, demonstrate quality, improve competitiveness, and foster international commerce. For more than ninety years, ANSI and its members have worked to demonstrate the strength of market-driven, standards-based solutions that are characterized by consensus, openness, and balance. Currently, we are tackling such front-page issues as cyber-security, electric vehicles, anti-counterfeiting, and alternative energies.

The Critical Role of Standardization

Before we start talking about ISO 50001 and its implementation, I would like to lay some groundwork on the importance of standardization.

Standards and conformance play a critical role in the economy, impacting more than 80% of global commodity trade. The jury's still out on what that will mean for 2011, but in 2010, that 80% impact came to more than $13 trillion.

It is clear that effective utilization of standards and conformance promotes technological interoperability and the global competitiveness of all businesses. And greater cooperation and information-sharing will improve the bottom line - clearly a top priority in today's economic landscape. When individual businesses do well, there is a corresponding improvement in our national economies.

The Role of Standards and Conformance

But standards and conformance also play another important role in the global marketplace. They create efficiencies, establish a level playing field, and ensure consistent benchmarks for products, systems, services, and personnel across borders. Though our nationalities, customs, and professional perspectives are different, we are all consumers. We rely on standards and conformity assessment programs to keep us safe, protect our environment, assure the quality of the products we buy, and boost the effectiveness of the systems we rely upon.

While a standard is a technical expression of how to make a product safe, efficient, and compatible with others, a standard alone cannot guarantee quality or performance. Conformity assessment provides assurance to consumers by increasing their trust that personnel, products, systems, processes, or services fulfill the requirements of a voluntary standard.

Accreditation Adds Value

Certification bodies, testing laboratories, and inspectors have a critical role to play in assuring that products, personnel, and services comply with standards. But how does a manufacturer know which certification body, lab, or inspector to use to test his products or systems? If he wants to provide optimal quality assurance to his customer, he may wish to look for a body that has been accredited according to international standards. Accreditation is an independent, third-party assessment of a certification body's competency, and it is a critical component of assuring marketplace confidence in products, systems, and personnel.

What is Energy Management?

Now that we have defined our terms, let us turn our attention to ISO 50001 and the importance of energy management systems.

To put it simply, energy management means taking action toward greater energy efficiency.

Different individuals and organizations manage energy in different ways.

A consumer at home who turns out lights and unplugs unnecessary devices is conducting energy management.

A government agency that sets efficiency policies and provides incentives for compliance is managing energy use.

And individual businesses that put efficiency measures into place are saving money and saving energy through smart resource management.

Why is This an Issue?

Why is energy management such a big issue? Because effective energy use is critical for everyone - from the consumer at home to major, multi-national corporations.

Consider the use of energy through the supply chain of a business - from raw materials in the very beginning through to recycling at the very end.  Improved energy performance can help an organization to maximize its energy sources and energy-related assets, reducing both cost and consumption.

In addition to the economic costs, energy use can impose environmental and societal costs by depleting resources and contributing to problems such as global warming, greenhouse gas emissions, and other related environmental impacts.

Individual organizations cannot control energy prices, government policies, or the global economy, but they can improve the way they manage energy, and they can do it today. Their commitment to more effective energy management makes positive contributions toward reducing depletion of energy resources.  And the savings they can realize through smart energy use can make budget dollars available for other initiatives. 

When companies can link energy efficiency to profitability, it is a win-win situation.

Consumers Expect More

But there is another angle to consider as well. Today, there is more attention paid to consumer health and safety and environmental protection than ever before. These issues will only continue to gather more momentum, and it is in industry's best interest to be prepared to address them.

After all, consumers and buyers are more informed than ever, in a large part due to the internet. They expect more from the companies they buy from, and they lobby for more from the lawmakers. Companies that can demonstrate their environmental stewardship through effective energy management may find that their market share continues to increase in the coming years.

Getting Results

Here is a number that you will hear a lot during this conference: 60%.

ISO 50001 could influence up to 60% of the world's energy demand. That figure is based on information provided by the U.S. Energy Information Administration, and it is excellent news for everyone with a stake in the success of this standard.

But it may take some time to demonstrate the full impact of a standard of this magnitude. For now, we can say for certain that companies are already seeing substantial improvements in energy efficiency with positive financial impacts as a result of their reliance upon ISO 50001. During the pilot testing period, a Dow Chemicals plant reduced its use of energy by 17.9% over two years.  At the same time, CCP of Houston, Texas, achieved energy savings of 14.9%, a value of $250,000 a year with zero capital investment.

As little as one month after its release, benefits were already being experienced by early adopters of ISO 50001. Organizations around the world have reported substantial benefits associated with its early implementation, including significant reductions in power consumption, carbon emissions, and energy costs.

This is especially meaningful for the Asia-Pacific region, as the majority of our regional energy demands go toward industry and manufacturing.

Why a Management System Standard?

Management system standards like ISO 9001 and ISO 14001 have long been successful in helping organizations around the world to make substantial, continuous operational efficiency improvements. That is why ISO 50001 was also developed as a management system standard, which can either be implemented as a stand-alone system or assimilated into existing management systems.  And, like all ISO management system standards, ISO 50001 was designed for implementation by any organization, large or small, public or private-sector, in any country, with any type of energy source.

U.S. Participation

With world energy prices soaring and calls for energy security echoing around the globe, the demand for organizations to manage their energy performance has never been more acute. That is why the United States is so proud to have been a driving force behind the development of ISO 50001, and why we are honored to host this meeting here in San Francisco today.

ISO 50001 was developed by ISO Technical Committee 242, Energy management. The United States holds the chairmanship of this committee, with Ed Piñero, our MC for today's meeting, serving as chair of the committee. As the U.S. member body to ISO, ANSI serves as ISO TC 242 secretariat in partnership with ABNT, the Brazilian member body. And of course, we all owe our thanks to the U.S. Department of Energy and the Georgia Institute of Technology for their early dedication to this project, and strong support for the creation of an international standard for energy management. Without Georgia Tech's development of the original American National Standard for energy management, and DOE's excellent Industrial Technology Program and Superior Energy Performance initiative, we would not be where we are today.

ISO 50001

In 2007, ISO identified effective energy management as a priority area of focus and accepted our proposal to form a technical committee focused on this important work. In 2011, we have ISO 50001 - developed by some of the world's best technical thinkers to help solve one of our planet's biggest challenges. Truly, we have accomplished much, and we have a lot to be proud of.

I look forward to productive discussions over the next two days, and to hearing how all of you plan to implement this critical standard in your own country, industry sector, or organization.

Thank you for your attention.