By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

Traveling as much as I do, I get to meet a lot of very interesting people.

Like Wayne Shipp.

Shipp’s on his third successful career and, at an age when most people have long since retired, he’s building another multimillion-dollar business with a neat little device called a STEMS Energy Management unit.

Always on the lookout for new investment opportunities, I asked him about what it does and how it helps his customers.

Shipp, the president of STEMS Energy Management, cut right to the chase: “My device helps commercial and industrial customers save big on their electrical bills without huge capital investments.”

Then he added, “I can also help residential customers save an average of $25 to $100 a month off their electrical bills and I can prove it.” Needless to say, after that, he had my undivided attention for the duration of the flight.

By way of background, the problem with most current energy-reduction efforts, Shipp explained, is that various government programs, most notably the U.S. Department of Energy audits and various utility savings programs around the country, are only ostensibly about savings. In reality, they’re focused on replacing outdated equipment with more efficient models, such as high-energy-efficient motors. In other words, replace the old with the new.

Unfortunately, most people – and this goes for industrial and residential consumers alike – simply don’t have the money to replace everything, no matter what the economic benefits may be. That’s true “especially now,” in the midst of the worst financial crisis in decades, Shipp noted.

And that’s what makes Shipp’s approach so unique. Made by the New Mexico-based Delta Group Electronics, the STEMS unit is a high-tech “band-pass filter” that blocks distortions in electrical power above and below normal signal range. It blocks out power spikes and surges, and cleans up utility-supplied power, which is ideal for U.S. AC (alternating current) electric motors. The bottom line: STEMS reduces equipment wear and increases equipment life.

Using logic that somehow seems to escape the Washington crowd, Shipp figured out a way to bring old equipment up to new efficiency levels using current technology that Shipp’s team has developed.

“It’s a far higher return on investment and one that offers almost immediate payback in most cases,” Shipp said. “It can also add to facility capacity without adding additional infrastructure.”

This means that big customers – such as industrial facilities, for example – can actually increase production, without making capital improvements or correspondingly expensive electrical upgrades. In plain English, they can do more with less.

By all accounts the results have been extraordinarily impressive to date. One of their customers, a large natural gas facility, with a water-injection plant that runs nonstop decreased their kilowatt demand by an average of 13.11%, dropped their kilowatt/hour usage by 22% and their cost for electricity from $362.21 per day to a new low of $223.91 per day, which is a savings of 38.18%.

In general, the more expensive the electricity bill, the bigger the potential savings. And that’s just as true for large-scale commercial industrial facilities as it is for individuals, Shipp noted.

Take Southern California, for instance. Shipp noted that electricity there starts at $0.14 per kilowatt and graduates all the way up to $0.24 per kilowatt. The more you use, the more you pay.

The problem is that the power is so bad and so limited that many electricity users literally can’t get enough power. And the power that users do get is of such poor quality that it prematurely ages their electronics, fries their computers, burns out their motors and trashes their compact fluorescent bulbs.

Admittedly, this is something I’d never really thought about, so I asked Shipp why the power companies would deliver “bad power.”

“It’s not that they want to,” he noted, “but the reality is that most power companies, particularly those in high-growth areas, cannot sufficiently produce, buy or supply the required power to the end-users. Many transmission lines are simply maxed out.”

You’d think the power companies could step up, but thanks to years of no new power plant construction, and limited alternative-energy programs, that’s not always possible. What’s more, the costs associated with upgrades are horrendously expensive.

And that’s where the STEMS units come in. Shipp’s technology actually makes more power available to the users without further stressing the utilities. The benefit is that consumers get to pay less and keep their electrically powered devices around longer – “which, in the end run, costs them, and the power companies, less money,” Shipp said.

The STEMS device, which uses high-powered capacitors, can not only clean up the existing power, it can actually reduce the required demand on systems where the units are installed by as much as 20% to 25%. Which means that the big and small consumers alike using them pay no more at the meter.

For large-scale customers, like factories and oil fields, this is like getting “free money, and it’s a lot higher return on investment (ROI) if they need to expand their capacity” noted Doug O’Conner, a longtime power industry expert working for Pacificorp. As an added benefit, power-conditioning like these units provide should result in lower bills and longer equipment lifespans. Which is, exactly what Shipp says will happen when people put one of his units into operation.

Naturally, this sounded too good to be true, so I asked Shipp if we could put one of his STEMS units on our home in Beaverton, Ore., to “prove it.”

Immediately upon flipping the STEMS unit on, we noticed a 5% drop in our home’s power consumption as measured on the test-gear equipment he’d hooked up simultaneously. 

Over time, the reduction began to add up just as he said it would, and ultimately last summer over one 24-hour test period we netted a 67% decrease in the power we used. I could hardly believe my eyes. I still sometimes find myself feeling amazed by the results.

In the interest of full disclosure, I asked to leave the testing unit in place and we’re busy racking up more data that I can’t wait to report to readers later this year.

Over the several months I’ve had the unit installed, my wife and I have noted a drop in our power consumption and our bills have dropped. Anecdotally, my computer backup units, which track the power I use, reflect smoother, better conditioned electricity and as well as less transient voltage – exactly as Shipp promised. In addition, we’ve noticed fewer flickering lights in our house since we’ve had the STEMS unit turned on and we haven’t had to replace the kids’ battery chargers as often.

As good as the STEMs units are, Shipp is the first to admit that there may be places in the country where there are not measurable benefits or where a STEMS unit simply isn’t appropriate. One size definitely doesn’t fit all. As you might imagine, these are typically places with low electrical bills and cooler climates. Even so, if you’ve got a hot tub, electric dryers, air conditioners or other heavy appliances, you could still save money, but the payback may take time. In general, though, the hotter your climate, and the more expensive your electricity, the more effective a STEMS unit will be.

If you’re interested in buying a residential STEMS unit for yourself, Shipp and his team have created an easy-to-use Web site that can help you select the right unit and order it in less than 20 minutes. One size does not fit all and there may be cases where a STEMS unit simply isn’t cost effective.

The smaller unit costs $695, while the larger one is $795. Shipping for both is free. Installation should take no more than an hour of your favorite electrician’s time, according to Shipp.

Best of all, as I found out, the results truly are immediate but get better over time.

[Editor’s Note: With his ongoing “Pledge to Hedge” series, Money MorningInvestment Director Keith Fitz-Gerald is on a mission to reduce his household energy consumption by 25% through conservation - without altering or compromising his family's lifestyle. This is the seventh installment in a periodic series in which he updates us on his progress. For commercial and industrial applications please contact STEMS Energy Management at 360-904-8592.]

News and Related Story Links:

• Money Morning Pledge to Hedge Series:
  Pledge to Hedge: Three Ways to Lock in Low Gas Prices Right Now.

• Money Morning Pledge to Hedge Series:
  Pledge To Hedge: Travel Tips “They” Don’t Want You To Know

• Money Morning Pledge to Hedge Series:
  Pledge to Hedge: An Ancient Trick For Cooling Can Save Big Bucks

By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

Many of my neighbors here in Oregon are enjoying the big decline in gasoline prices, particularly those who still own SUVs, pickup trucks or any of the other fire-breathing, piston-clanking monstrosities I’ve seen on the road recently.

And no wonder. Gasoline prices in our neck of the woods have fallen between 60% and 70% since July, when oil closed at a peak price of $145.29 a barrel. Here in Oregon, that means that my wife and I don’t feel like we’ve been mugged every time we fill up.

But what happens when the prices start going up again? Global demand for oil will fall this year for the first time since 1983 as the world financial crisis saps demand, the International Energy Agency said a week ago. That has some people believing that prices will remain low.
But I wouldn’t bet on it – at least not for long.

The Organization of Petroleum Exporting Countries (OPEC) is making loud noises that it wants to see $75 a barrel again soon, which would represent a 70% increase from the $43.60 a barrel where oil closed yesterday (Tuesday). OPEC, supplier of more than 40% of the world’s oil, is ready to make a “big” cut in supplies when it meets in Oran, Algeria, today (Wednesday), Venezuelan Oil Minister Rafael Ramirez told journalists.

How much of a production cut we’ll see is anybody’s guess, depending on who does the cutting and who actually abides by the agreement over time. But we’ll know very shortly.

Russia recently announced, after years of going it alone, that it wants to actually join OPEC. Now OPEC has asked Russia to cut oil output by between 200,000 and 300,000 barrels a day to help revive prices, OAO Lukoil Chief Executive Officer Vagit Alekperov said in Moscow on Monday. And Russia may well do just that.

A price of $60 to $80 a barrel would be consistent with a global production cut of about 2.5 million barrels, and that’s a figure apparently supported by OPEC representatives we spoke to.   Leonid Fedun, OAO Lukoil’s deputy chief executive officer, noted in a recent Bloomberg News report that “there is a consensus [among members] to reduce production.”

This highlights something that’s often missed in the Western media, where the price of oil is typically associated with the price of gasoline and how that price impacts driving habits. According to CNN, MSNBC and a whole host of others, evidently that’s what matters to us.

But in OPEC-producing countries, it’s a different story. There the price of oil is more typically associated with external trade relationships and hard currency requirements that are policy level decisions often made at the expense of individual concerns. And I don’t have to remind you that most OPEC member countries don’t exactly specialize in freedom of choice, so the odds are high that what the energy ministers want, the energy ministers will get … but that’s a story for another time.

Here’s one other point to consider: With all the media’s focus on OPEC, there’s been little mention of China, India and the whole host of emerging markets that are still experiencing double-digit growth in oil demand. That’s not going away.


The bottom line here is that it would behoove interested investors (and people who like to drive less fuel efficient cars) to hedge any potential future rise in gasoline prices sooner rather than later. Here’s one quick and dirty way to do it.

If you drive 20,000 miles a year and your car gets 30 miles to the gallon at a time when fuel costs $1.75 a gallon, you are looking at an annual fuel bill of $1,166.67. If OPEC gets its wish and oil rises by 70%, gas prices may rise in tandem. Therefore, buying the equivalent share value of your projected annual fuel expenditure in such exchange-traded funds (ETFs) as the United States Oil Fund LP (USO), the iPath S&P GSCI Crude Oil Total Return Fund (OIL) or the United States Gasoline Fund LP  (UGA) could be just the ticket.

As prices rise, so, too, will the value of your investments. If prices fall further, you’ll obviously lose money, but you’ll be paying less at the pump at the same time.

Granted, what I am proposing is not a perfect hedge. Among other things, there are potential capital gains to contend with when you sell 12 months from now – taxes, transaction costs and a whole host of other variables that could come into play. At the same time, you could simply alter your driving habits, which, of course, would change the value of your calculations midstream.

None of that really is material, though. Hedges are never perfect.

But they do offer you a chance of “being in the neighborhood” when it comes to protecting your wallet from what could be vastly higher oil prices to come.

[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald is on a mission to reduce his household energy consumption by 25% through conservation - without altering or compromising his family's lifestyle. This is the seventh installment in a periodic series in which he updates us on his progress.]

News and Related Story Links:

• Bloomberg News:
  Crude Oil Rises as OPEC Members Prepare to Reduce Production.

• Wikipedia:
  Vagit Alekperov.

• Wikipedia:
  Rafael Ramirez.

• Forbes.com:
  Leonid Fedun.

By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

I don’t know about you, but I’m sick and tired of the airlines grumbling and whining.

I’m also frustrated with the endless list of new surcharges the airlines have come up with. Especially when there’s plenty of evidence that the airlines are just getting started and that they’re actually busy cooking up new ways to nickel and dime us.

Airline representatives and apologist analysts claim the new “fees” are necessary to help offset high fuel costs and to ensure the airlines’ survival. Baloney. The airlines can no more surcharge their way to profits than I can go to the moon.

The way I look at it, the “surcharges” that are being imposed are a sort of “management incompetence tax” that’s being foisted on us to make up for 40 years of airline mismanagement and perennially unprofitable performance.

It’s clear, to me anyway, that additional charges for water, boxed lunches, luggage, and booze are just the beginning.

Once passengers get used to these new “fees,” we can only expect to pay more. A lot more and probably for stuff we took for granted. Want a pillow? That will be $3. Maybe even $5 if you actually want a clean one. Blankets are the same deal. And if you actually want a cushion to sit on, that’ll be an extra $10 bucks, $20 if you want a seatbelt to go with it. 

Airline representatives will no doubt take issue with my observations and undoubtedly so will my fellow frequent fliers who expect to be “above it all.” Get over it guys. Try flying anywhere with your families in coach the way I do.

Gerald Kinder, a Florida Money Morning reader who has been keenly following this series – not to mention my family’s efforts to make each dollar count – shares my sentiment. And that’s why he sent me a video link to the classic comedy skit, “No Frills Flying,” featuring comedians Tim Conway and Harvey Korman.

The fact is that there are precious few alternatives to the airline’s new “fees” if you plan to keep flying.  But here are a few I’ve picked up in my wanderings that may be helpful:

• Baggage Charges: Obviously the simplest solution is the most elegant – carry it on. But pack lightly. Newer airframes and cabin designers are taking steps to make overhead bins and storage areas smaller. If you’ve got to check bags, try flying one of the few remaining airlines with free first bag policies. And be prepared to shell out $15 to $50 for a second suitcase.

• Drinking Water: Bring an empty nalgene water bottle and fill it at the drinking fountain after security. Many of the bottles come with clips you can easily attach it to your bag. If you can’t be bothered to carry anything else or simply don’t want to mess with it, there’s always bottled water in the terminals available for purchase. But those bottles are often even more expensive than the ones available on the plane.

• Frequent Flyer Charges: Sadly, airlines are busy reducing the value of accumulated miles faster than U.S. Federal Reserve Chairman Ben S. Bernanke can print money. This means that even seasoned frequent flyers like myself are not immune. Case in point: Many airlines are now charging booking fees of $100 or more simply to claim award-based fares. At the same time, they’re increasing the number of miles necessary to obtain free flights. There’s really not much to do here except spend the miles on merchandise, which doesn’t seem to depreciate in the rewards bank as fast. If you’re determined to “bank” the miles for travel, now’s a good time to concentrate your efforts on a single program to build up miles as consistently as possible.

Just because airlines are sticking it to us, doesn’t mean we can’t save a little money.

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald is on a mission to reduce his household energy consumption by 25% through conservation - without altering or compromising his family’s lifestyle.]

News and Related Story Links:

• Comedy Video Link:
  “No Frills Flying.”

• Money Morning Series:
  A Pledge to Hedge: Money Morning’s Fitz-Gerald Makes Public Promise to Slash Private Power Use (Part I).

• Money Morning Series:
  Saving $68 per Light Bulb and $100 on Water Immediately (Part II).

• Money Morning Series:
  Pledge to Hedge: A High-Tech Way to Boost Your Vehicle’s Gas Mileage (Part III).

• Money Morning Series:
  Pledge To Hedge: Staying Healthy in Today’s Whipsaw Markets (Part IV).

By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

Think about your money for a minute.

When it comes to success, “earning more” is only part of the picture. Studies show that what you save may actually be more important than what you earn.

And the best way to achieve those savings involves staying healthy.

Staying healthy? At this point you’re probably asking just what your health has to do with money and with the stock-and-bond markets. So let met clue you in.

Studies show that rough markets like those we’re experiencing now are stressful. And “bad” stress like this can be harmful to your health. Not only are there direct correlations between the ups and downs of whipsaw markets and such health problems as heart attacks, ulcers, and high blood pressure, there’s actually a growing body of evidence that suggests market-related stress may be the primary cause of such maladies.

Now, I’m not a medical professional, but I can certainly tell you that during my career as a professional trader I’ve seen the evidence of such correlations. I can’t tell you how many people I’ve seen over the years in the professional trading arena who literally dropped dead of heart attacks, or suffered seizures or some other catastrophic health event.

And a single health problem – if it’s serious enough – can literally wipe out a financial portfolio, eating away at all your money and negating a lifetime of saving. I’ve seen it happen more than once.

That means that “staying healthy” has lots to do with your money.

Let’s be honest: Everyone operates under the false belief that “it” can only happen to the “other guy” – and never to “me.” And while that may be true, why test the odds?

As for me, I’d rather hedge my bets. I’m not an “all-or-nothing” kind of guy. It’s not good for business, just as it’s not good for one’s health.

I’ll make some moves that will help me profit when the markets are bad, even if it means my upside is a little less than in a rampant bull market.

Just as I’d rather exercise a little bit each day – even if it means time away from my “black box” computer screens – in the belief that I’m heading off problems that still would’ve been years away.

Granted, as a competitive triathlete my definition of exercise is somewhat extreme. But it doesn’t even take that level of commitment to add years of pleasure to your life. Studies show that we can benefit physically and mentally from exercise until we are well into our late 80s or early 90s – even if we have never done it before. Which means it’s literally never too late to start.

I often joke with people that I’ve never been Spago or met Wolfgang Puck – but I know the guy who hoses down his sidewalks.

Here’s my personal five-point plan:

• Exercise First: Just as the old investing adage says to “pay yourself first,” the healthy equivalent is to “exercise first.” During any given year, my global travels can exceed 100,000 miles. No matter where I am or how tired I feel, I make it a priority to exercise at the start of each day. Not only does this help me manage the stress of traveling, it releases endorphins which are the body’s natural “feel-good” chemicals.
• Be Active Daily: Even if it’s just stretching and taking a quick walk, get into the habit of “being active” daily. For me, this commitment not only helps keep the fat off; it helps me maintain a crisp mental edge – critical on tight schedules and in complicated financial times.
• Make the Time, Don’t Take the Time: This is partly a question of attitude or perspective; you need to look at this as a positive, and not as some odious chore. No matter how busy I am, there’s always an extra 20 minutes available. But I’ve got to make it a priority, which is why I’ll frequently slip away for a quick workout before attending lunch or meeting subscribers for cocktails.
• Fly Into the Sun: No, this isn’t some ancient philosophical insight – it’s a modern travel trip. “Fly into the sun” – particularly on international trips where jet lag figures to be an issue. Doing so not only helps reset your body’s internal clock, but it can help you sleep well for the critical first few nights in a new time zone.
• Limit the Libations: Not only can too much alcohol upset your digestion, it can interfere with your ability to get a good night’s sleep, and can blunt your immune response (not a great idea when you’re heading into a region of the world you’ve never been before). Indulging too much can also leave you less than sharp.

The bottom line: Taking good care of yourself is just good business.

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald is on a mission to reduce his household energy consumption by 25% through conservation - without altering or compromising his family’s lifestyle. This is the fourth installment in this periodic series holds a special appeal for Fitz-Gerald: Despite a demanding travel schedule, he currently is training for April’s Ironman China competition – a grueling trek of 140.6 miles.]

News and Related Story Links:

• Money Morning A Pledge to Hedge:
  A Pledge to Hedge: Money Morning’s Fitz-Gerald Makes Public Promise to Slash Private Power Use (Part I).

• Money Morning A Pledge to Hedge:
  Saving $68 per Light Bulb and $100 on Water Immediately (Part II).

• Money Morning A Pledge to Hedge:

  Pledge to Hedge: A High-Tech Way to Boost Your Vehicle’s Gas Mileage (Part III).

• Beginnerstrathlete.com:
• Beginner’s Triathlete Training Site.
• About.com-Investing for Beginners:
• Pay Yourself First.
• Triathletesports.com:
• Triathlon Sports Information Site.
• Wikipedia: Endorphins.

I begin today with a startling number: 5.2.

That’s the percentage my gas mileage improved when I added Pulstar Pulse Spark Plugs to my 1991 Mazda Miata.

Made by the Albuquerque, N.M.-based Enerpulse Inc., Pulstar Plugs are the latest in a series of innovative new products that I’ve employed as part of my stated goal of cutting my family’s household energy and resources budget by 25%. These aren’t actual endorsements, but are instead anecdotes aimed at telling you what my family and I have done, and the products and technologies we’ve employed in our attempt to hit our goal.

My research told me that Pulstar Plugs represent a new technology that increases a car’s gas mileage, as well as its power and performance – all of which reduces greenhouse-gas emissions. In the context of my overall budget-reduction goal, a 5.2% increase in gas mileage doesn’t seem like a major attention grabber, but when you realize that it’s the equivalent of a few free gallons of gasoline every month, we’re all over it.

If you’ve never heard of Pulstar Plugs, or Enerpulse, it’s only because the company is just starting to really accelerate. According to the company, which was founded in 1996, the so-called “Pulsed Power Technology” (PPT) that’s central to the spark plugs was developed by Enerpulse with the assistance of the nearby Sandia National Laboratories.

Originally, the plugs were developed for the high-performance after-market. But as fuel prices moved higher, Enerpulse increasingly viewed them as a potential replacement for the 1.5 billion spark plugs sold each year, Chief Executive Officer Daniel Parker said in an interview last summer.

To help with its shift toward the consumer market, Enerpulse last July raised $5.5 million in second-round venture financing (the company has raised $8 million overall, according to published reports). By December, Pulstar Plugs – which previously had only been sold online by the company from its Web site – were being sold at retail through The Pep Boys (PBY) auto-parts chain. According to some reports, the company is now growing at a rate of 20% a month.

According to my research, what makes Pulstar plugs different from traditional spark plugs is the capacitor-based circuit mounted inside each plug. It captures the energy that’s normally wasted by traditional plugs and produces a spark that’s 10 times “brighter” and more efficient.

The net gain is a huge jump in the fuel that’s actually burned with each discharge – in two billionths of a second. Not only is the ignition process made more precise, but the higher energy pulse typically results in a cleaner, faster burn that translates into better fuel economy, more power, and lower emissions.

I noticed immediately that my car ran smoother and is faster when running through the gears, while my wife noticed that the garage didn’t smell as much when I first fired up the Miata’s motor.

In contrast to my simple anecdotal testing, Enerpulse has conducted very scientific, well-documented analysis on a variety of vehicles, with consistent results. And cars from Corvettes to Mercedes have shown improvements.

The company said it even made a Toyota Prius greener to the tune of 6% to 8% in additional miles per gallon.

I find that to be most impressive considering that the 2005 and 2007 “hybrids” Enerpulse tested already get more than 50 miles per gallon. So is the 5% increase in acceleration, particularly when you consider that hybrid owners typically give up performance in their quest for high mileage.

The other thing really worth noting here is that the three mile-per-gallon increase for each of the Prius models tested translates into 1,344 pounds of carbon dioxide greenhouse gas emissions that won’t foul the planet over the next four years (which is the projected life of a Pulstar plug).

At $24.95 per spark plug, Pulstar Plugs clearly aren’t cheap – that’s five to eight times the cost of a conventional plug, a ceramic-and-steel device that lacks any circuitry at all.

If you’re a longtime “Gearhead” like I am (Here’s a Money Morning secret…Executive Editor Bill Patalon is equally afflicted), there’s another benefit worth noting: At $8 per horsepower gained, Pulstar Plugs are one of the cheapest ways to increase horsepower, costing even less than such traditional “bolt-on” horsepower boosters as nitrous oxide, exhaust headers, or low-restriction exhaust systems.

Best of all, Pulstar Plugs are perfect replacements for factory plugs, meaning you should be able to install them easily in just a few minutes – without having to make any modifications to your car’s motor.

You can visit www.pulstar.com to learn more.

In closing, please allow me to thank you all for the many letters, e-mails, and comments we’ve received on this column. Please keep those comments coming. We’ve enjoyed learning about your personal conservation efforts and if our discoveries along the way seem to warrant it, we could end up publishing a guidebook of what we’ve learned along the way – including the best tips we’ve received.

[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald is on a mission to reduce his household energy consumption by 25% through conservation - without altering or compromising his family's lifestyle. This is the third installment in a periodic series in which he'll update us on his progress.]

News and Related Story Links:

• New Mexico Business Weekly:
  Enerpulse launches ‘pulse plugs’ in PepBoys’ L.A. stores.

• New Mexico Business Weekly:
  Spark plug maker lands $5.5 million investment.

• Money Morning A Pledge to Hedge:
  Saving $68 per Light Bulb and $100 on Water Immediately (Part II)

• Money Morning A Pledge to Hedge:
  A Pledge to Hedge: Money Morning’s Fitz-Gerald Makes Public Promise to Slash Private Power Use (Part I).

• Web Site:
  Toyota Prius Hybrid.

• Gearheadnews.com:
  Car News, events, clubs, happenings.

Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

Penny pinching is back in style.

We decided on a couple of quick, inexpensive fixes that balance our desire to use less and save more. The moves have had an immediate impact.

First, we installed compact fluorescent lights throughout our home. Just a few years ago, bulbs like these emitted a bluish-green hue that might’ve served as a homing beacon for Marvin the Martian – and were overpriced, to boot – but today’s models give off a pleasant glow, and aren’t all that expensive, given their long life.  Ours were $6.88 for a four pack at the local Château Depot [The Home Depot Inc. (HD)].

True, they’re not as cheap per bulb as incandescent lights, but they use less electricity per hour of use, and burn for a longer period of time. At a national average of 12 cents per kilowatt-hour, replacing a typical 75-watt incandescent bulb with an equivalent 18-watt compact fluorescent bulb works out to a staggering savings of $68 per bulb over the bulb’s 10,000-hour lifespan.

Ballpark, we figure our light-bulb-related power consumption just dropped a double-digit amount – though lacking a home version of the Consumer Reports testing lab we can’t give a precise estimate.

One thing we’ve noticed, though, is that there seems to be a good deal of variation in quality. We had two bulbs burn out almost immediately after installation. Home Depot replaced both without hesitation.

After replacing the bulbs, we checked all of our plumbing for leaks. Believe it or not, even a small drip can result in hundreds, or even thousands, of gallons of wasted water per year – leading to a water bill that’s much higher than necessary.

That may not surprise you, but it sure surprised us when we learned that approximately 40% of all the water used by U.S. homes is actually wasted.

We didn’t have any leaking pipes, but we can’t say the same for the toilet bowl, judging from the food coloring, which appeared in the bowl 10 minutes after we dropped it in the tank. A quick check with the Beaverton Water Department revealed that this could cost an extra $100 a year or more if the leak gets worse.

To deal with the problem, we bought three Whisper Fill Valve and Flapper kits at $9.96 a package, and installed them ourselves. Not only are these things quiet as the name implies, but they completely shut down incoming water when the commode isn’t being used.

By doing this, we also eliminate the possibility of future leaks – which is really important with our two boys and their friends constantly in the house.

Every watt and every gallon counts.

Next up, trimming 66,572 gallons for $85…

[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald is on a mission to reduce his personal energy consumption by 25% through conservation - without altering or compromising his family's lifestyle. This is the second installment in a periodic series in which he'll update us on his progress.]

By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

As much as I poke fun at my home state of Oregon (with its decidedly liberal tendencies), it’s a phenomenal place to live.

Not only are the people spectacular, so is their attitude.

There’s a real “make-a-difference” philosophy at work out here that manifests itself in everything from our laws to our personal behavior. This philosophy fosters a “can-do” attitude that makes us believe that we can do almost anything – and that includes fighting back against the super-high energy prices that U.S. consumers are struggling with right now.

That’s why my wife and I are really excited to take on a personal challenge, of sorts.

Over the next 12 months, we’re going to try to shave 25% off our total energy and resources bills. This means that we’re going to make our house more efficient – and do the same with our cars.

But here’s the catch.

We’re going to try and achieve this goal with existing technology and, hopefully, without breaking the bank. That’s not because we aren’t seeking the maximum possible savings (we are); instead it’s because we believe we can do better with what we have, and through conservation.

Besides, we want to set an example – and create an energy-saving road map – that anyone can follow. We want to demonstrate that you don’t have to spend big bucks to buy the latest gadgets or invest in “bleeding-edge” conservation technologies. Common sense and careful, shrewd energy management can generate major savings in both expenses, and in energy.

This is something that our federal government just doesn’t seem to understand.

Not only did our federal government sponsor a trillion-dollar energy “pork fest” – with incentives to find, mine, drill or tap into more energy – it also mandated all sorts of things along the way. These initiatives are certain to encourage Big Business. But I believe the government would have seen much better results had simply encouraged both consumers and corporations alike to focus on energy conservation.

Story continues below…

Sign up right now, and we’ll send you an important new report for free: “The Three Best Investments in Asia.”

It gets worse. Now the government has an agriculture bill headed down the pipeline; the legislation looks promising, but by the time it gets through Congress it figures to have gotten so watered down that it will be virtually worthless.

Don’t get me wrong: I’m all for developing new, more efficient technology. Indeed, it’s necessary. But it’s also a long-term process, and one that’s very costly.

We should pursue that path, of course. But there’s another strategy that we should pursue in the meantime – conservation.

So it’s time to do our part.

Over the next 12 months, I’ll report on my family’s progress, the decisions we’re making and the technologies we’re using (as I said, we support technology-driven energy savings). And we’d like to hear about your efforts, too – assuming you, too, are interested in saving money and conservation like we are.

Hopefully, we’ll find methods and materials that we can all use. We’ll definitely let you know.

[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald will report back periodically on his domestic-energy conservation efforts.]