America has been outclassed, and by an unlikely competitor.

In the realm of alternative energy, there is an inconspicuous European nation that could stand to teach the U.S. a few lessons — Denmark.

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Besides being home to the world's happiest people, according to a study this year by a social psychologist at England's University of Leicester, this small country, badly battered by oil shocks in decades past, has become a leader in the field of renewable energy.

Alternatives Born From Crisis

Following the 1973 Yom Kippur War between Israel and Syria and Egypt, most of the Western world was subjected to an Arab-led oil embargo. The crisis forced Denmark, which was 99-percent dependent on foreign oil at the time, to develop an alternative-energy policy.

As a nation with few energy resources of its own, Denmark had to consider its needs and rethink its policies in the face of an almost complete withdrawal of its oil supply.

In the 30 years since, Denmark has worked tirelessly to develop new technology and new policies.

The result is that today, renewable sources account for a greater share of the nation's energy consumption with each passing year, according to the Energistyrelsen, the Danish Energy Authority.

Twenty percent of Denmark's energy needs are now met by electricity generated by wind turbines, and the proportion is steadily increasing. Thanks to advances in technology and turbine design, the cost of wind power has been reduced by 75 percent since 1970, when the programs began.

Wind-power technology has also been a driving force in the Danish economy, according to Chuck Kleekamp, president of Clean Power Now , an American nonprofit organization that informs citizens about renewable energy projects and studies Danish energy programs.

"Danish companies manufacture 40 percent of the world's supply of wind turbines, as well as having had extensive research programs for decades," Kleekamp said. "The technology also provides employment for a segment of the population in Denmark."

But wind power is not the only renewable resource Denmark has explored.

Other Danish alternative-energy sources include the burning of waste products, or biomass, in combined heat and power plants; electricity generated by photovoltaic, or solar-energy, cells; and geothermal turbines powered by the escape of underground steam.

Alternative-energy technologies, as well as conservation habits, have become normal parts of life for the average Dane. High gasoline prices and heavily taxed vehicles result in fewer people driving than in the United States.

Most households have only one car, and at least one spouse typically uses the extensive Danish public transportation system for commuting, said William E. Griswold, a member of Clean Power Now, whose wife, Dorte, is Danish.

A Willingness to Adapt

While Denmark's transportation needs are far simpler than those of a sprawling country like the United States, part of the European nation's success is due to its citizens' willingness to adapt to alternative means of transportation and wean themselves from excessive automobile use.

The Danish attitude toward energy conservation means "people don't have as many appliances, or gizmos," said Griswold, a frequent visitor to Denmark. "Also, there are stringent requirements for insulation when building new homes. Every individual mandate like that means the nation uses less energy."

The average Danish household consumes only 350 kilowatt-hours of electricity usage per month, whereas American homes average between 600-kwh and 1,000-kwh a month.

The result is that Denmark has the lowest energy consumption per unit of gross domestic product in the European Union, as well as the highest proportion of electricity generated by renewable sources and the world's most efficient clean-coal technology.

A major part of that success is the Danish commitment to and attitude toward its energy policies, Griswold said.

"After the [1973-74 oil] embargo, Denmark had the attitude that they were going to become less dependent on the outside world and more self-sufficient," he said. "And upon making this commitment, they've gained benefits, including lower national debt, cleaner air and less dependency on other countries."

Following the embargo, Denmark developed a broad-based strategy to reduce its dependence on fossil fuels.

It increased taxes on natural gas and petroleum to reduce consumption, and embarked on major research projects to develop new sources of energy, according to the Danish Embassy in Washington.

Denmark has become both wealthy and environmentally conscious while barely increasing its own energy usage. Still, oil and gas resources remain a key element of the country's energy portfolio.

Petroleum's Price

The production of oil and gas from the nation's 19 oil fields in the North Sea — which began full production only after the oil embargo — has led to the creation of jobs, successful Danish companies and higher tax revenues for the country, said Jonathan Coony, former spokesman for the International Energy Agency, a pan-governmental organization based in Paris.

"As oil and gas resources become more concentrated in mostly non-EU [European Union] countries, the Danish resources will become increasingly important as a way to enhance security of [the] energy supply," Coony said. "This is true not only for Denmark itself but also for the EU as a whole."

The state-owned North Sea oil fields are the primary suppliers of petroleum for Denmark, but other sources are continually being explored, according to the Danish Energy Authority's 2005 policy statement.

"Because we have an open market, companies within Denmark import and export oil," said Ture Falbe-Hansen, chief adviser of communications for the Danish Energy Authority. "They sell the oil products on the stock market. Some of the crude oil will be handled and sent to refineries in Denmark, of which we have two, and some will be sold abroad."

According to the DEA's annual report, 10 different companies received and sold oil from the Danish fields in 2005.

"This is quite normal, and the important thing to look at is the net of import and export, and in Denmark we have a net export," Hansen said.

Denmark imported approximately 69,000 barrels, and exported approximately 263,000 barrels, of crude oil per day in 2003, the latest figures available, according to the International Energy Agency — a net export of about 194,000 barrels per day.

But unless substantial new fields are discovered, the North Sea oil supply, at current rates of depletion, is expected to run out within 20 years.

"It has been assessed that there still remain a large number of exploration opportunities in the Danish sector [of the North Sea], and that new technology holds the potential for exploiting finds even more than at present," the DEA said.

The use of these new technologies offers the potential for additional cost reductions within the nation's energy sector.

A recently released in-depth review of Danish energy policies by the International Energy Agency finds that although the costs of renewable energy resources have decreased dramatically over the past 30 years, even more efficiencies can be found.

"The Danes have been able to integrate a high level of renewables into their electricity system with no major technical difficulties. The downside has been the cost," Coony said. "We estimate that subsidies to renewable plants increase retail electricity costs to households by 3 percent and costs to business and industry by 9 percent."

In its report, the IEA said that Denmark could achieve more cost-effective results by focusing on further gains in energy efficiency, rather than on expanding its portfolio of renewables.

Hassle-Free Energy Independence

But has the stalwart commitment of the nation to energy independence impeded on the life of the average Dane?

Griswold argued that it hasn't.

"Danes would say, 'Thank goodness we have a government that plans so well that we are only minimally impacted.'" he said. "The average Dane isn't terribly conscious of being in an energy-saving environment because it's so natural to [him or her]."

The IEA shares in the broad consensus regarding the success of Danish energy efforts.

"It is Denmark's pioneering role in renewable energy and energy efficiency that allows it to provide particularly valuable lessons for other countries," it said in its review.

Denmark's long-term commitment and dedication to research and development, the success of its energy policies and its unique social and cultural environment prompt other nations to learn from Denmark's example.

"The people of Denmark are very aware of the need to ensure sustainability for future generations," Kleekamp said. "Thanks to their attitude on renewable energy and sustainability, Denmark has managed to attain total energy independence, an incredibly important achievement."