The Most Energy Efficient Economies in the U.S.
Thursday, March 24th, 2022
As the global economy continues to expand, the need for energy to sustain that growth is increasing as well.
People and businesses depend on energy for every aspect of life, from heating and cooling homes and workplaces to fueling transportation to powering appliances and other conveniences of modern life. As demand increases, energy producers must find ways to keep up, either by increasing production or by producing more energy from existing inputs.
Energy efficiency creates a number of benefits for the economy overall. Consumers and businesses that rely on energy benefit from lower prices because it is easier to meet demand with lower levels of energy production. Utilities and other energy producers can save on the cost of energy production and transmission infrastructure with more efficient generation. And more efficient energy use also has environmental advantages: efficient energy production releases lower levels of greenhouse gas and other pollutants, along with requiring less water use.
With greater needs and these benefits in mind, businesses and governments have developed more tools to promote energy efficiency in recent decades. Utilities have developed more efficient technologies for generating energy and moved away from less efficient fuel sources. Many states and localities have adopted policies like Energy Efficiency Resource Standards or more stringent building codes to ensure continued improvements in energy efficiency. Programs like the LEED (Leadership in Energy and Environmental Design) certification for buildings and the government’s ENERGY STAR certification for consumer appliances have helped raise standards of energy efficiency for many aspects of everyday life.
But one of the biggest factors improving energy efficiency is a shift in the nature of the U.S. economy. Historically, the U.S. generated a far greater share of its economic output from energy-intensive industries like manufacturing. Over time, more of the economy has shifted toward services and technology, which require far less energy input, and the energy intensity of the economy has declined over time. According to the U.S. Energy Information Administration, the amount of energy consumption relative to GDP has decreased by 58% since 1950.
The result of these collective shifts has contributed to improved efficiency across the U.S. economy. From 1980 into the mid-2000s, the growth in energy consumption mostly tracked population growth: as the U.S. added more people, it also consumed more energy. Since then, however, energy consumption has begun to decline, while population and GDP have continued to grow.The U.S. also has room to continue improving in the efficiency of its energy production, thanks to an increasingly diverse—and more efficient—mix of energy sources. Fossil fuels including natural gas (34 quadrillion BTU), crude oil (23.6), and coal (10.7) constitute a sizable majority of U.S. energy production. However, energy production from fossil fuels has moved away from highly inefficient coal and toward more efficient natural gas in recent years, and other alternatives, including renewables like wind, have become a much more significant portion of the U.S. mix.
|