Saturday, May 03, 2008

The Energy Efficient Economy Can Handle $112 Oil

Compared to the early 1970s, the U.S. economy is now twice as energy efficient, requiring only about 1/2 of the energy consumption per dollar of real GDP in 2007 (8.78 BTUs per dollar of real GDP) as in 1973 (17.44 BTUs per dollar of real GDP), according to data just released by the Energy Information Administration.

Bottom Line: The energy-efficient economy of today is much better able to absorb higher energy prices than in the past. Although high oil prices crippled the economy in the 1970s and early 1980s, and contributed to three serious recessions between 1973-1982, the energy-efficient Goldilocks Economy of the 21st Century just keeps humming along, recession-free.


At 5/03/2008 10:53 AM, Anonymous Anonymous said...

"...the energy-efficient Goldilocks Economy of the 21st Century just keeps humming along, recession-free."


At 5/03/2008 12:53 PM, Anonymous Anonymous said...

while overall energy efficiency may be up, I believe that emitted CO2 per GDP dollar has not changed much in the last 10 years, implying that efficiency has gone up mainly in electrical power, and the US uses very little oil for electricity.

At 5/03/2008 7:55 PM, Blogger OBloodyHell said...

> the US uses very little oil for electricity.

...and if the Greens actually gave a rat's ass about CO2 we'd long since have replaced that 80% of electricity production with standardized nukes.

The goal of the Greens is to cripple the economy, not to resolve their imagined-up problem with CO2.

Considering that destroying the economies of the US and Europe would not have one whit of effect on the CO2 produced by the emerging economies of India and China (each larger, by itself, than the USA+Europe+Japan combined, in population, and thus, eventual energy usage and CO2 production), their agenda is quite clear: CO2 is a ruse, not a cause.

At 5/03/2008 7:57 PM, Blogger OBloodyHell said...

... BTW, somehow the sentence got elided during editing:

Coal is the current source of 80% of our power. There was a moderate amount of oil used during the 70s for power production, which is no longer the case

At 5/04/2008 5:33 PM, Anonymous Anonymous said...

Can I go to the gas station and ask for a lower price because my car is more efficient?

I think the energy efficiency ratio is meaningless. The reason of the 1970s and 1980s crisis was the production quotas of the OPEC. At this time OPEC has said they will increase production if necessary. This is not an OPEC caused crisis. The reason for high energy prices is much higher demand than in 1970s and this will eventually cause inflation to rise by next year and rates to move up dramatically. Economy will go into recession by third quarter 2008 as sector rotation indicates.

At 5/04/2008 5:48 PM, Anonymous Anonymous said...

At this time OPEC has said they will increase production if necessary.

Anonymous, this is dead wrong and can be verified in about 5 - 10 seconds if you don't mind googling "opec refuses to increase supply". OPEC has in fact refused to increase supply. Did you just make your assertion up? Oil prices are being driven higher due to the declining dollar, regional instabilities, as well as market forces. Keep moving those recession prediction goalposts. Is it next quarter now?

At 5/08/2008 11:56 AM, Anonymous Anonymous said...

i believe this graph is misleading. Isn't the decline in energy usage/$ of GDP influenced as much by the export of the US manufacturing sector and the US's growing focus on service-type GDP. What thoughts do you have?


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