Monday, May 03, 2010

2009: Most Energy-Efficient Economy in History

The EIA released new energy data last Friday showing that the U.S. had the most energy-efficient economy in history last year, based on the amount of energy consumed to produce each real dollar of Gross Domestic Product (GDP). In 2009, it required only 7,290 BTUs of energy (petroleum, natural gas and other energy) to produce each real dollar of GDP, an all-time record low, and less than half the energy required in the mid-1970s to produce a dollar of output (see chart top above).

In other words, the U.S. economy is twice as energy-efficient today compared to the 1970s due to technology, innovation and improvements that allow us to produce more output with less energy. We did save some energy in 2009 because output (GDP) fell by 2.44 percent due to the recession, but energy consumption fell by about twice as much (4.81 percent) last year, which lowered energy consumption per dollar of real GDP for the 18th consecutive year to an all-time historical record low.

Amazingly, the EIA report also showed that total U.S. energy consumption in 2009 (94.66 quadrillion BTUs) was less than the total energy consumed 12 years ago in 1997 (94.76 quadrillion BTUs), even though we produced almost 32 percent more output last year than in 1997, the U.S. population has increased by 34.5 million people in the last 12 years, and traffic volume (miles driven) was 17.5 percent higher last year than in 1997 (see bottom chart above)!

The new EIA data showing that we’re living in the most energy-efficient economy in history probably won’t get much media attention (especially compared to an event like Earth Day or the Gulf oil spill), even though it’s an ongoing and remarkable story of environmentally-friendly, green achievement. As American Enterprise Institute fellow Steven F. Hayward
commented in 2008, “The consistent improvement in America's energy efficiency is an untold and underappreciated long-term story.”

With all of the media coverage of the oil spill in the Gulf dominating energy news, don't expect any reports on 2009 setting a new record for the most energy-efficient economy in history.

Cross-posted at
The Enterprise Blog.


At 5/03/2010 2:03 PM, Anonymous morganovich said...

has anyone ever seen this data by product?

i'm wondering if this shift has more to do with a production/consumption shift toward more services/healthcare/etc and shifting energy intensive industries offshore or due to efficiency gains within industries.

does a car made today use less energy than one made 20 years ago?

At 5/03/2010 2:35 PM, Blogger Benjamin Cole said...

This chart is remarkable, especially considering that the USA has not taxed energy use, certainly compared to Europe.

When we do, or if energy prices start to rise, look for an even steeper second leg to this chart.

At 5/03/2010 5:15 PM, Blogger Milton Recht said...

To morganovich:

The shift from a manufacturing to a service-based economy accounts for about half of US energy productivity, with the other half attributable to energy efficiency (Kissock, K., 1989, “The Effect of Population, Economy and Energy Use on Sulfur Emissions in the United States Since 1900”, Washington University, St. Louis, Missouri).

At 5/03/2010 6:01 PM, Blogger juandos said...

Not to worry folks, our energy needs will drop dramatically if this nonsense flies...

At 5/03/2010 8:27 PM, Anonymous Anonymous said...

Germans are more energy intensive (btu/real GDP) than Americans.

"Germany 2009: 27% More Energy-Efficient Economy than the U.S." might as well been the blog post title.

At 5/04/2010 2:54 AM, Blogger PeakTrader said...

It's remarkable, the U.S. not only leads the world in the Information and Biotech revolutions, it leads the rest of the world combined (in both revenues and profits).

The U.S. offshored heavy goods, higher cost goods, and goods with declining prices, imported those goods at lower prices and at higher profits, and shifted the freed-up limited resources into more profitable goods (e.g. in emerging industries and higher quality "core" goods in older industries).

Consequently, U.S. production became lighter (high tech goods weigh little), while U.S. consumption became heavier (Americans live in bigger houses, drive bigger autos, etc).

Globalization, e.g. open markets, free trade, and unrestricted capital flows, is one factor why the U.S. has the highest standard of living in the world.

At 5/04/2010 4:33 AM, Blogger Ron H. said...


You said:

>"Globalization, e.g. open markets, free trade, and unrestricted capital flows, is one factor why the U.S. has the highest standard of living in the world."

Now THIS is my kind of talk, but, haven't you complained in the past about trade imbalances with China & china's currency manipulation?

Am I misremembering your previous comments?

At 5/04/2010 6:59 PM, Blogger KO said...

@ Anonymous 5/03/2010 8:27 PM

If we had the same energy policy as Germany with high energy taxes and mandated renewable energy, we'd probably get as efficient.

We'd also probably have a much smaller GDP per capita just like they do, as the more energy intensive activities were reduced.

Some of the other more efficient countries (at least in 2006):
Cayman Islands

Other advanced countries like Switzerland and Japan were also more efficient than the US. Most have a lower per capita GDP.

Only Luxembourg seems to have both a higher per capita GDP, and lower BTUs per dollar of GDP. Switzerland is pretty good with a little less GDP and also less BTU/GDP dollar.

Table E.1g here for the BTU/GDP $:

Canada came in at 13,097 BTU/GDP dollar for 2007. Yikes.

At 5/05/2010 10:51 AM, Anonymous Wonz said...

Actually, I think the most energy efficient country for 2009 and for most of the last half century has got to be China. Just think of all the people not in existence because of their one child policy. Let's not forget what is unseen.

At 5/05/2010 2:25 PM, Anonymous Anonymous said...

Now if we just stop subsidizing fossil fuels so much as Republicans want, we can keep improving even further. Some studies say we can improve on energy efficiency another 50% (cut our energy input per unit of GDP in half.) Think about how competitive that will make us. See you're a closet enviro afterall...

At 5/05/2010 9:44 PM, Anonymous grant said...

GOOGLE just bought 2 wind farms to provide electric power for it's energy needs. As a point of interest it uses the total output of 100mw power station daily.
So service industry still accounts for large electricity users.Micro economic research needed here to determine the actual situation.


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