Energy use in the United States

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Traditional energy resources, namely, coal, natural gas and petroleum, have dominated energy consumption in the United States for over the last century. The U.S. Energy Information Administration (EIA) predicts that fossil fuels will continue to dominate, making up three-quarters of energy consumption by 2040. Since the environmental movement began making policy advances in the 1970s, however, there has been increased attention on the environmental and health impacts of fossil fuels. These impacts are increasingly shifting public opinion towards an energy economy that relies more heavily on renewable energy. The energy policy landscape today is shaped by the tradeoffs among several factors, including: energy prices, the provision of affordable and consistent energy, and limiting pollution and protecting the environment.


Energy use in the United States, and the policies that shape that use, depend on many circumstances, such as geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as the federal government, state and local governments, utilities, and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the United States. How energy is produced and consumed also has an impact on the environment and pollution. Because the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure. Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How the United States attempts to balance these two shifts over time, and in the political arena the conversation often boils down to energy costs versus the environment.

Lights at night across the United States

There are six main policy areas that are currently guiding the national dialogue over energy policy:

  • Increasing energy efficiency to decrease energy consumption
  • Increasing the supply of domestic fossil fuels; much of this conversation has focused on the
    impact of horizontal drilling and fracking on oil and natural gas production.
  • The price of oil and gasoline and the effects of these prices on consumers and producers.
  • The potential for exporting natural gas because of the huge increase in production.
  • The effect of coal-fired power plants on greenhouse gas emissions, namely, carbon dioxide.
  • The push to switch from traditional energy resources to renewable energy resources to limit the impact on the environment.[1][2][3][4]
For more information on how policy impacts energy production and consumption see Energy policy in the United States.



Energy use in the United States

The chart below shows energy consumption, production, imports and exports from 1949 through 2013 in the United States in quadrillion BTU. Since the mid-1950s, the United States has consumed more energy than it has produced, although recently that gap has begun to narrow. Energy imports have been decreasing since around 2009. Mirroring this is an increase in energy exports, the most dramatic growth the United States has seen since 1949.[5]

Energy consumption, production, imports and exports in the United States, 1949-2013

History

The first documented use of coal in the United States occurred in the Southwest in the 1300s when Hopi American Indians used coal for cooking and pottery making.[6] Wood was the main source of energy for early Europeans settlers, and as technology advanced water mills were also used to power the early period industrialization. Coal was the main source of energy at the end of the 19th century, but it was quickly surpassed by petroleum. By the middle of the 20th century, coal was increasingly used to fuel power plants. Around the same time, nuclear power emerged. Petroleum and natural gas use increased in the 1970s and has been fairly cyclical ever since. The graph to the right shows these historical energy consumption patterns.[7]

U.S. energy consumption, by source, 1775-2010

Available energy resources

The U.S. Energy Information Administration (EIA) predicts that by 2040 the United States will be relying more heavily on natural gas than coal to produce electricity. Wind and solar power are expected to account for 16 percent of electricity generation, although without significant technological advances renewable technologies will have a hard time replacing the energy generated by coal and nuclear power plants that are expected to be retired by 2040.[8][9]

Traditional energy resources

Oil pumps in California

As of 2012 the United States had 11,884 million barrels of proven crude oil reserves and 110,351 billion cubic feet of natural gas reserves.[10][11][12][13]

The EIA has predicted that in 2035 natural gas will surpass coal as the largest source of energy used to generate electricity; for example, 16 percent of coal-generated electrical capacity is expected to be retired by 2020. If natural gas continues to compete with nuclear and coal electricity generation on price, the EIA anticipates that natural gas facilities will fill the void that will be left as older coal and nuclear energy power generation facilities are retired. The increased use of natural gas is not predicted to keep energy prices from rising, however, because as demand increases, so will prices. According to the EIA natural gas prices are expected to rise from about $3.50 per thousand cubic foot to just over $8 per thousand cubic foot by 2040.[14] Electricity prices are expected to rise from 9.8 cents per kilowatt hour to at least 11.1 cents per kilowatt hour, and even as high as 12.5 cents per kilowatt hour, as coal and nuclear energy consumption decreases.[15]

The EIA further predicts that the recent surge in oil production will slow beginning in 2021, but that assumes no further technological improvements occur and revolutionize the industry, as horizontal drilling and fracking did.[8]

The chart below compares proven fossil fuel reserves in the United States to 17 other countries with the highest valued reserves, as calculated by Business Insider. The United States has the 11th highest proven oil reserves; the fifth highest proven natural gas reserves; the world's largest coal reserves; and the fifth highest valued energy reserves, totaling $28.5 trillion dollars.[16]

Note: Click on a column heading to sort the data.

Renewable energy resources

Glen Canyon Dam

Renewable energy generation is predicted to grow faster than coal and natural gas energy generation from 2012 to 2040. Wind energy capacity is predicted by the EIA to grow by 9 percent in 2014, while utility-scale solar capacity will increase by 56 percent form 2013 to 2015, with much of this activity concentrated in California.[17] Because, however, renewables account for such a small portion of the nation's current energy portfolio, renewables will only make up 16 percent of electricity generation by 2040, despite the growth predicted by the EIA. This means that renewables will be providing much less of the nation's energy supply than the 35 percent predicted for natural gas and the 32 percent predicted for coal.

Renewable energy is more costly to develop than traditional energy resources, but public concern over carbon and other greenhouse gas emissions has put pressure on federal, state and local governments to create financial incentives and mandates that are intended to increase the production of these types of energies. These incentives and mandates include rebates, tax incentives and credits, grants, net metering and renewable energy mandates such as renewable portfolio standards (RPS). Importantly for renewable energy, the federal production tax credit (PTC) that was created by the Energy Policy Act of 1992 expired in 2013 and hadn't been renewed by the time the EIA made the above predictions.[18][17]

The chart below compares renewable energy capacity in the United States to the other top four countries in terms of renewable energy capacity. The data for this report was compiled by REN21, a network connecting governments and non-government organizations together to promote renewable energy.[19] It is important to consider that total renewable energy capacity doesn't necessary translate into production. Some renewable energies, such as wind and solar, are intermitted, meaning that capacity doesn't always equal the amount of power generated. Additionally some countries, such as China, have faced challenges in connecting wind turbines to the electricity grid and thus wind capacity doesn't translate directly into wind-generated power for consumers.

Globally, the United States is second in the world in renewable electric power capacity, with China coming in at first. The United States is first in biofuels; first in geothermal; second in hydropower; fourth in solar; and second in wind.[20]

Note: Click on a column heading to sort the data.

Consumption and prices

The EIA predicts that in 2014 the United States will consume 8.846 quadrillion BTUs of renewable energy. The graph below to the left shows energy consumption by energy type in the United States from 1949 to 2013 in quadrillion BTU. Petroleum and coal consumption have been decreasing since 2007 and 2009 respectively. This decrease has been mostly made up by an increase in the consumption of natural gas, corresponding with lower natural gas prices due to the increase in natural gas production because of technological advances in fracking and horizontal drilling. In 2010, renewable energy consumption surpassed nuclear electric power consumption and has continued to rise.[5]

The graph to the right shows the cost of fuels to end users in real (1982-1984) dollars. The cost of residential electricity has generally been decreasing since 1984. Since 2002 the cost of almost all the fuels shown has risen on average. Motor gasoline and residential heating oil saw the sharpest increases, although the prices of both fell sharply in 2008 going into the recession, only to rebound a year later. After which, gasoline prices rose to their highest level since 1960, when the EIA began tracking this data.[5] The EIA expects motor gasoline consumption to decrease between 2014 and 2040 because of increases in fuel efficiency standards and increased competition from electric, biofuel and diesel vehicles.[8]

Energy consumption by source in the United States, 1949-2013
Energy cost in real dollars (1982-1984) the United States, 1960-2013

Consumption by sector

Energy consumption by sector in the U.S. from 1949 through 2013

The graph to the right shows energy consumption by sector in the United States from 1949 through 2013. Energy consumption for all sectors has generally risen over this period. The most volatility has occurred in the industrial sector. Across this time period the industrial sector (green) has consumed the most energy, while the commercial sector (brown) has consumed the least. Transportation (yellow) has been the second largest consumer, followed by residential (blue).[21]

Carbon dioxide emissions

Energy-related CO2 emissions

Although the EIA expects to see carbon emissions increase slightly--2 percent--from 2012 to 2013, carbon emissions are still 10 percent lower than they were in 2005. According to the EIA the drivers of this decrease are:

  • weak economic growth due to the recession;
  • energy-efficiency improvements;
  • increase in the supply of natural gas due in part to fracking; and
  • coal, which has been displaced by natural gas to fuel the power sector.

The Obama Administration has set a goal of reducing carbon emissions by 17 percent by 2020. This goal could be helped by the EIA's prediction that even though electricity generation is expected to increase by 25 percent from 2012 to 2040, emissions from electricity generation is expected to decrease by 11 percent.[8][22]

The EIA further predicts that from 2014 to 2040 CO2 emissions will remain below 2005 emission levels. The EIA predicts that industrial sector emissions will surpass transportation sector emissions in 2024 as pollution from the transportation sector decreases because of biofuel mandates, fuel economy standards and shifting consumer behavior. Electrical power emissions are also expected to decrease, with coal combustion emissions remaining below 2011 levels through 2040. As natural gas-fired power plants replace coal-fired power plants, under the EIA's predictions, the average emission rate per kilowatthour will also decrease.[8]

Energy imports and exports

Energy imports and exports in the United States, 1949-2013

The following two charts show energy imports (top) and exports (bottom) in the United States from 1949 through 2013 in quadrillion BTU. The green line labeled "Other" includes coal coke, coal, biofuels and electricity. Petroleum is the most imported fuel, with imports tending upward from 1987 until around 2005, when imports began to decline.[5]

Since 1949 the United States has been exporting both coal, petroleum and small amounts of natural gas. Petroleum exports have generally increased since 1949, but they saw a steep increase beginning around 2005. The United States has also exported relatively small amounts of natural gas and other sources, which the EIA defines as coal coke, coal, biofuels and electricity.[5]



Production and transmission

Production

Energy production in the United States, 1949-2013

The chart to the left shows energy production by type, in the United States from 1949 to 2013, in quadrillion BTU. Across that same period natural gas had the steepest increase from 1950 through the early 1970s, when production more than quadrupled. Crude oil and natural gas plant liquids had generally been decreasing from the mid-1980s through 2008, after which production quickly rose. Coal production peaked in 2008, reaching 23.851 quadrillion BTU. Renewable energy production surpassed nuclear energy production in 2011.[5]




Transmission

As of 2002, according to the most recent DOE transmission study, over 150,000 miles of transmission lines linked electricity providers across the United States, even reaching into Canada and Mexico. The U.S. Department of Energy (DOE) has likened the transmission system in the United States to an "interstate highway system for wholesale electricity commerce."[23]

Electricity transmission systems in North America

As the graphic to the left shows there are three electricity transmission systems in North America, the Western Interconnection, ERCOT Interconnection and Eastern Interconnection. There are 10 regional councils that managed the 140 local control areas within this network. Just as bottlenecks and congestion on highways have costs, so do bottlenecks and congestion with electricity transmission. In a 2002 study the DOE found bottlenecks and congestion across 50 of 186 transmission paths in the Eastern Interconnection block. In the Western Interconnection block the DOE identified 37 points of congestion out of 106 transmission paths. The DOE did not identify congestion in the ERCOT Interconnection block. In California one path alone was estimated to have cost $222 million during a 16 month period ending in December 2000.[23] The cost of transmitting electricity costs less than 10 percent of the final cost of electricity.[23] The EIA estimates that 6 percent of all electricity transmitted in the U.S. is lost each year during transmission.[24]

The electricity transmission system in the United States has been built over the last 100 years as interconnections were built between local electric providers. There has always been a debate over who should provide services like: electricity transmission grids, the private market, the government, or some combination of the two. During the 1970s only public utilities, which are often government monopolies or regulated by a governmental public utility commissions, were allowed access to the electricity grid. The calls to further increase government regulation of the transmission grid increased in the 1970s as proponents argued that providing affordable, consistent power was too important a task to be left to the market. These calls were not answered, however, and in 1996 new rules were created that shifted the grid to a more market-oriented system. This system, known as wholesale electricity markets, allows more competition between electricity providers, because non-public utilities can now access the transmission grid. According to the DOE, this shift has benefited consumers, because electricity can now more easily be transmitted to where it most demanded, keeping prices from rising quickly when demand spikes. This new system has caused problems, however, because it has strained the transmission infrastructure, which wasn't built to accommodate such a large and diverse group of utilities. The United States is facing widespread, necessary infrastructure improvements, including electricity infrastructure, that the DOE has warned could seriously threaten the economy. While there have been large investments in energy production facilities, this investments have not been matched in the energy transmission system.[23][25]

West Wide Energy Corridors

One of the problems identified by the DOE that slows needed transmission infrastructure improvements and growth is the nexus of federal, state and local energy siting regulations. These regulations require significant effort, time and money for those looking to build transmission infrastructure that increasingly crosses multiple county, city and state lines, and federal lands. In the western United States the 2005 Energy Policy Act created West Wide Energy Corridors. These corridors, operated by five federal agencies on federal lands, are supposed to more easily allow the siting of oil, natural gas and hydrogen pipelines, and electricity transmission facilities.[23][26]

See also

External links

References

  1. Reuters, "UPDATE 2-U.S. Senate Republicans block energy bill, forfeit Keystone vote," May 12, 2014
  2. The Baltimore Sun, "Gas export facility clear hurdle," May 15, 2014
  3. Congressional Research Service, "Energy Policy:Historical Overview, Conceptual Framework, and Continuing Issues," December 21, 2004
  4. Governing, "EPA Carbon Emissions Reduction Targets by State," accessed June 11, 2014
  5. 5.0 5.1 5.2 5.3 5.4 5.5 U.S. Energy Information Administration, "Energy Overview," May 2014
  6. U.S. Department of Energy, "A Brief History of Coal Use," February 12, 2013
  7. U.S. Energy Information Administration, "Energy sources have changed throughout the history of the United States," July 3, 2013
  8. 8.0 8.1 8.2 8.3 8.4 U.S. Energy Information Administration, "Annual Energy Outlook 2014 with projections to 2040," April 2014
  9. The EIA predictions used on this page refer to the EIA's AEO2014 Reference case. This Reference case assumes the current laws and regulations that govern national energy policy remain the same. For the other cases, including low and high economic growth, and low and high oil prices see their report: [1].
  10. U.S. Energy information Administration, "Petroleum & Other Liquids," accessed April 10, 2014
  11. Six thousand feet of gas equals about one barrel of oil, which equals about 19 gallons of gasoline.
  12. U.S. Geological Survey, "World level summary of petroleum estimates for undiscovered conventional petroleum and reserve growth for oil, gas, and natural gas liquids (NGL).," 2000, accessed April 23, 2014
  13. U.S. Energy Information Administration, "Frequently Asked Questions," May 30, 2013, accessed March 18, 2014
  14. This figure is the price for delivered natural gas to the electrical power sector in 2012 dollars.
  15. U.S. Energy Information Administration, "Implications of accelerated power plant retirements," April 28, 2014
  16. Business Insider, "The 17 Countries Sitting On The Most Valuable Energy Reserves," February 13, 2014
  17. 17.0 17.1 U.S. Energy Information Administration, "Renewable electricity projections show growth under alternative assumptions in AEO2014" April 29, 2014
  18. [2] For more on the EIA made their predictions, including their technological, regulatory and market estimates see their report here.
  19. REN21, "Renewables 2014 Global Status Report," 2014
  20. Global Wind Energy Council, "China Wind Energy Development Update 2012," accessed June 4, 2014
  21. U.S. Energy Information Administration, "Total Energy," accessed June 19, 2014
  22. U.S. Energy Information Administration, "U.S. energy-related CO2 emissions in 2013 expected to be 2% higher than in 2012," January 13, 2014
  23. 23.0 23.1 23.2 23.3 23.4 U.S. Department of Energy, National Transmission Grid Study," May 2002
  24. U.S. Energy Information Administration, "How much electricity is lost in transmission and distribution in the United States?," May 7, 2014
  25. Merriam Webster, "public utility," accessed June 19, 2014
  26. Bureau of Land Management, "Electric Transmission Facilities & Energy Corridors," May 21, 2014