U.S. Saves Trillions More in Energy Than People Know

By Russell Lowes

Revised January 16, 2022

In 1973, at the height of the OPEC oil embargo, the United States was coming to grips with the concept of limited oil reserves. During that year the entire country, including all companies, citizens and U.S. governments, used a total of 76 quads of energy – that is, 76 quadrillion British thermal Units (Btu).(1) 

Forty-six years later, in 2019, the pre-pandemic energy use was 100 quads, 33% more than that of 1973.

“Wait a minute,” you might ask, “our economy has expanded much more than the energy increase of 33%, right?” You would be right. Our economy expanded from $5.5 trillion to about $17.5 trillion in 2010 (inflation-adjusted) dollars.(2) Yet, all of the energy that we use as Americans – living in houses, driving cars, producing all goods and services, governing our nation and states, counties and cities – adds up to just 100 quads, just 33% more than nearly 5 decades ago.

The 235% real-dollar gross domestic product (GDP) increase in economic output from 1973 to 2019 is radically more than the 33% energy growth.  There is a small factor that could explain some of that efficiency improvement: when you factor in our national reduction in manufacturing from 1973 to 2019 (manufacturing uses more energy than services), the energy equivalence might need to be adjusted downward. However, there were periods of decline in manufacturing and the nature of the trend line has not wavered. Even in the periods with no decline, year after year, energy efficiency has improved.

Improvement in energy consumed per dollar of economic output since 1973 is undeniably impressive.  This is illustrated by the table below.

Energy Use Compared

To Gross Domestic Product                                                  

                     Year  Quadrillion Btu Trillions 2010$ Quads/GDP Trillion $  

                     1973           76                      5.5               13.8

                     2019         100                   18.3                 5.5

Increased Energy & GDP                     33%                235%              60.4% decrease in Q/$T GDP

Reduction in Energy Use/$T GDP                                                       8.3 Quad decrease

Here is the picture of that continual improvement in energy efficiency. It shows the reduction in quads of energy per trillion dollars of GDP by year. As you can see, there is very little variation in the curve. During times of a strong or weak economy, the curve has continually progressed to lowering the energy intensity of our economic output.

Units, or quads (quadrillion Btu of energy), of energy per trillion dollars of GDP have declined consistently.

So how did we do that? How did we increase our economic activity with so little energy expansion? We did so by saving energy. Saving energy falls into two categories: (1) energy conservation through cutbacks in the use of energy, and (2) through energy efficiency, the improvement in the way goods and services are produced.  However, this article and the table above, address only energy efficiency, not conservation through cutbacks.

Energy efficiency includes producing more services like delivering packages around the country for less energy. It also includes producing more goods for the same amount of energy, like reducing the metal and the energy used to make a car that performs the same function.

Computers do not use as much energy as they used to, per computer. I owned a clock radio my mother gave me in 1972 until it finally stopped working in 2020. That 7-pound radio got replaced by one that weighs 7 ounces! There is a lot less energy embedded in the newer radio.

Energy efficiency improvements in the U.S. seem to be largely due to economic forces, rather than federal governmental regulation and support. Sure, there are some federal programs like the C.A.F.E. standards for vehicles that support energy efficiency improvement, but they are not strong enough to drive much of our improvements in efficiency.

YOU save energy through energy efficiency

You contribute to this increased energy efficiency.  You may not even know that you are buying something that has been manufactured in a way that improved efficiency. 

Take the clothes you are wearing. Since 1973, that first year of increased U.S. energy awareness, clothing has been dyed using more effective technologies, like electrostatic adherence techniques. Most folks aren’t aware that technology has allowed manufacturers to use less dye, which means reducing all the energy that used to go into manufacturing dye.

And you almost certainly have changed the type of light bulbs you use. This has resulted in a reduction of energy for lighting with the newer LED lights that replaced the compact florescent lights, which replaced the incandescent light bulbs of just a bit more than a decade ago.

   
What would energy use be if EE had not improved, in 2020 based on 1973 efficiency?
  
Trillions $ GDP 201918.3Trillion Dollars GDP
Trillions $ GDP 19735.5Trillion Dollars GDP
GDP 2019 divided by GDP 19733.35GDP Factor of Increase 1973-2019
1973 Energy Use75.7Quads, actual, 1973
If Quads/Trillion GDP had not improved253.3  Quads, if energy efficiency had not improved, 2019
  
2019 Energy Use100.3Quads
Extra quads, if no 1973-2020 EE increase153.0Quads
   
If energy efficiency had not improved since 1973, we would be using 2.5 times our current energy use, assuming the same GDP growth.

With that in mind, below is a graphic of the energy efficiency categories that will be help reduce U.S. energy use per dollar of economic activity, or per average product or service bought.

The improvement in energy efficiency from 1973 to 2019 saved more energy than all the additional energy expansion since that year. This will continue into the future, and continue to negate the need for additional power plants and oil consumption for transportation and more. My point in presenting the following graph is to simply show the many categories of energy efficiency, to show how we got here, and to show how we are going forward.

https://i0.wp.com/graphics8.nytimes.com/images/2009/07/29/business/energy-environment/Picture-3.jpg
What are the major categories of energy efficiency — here are 48 of them! From: Above table: Kate Galbraith, “McKinsey Report Cites $1.2 Trillion in Potential Savings from Energy Efficiency,” New York Times, July 29, 2009, cited again in 2020,
http://graphics8.nytimes.com/images/2009/07/29/business/energy-environment/Picture-3.jpg

How much money has this saved U.S. citizens?

If the energy efficiency in the United States had not improved from 1973 to 2019, the economic consequences would be very high. Our energy use would be 253 quads instead of 100 quads per year. Pollution and resource depletion would be much higher than it has been. What about cost?

If we look at just the electric sector to get an idea, how might we calculate that? Energy comes in many forms. Of all U.S. energy use, about 40% is in the form of electricity. According to the Energy Information Administration the average cost of electricity was 10.5¢ per year in 2019. (6) The total U.S. cost of electricity for all purposes was 4,128.31 billion kilowatt-hours.(7)   That comes out to $435 billion per year.

If electricity cost per kilowatt-hour stayed the same as it is today, with the higher usage, and the use of electricity were to rise at that multiple of 2.53, the factor of increase of energy we would be using compared to the energy we are using, comes to $1,101 billion. This $1,101 billion is the amount that we might be spending on electricity alone instead of the current $435 billion we actually spent in 2019. That is an extra $665 billion we might have spent on electricity in 2019. If you multiply that out by 10 years, that would be an extra $6,650 billion, or $6.65 trillion per decade.

Doing some very rough math, if the rest of the energy pie were to be at the same cost per unit of energy as electricity, and as electricity is about 40% of our energy usage in the U.S., the extra cost would be that $6.65 trillion divided by 0.4 (40%) yields $16.6 trillion in extra spending on energy per decade. This number is highly speculative, because of many different unknown factors. For example, more rapid depletion of oil, coal, uranium, etc. could increase the price, but with such a rush on energy, there might be more innovation, which could decrease price. Also, energy sources and uses all have varying efficiencies. Electricity is different in energy efficiency than the non-electric energy options like gas and coking coal.

It is certain, however, that with such an extreme increase in energy usage, the costs would have gone up by many trillions of dollars.

Where do we go from here?

The technical potential to reduce energy use is extremely high, at about perhaps 80% of the current use, through energy efficiency.  However, reality versus potential might meet half way in between. That is what Arjun Makhijani and the Institute for Energy and Environmental Research project by 2050 in the book, “Carbon Free and Nuclear Free,” (p. 290) represented in the following graph. In this projected energy mix, energy efficiency takes over about 40 more quads. When you combine this in the next graph (in the reference of endnote 3), this causes the total of about 100 quads to go down to just under 80, as energy efficiency contributes 40 more quads, and as our economy expands. See graph below.(3)

In a ScienceDirect article, Jonathan Cullen and Julian Allwood state, “the overall efficiency of global energy conversion to be only 11 per cent; global demand for energy could be reduced by almost 90 per cent if all energy conversion devices were operated at their theoretical maximum efficiency.”(4)

Amory Lovins, in an IOP Science article, says that energy efficiency has gone against the conventional wisdom and gotten cheaper to implement over time, per unit of energy saved. He shows how energy efficiency options have expanded over time, in a seemingly inexhaustible way.(5)

Conclusion

First, the United States has saved many trillions of dollars by becoming more efficient year after year, since 1973.

Second, the United States has consistently reduced energy use, per unit of economic output. It has done so every year, from 1973 through 2019, and there is no sign of decline in the improvement of energy use per unit of GDP. To the contrary, the curve is so consistent that it indicates a strong march forward in this improvement of energy efficiency.

Third, energy efficiency improvement has largely been in the absence of federal support for most of the categories in the prior graph. If we apply more federal support for an increase in the rate of energy efficiency improvement, this overall curve could bend much faster toward reducing our energy use.

Put another way, three fifths of our current energy pie is being handled by energy efficiency. To put this more exactly, of the 253 quads we would now be using had we not improved our use of energy, 153 quads, or three fifths is from EE, and 100 quads, or two fifths, is from energy sources, primarily including fossil fuels, renewables and nuclear energy.

Fourth and last, other benefits, like CO2 reduction, are commensurate with the reduction in cost to society, along with resource depletion. Where does all this lead to in the future? Some analysts say that we could still technically reduce our energy use by about 70-90%. That would be a drop from 100 quads to roughly 20. Although technical limits are rarely met, we could reduce our energy consumption by much of that 80 quad difference. This would lead to enormous savings, cleaner air, cleaner water, reduced mining of energy resources (with reduced associated water use and pollution increase), and many other improvements in the quality of our lives.

————

Special thanks go to Vince Taylor, who wrote “Energy: The Easy Path” while with the Union of Concerned Scientists, in 1979, and to Charles Komanoff, who has written extensively about energy options including energy efficiency for decades.


In a ScienceDirect article, Jonathan Cullen and Julian Allwood state, “the overall efficiency of global energy conversion to be only 11 per cent; global demand for energy could be reduced by almost 90 per cent if all energy conversion devices were operated at their theoretical maximum efficiency.”(4)

Amory Lovins, in an IOP Science article, says that energy efficiency has gone against the conventional wisdom and gotten cheaper to implement over time, per unit of energy saved. He shows how energy efficiency options have expanded over time, in a seemingly inexhaustible way.(5)

Conclusion

First, the United States has saved many trillions of dollars by becoming more efficient year after year, since 1973.

Second, the United States has consistently reduced energy use, per unit of economic output. It has done so every year, from 1973 through 2019, and there is no sign of decline in the improvement of energy use per unit of GDP. To the contrary, the curve is so consistent that it indicates a strong march forward in this improvement of energy efficiency.

Third, energy efficiency improvement has largely been in the absence of federal support for most of the categories in the prior graph. If we apply more federal support for an increase in the rate of energy efficiency improvement, this overall curve could bend much faster toward reducing our energy use.

Fourth and last, other benefits, like CO2 reduction, are commensurate with the reduction in cost to society, along with resource depletion. Where does all this lead to in the future? Some analysts say that we could still technically reduce our energy use by about 70-90%. That would be a drop from 100 quads to roughly 20. Although technical limits are rarely met, we could reduce our energy consumption by much of that 80 quad difference. This would lead to enormous savings, cleaner air, cleaner water, reduced mining of energy resources (with reduced associated water use and pollution increase), and many other improvements in the quality of our lives.

————

Special thanks go to Vince Taylor, who wrote “Energy: The Easy Path” while with the Union of Concerned Scientists, in 1979, and to Charles Komanoff, who has written extensively about energy options including energy efficiency for decades.


(1) U.S. Department of Energy, Energy Information Administration, http://www.eia.doe.gov/totalenergy/data/monthly/pdf/mer.pdf and https://www.eia.gov/totalenergy/data/monthly/#summary with the specific Excel spreadsheet link at https://www.eia.gov/totalenergy/data/browser/xls.php?tbl=T01.01&freq=m
(2) Statistica, https://www.statista.com/statistics/188141/annual-real-gdp-of-the-united-states-since-1990-in-chained-us-dollars/ and Data360, http://www.data360.org/dataset.aspx?Data_Set_Id=354
(3) Arjun Makhijani, Ph.D., Institute for Energy and Environmental Research, Carbon Free and Nuclear Free, http://ieer.org/wp/wp-content/uploads/2007/08/CFNF.pdf November 5, 2010 Note: while this was written in 2010, the projection for 2020 was very close to actual energy use.
(4) Jonathan M. Cullen and Julian M. Allwood, “Theoretical Efficiency Limits for Energy Conversion Devices,” ScienceDirect, Elsevier, Volume 35, Issue 5, May 2010, Pages 2059-2069, in the abstract at: https://www.sciencedirect.com/science/article/abs/pii/S0360544210000265?via%3Dihub
(5) Amory Lovins, “How big is the energy efficiency resource?” IOP Science, Environ. Res. Lett. 13 (2018) 090401, https://iopscience.iop.org/article/10.1088/1748-9326/aad965
(6) Energy Information Administration, https://www.eia.gov/totalenergy/data/browser/?tbl=T09.08#/?f=A
(7) Energy Information Administration, https://www.eia.gov/outlooks/steo/report/electricity.php

Appendix A – Quads of Energy Per Year

From:

      YearQuads
197375.7
197473.9
197571.9
197675.9
197777.9
197879.9
197980.8
198078.0
198176.1
198273.0
198372.9
198476.6
198576.3
198676.6
198779.0
198882.7
198984.7
199084.4
199184.4
199285.7
199387.3
199489.0
199590.9
199693.9
199794.5
199894.9
199996.5
200098.7
200196.1
200297.5
200397.8
2004100.0
2005100.1
200699.4
2007100.9
200898.8
200993.9
201097.5
201196.9
201294.4
201397.1
201498.3
201597.4
201697.3
201797.6
2018101.2
2019100.3
202092.9

Appendix B – GDP $2010 Per Year

From: https://www.statista.com/statistics/188141/annual-real-gdp-of-the-united-states-since-1990-in-chained-us-dollars/

YearGDP $ Trillions
19735466
19745436
19755425
19765718
19775982
19786313
19796513
19806496
19816661
19826541
19836841
19847336
19857642
19867906
19878180
19888522
19898835
19909001
19918991
19929308
19939564
19949950
199510217
199610602
199711074
199811570
199912120
200012620
200112746
200212968
200313339
200413846
200514332
200614742
200715018
200814998
200914617
201014992
201115225
201215567
201315854
201416254
201516727
201617001
201717404
201817913
201918300
202017497