Powering Up: A Quick Introduction to Our Energy Economy

To understand our energy economy and engage in productive discourse about what the future may hold, it helps to start with a broad look at the basics and few key trends.

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Before we dive deeply into the energy conversations at next week's 2013 Aspen Ideas Festival, it will be helpful to take a moment to assess the state of America's energy economy today. Let's start with the basics.

Where does our energy come from?
Petroleum, natural gas, and coal supply the majority of energy consumed in the U.S. According to the U.S. Energy Information Administration (EIA), the primary energy sources for the United States in 2011 were:

  • Petroleum (oil): 36%
  • Natural gas: 25%
  • Coal: 20%
  • Renewables: 9%
  • Nuclear: 8%

Which category is experiencing the fastest growth?
One big story hiding in these numbers is the fast rise of shale gas as a percentage of natural gas usage, and of our overall energy mix. Shale gas is natural gas trapped within shale formations, and it is accessed with a combination of horizontal drilling and hydraulic fracturing. The annual production of shale gas in the U.S. has taken off in the past decade, growing from 1 trillion cubic feet in 2006 to 7.8 trillion cubic feet in 2011.

Looking ahead, the U.S. is poised to produce more natural gas than it consumes and to become a net exporter of natural gas, possibly as soon as 2020. This will be due in large part to the steady increase in domestic shale gas production.

What role does renewable energy play?
Consumption of renewable energy sources (solar, wind, and biomass chief among them) has grown slowly but steadily in recent years, increasing by 4 percent over the past decade. As renewables continue to play a larger role in our energy economy, their use could help reduce carbon emissions--a highly desirable goal since carbon dioxide measurements in the atmosphere recently surpassed 400 ppm.

How much energy do we use?
Short answer: More than you can imagine. Long answer, courtesy of the EIA:

"Total U.S. energy use in 2011 was about 97.5 quadrillion (=1015, or one thousand trillion) Btu. One quadrillion Btu, often referred to as a "quad," therefore represents about 1% of total U.S. energy use."

One "quad" is the equivalent of 172 million barrels of oil, 50 million tons of coal, or about 1 trillion feet of natural gas. Still with us? 97.5 quadrillion Btu (British thermal units) is a number so huge as to be nearly incomprehensible to mere mortals, and even 1 quad seems impossibly big. (What, exactly, does 50 million tons of coal look like?) A more enlightening approach to quantifying our energy use may be to look at per capita consumption.

According to the EIA, per capita consumption in the U.S. in 2011 was 312 million Btu. The good news is that we're consuming less energy than we did in the past: 2011 per capita consumption was 13 percent less than it was in 1978.

How does our energy consumption compare with that of other countries?

We still have the highest per capita consumption in the world, and our per capita consumption is four-and-half times greater than per capita consumption worldwide. Even with greater efficiencies and energy-conservation efforts, the U.S. demand for energy will continue to grow as the population grows. The EIA predicts total annual energy consumption in the U.S. to grow by 9.7% through 2040. Global energy consumption is rising quickly too, with total world consumption likely to increase 53 percent by 2040.

What does this mean for America and the world?
The U.S. may be using less energy per capita than it used to, which is a great sign. And we are exploring and embracing cleaner energy sources, which bodes well for the health of our planet. But one fact is undeniable: We are going to need a lot of energy in the decades to come. Where will that energy come from?

In upcoming posts, we'll delve deeper into our current energy economy, explore some of the most exciting energy trends and innovations, and share what experts are saying about our energy future.



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