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).

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 chart)!

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.

About Mark J. Perry 262 Articles

Affiliation: University of Michigan

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

He holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. and an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota.

Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.

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1 Comment on 2009: Most Energy-Efficient Economy in History

  1. Seems like this is pretty suspect set of numbers in terms of actual energy impact of the US economy as we have massive importation of goods manufactured abroad. This set of numbers could easily be due to the decline in US based manufacture and the rise of the FIRE economy as actual efficiency gains.

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