Wednesday, November 25, 2009

Counting Our Energy Blessings

Thanksgiving is a perfect time to reflect on the many energy blessings the US enjoys. While we tend to focus on our problems, which seem numerous and overwhelming at times, there are a number of positives we should also recognize. Here's a short list of them to contemplate over tomorrow's turkey dinner:
  1. The US still produces roughly three-fourths of the energy we consume, well ahead of the EU and Japan, and with prudent investment in energy efficiency and new production of all kinds, that ratio could grow significantly over the next decade.
  2. The energy efficiency of the US economy has been improving steadily. Measured in terms of BTUs per dollar of real output, our energy consumption per GDP has fallen by more than 15% in the current decade. That's one reason that our greenhouse gas emissions increased by much less than expected, even before the recession started.
  3. Only a few years ago, the US natural gas supply and demand balance looked like a slow-motion train wreck. Thanks to a tremendous surge of production from shale gas reservoirs and other unconventional sources, US gas production last year reached the highest level since the mid-1970s. If the incremental production added since 2005 were all turned into electricity, it would equate to the output of 100,000 MW of wind turbines.
  4. Despite the weak economy and extremely challenging financial markets, US wind power capacity is on a pace to grow by more than 7,000 MW this year, surpassing all but last year's record additions, and bringing total wind capacity by year end to over 32,000 MW.
  5. US crude oil production looks set to snap a 17-year trend of annual declines. The API indicates that year-to-date 2009 production is up by 6.8% over last year, as major new projects initiated earlier in the decade when prices began to rise come on stream.
Finally, here's a non-energy statistic that surprised me. Even after contracting by 3% from last summer's high point, US real GDP has grown this decade by an amount that exceeds the entire GDP of Brazil, and our nominal GDP is up by an amount roughly equal to the entire economy of China. That shouldn't make us feel complacent, as both of those countries are growing at much faster rates than we are, but it should at least provide some perspective on the discouraging comparisons we're accustomed to hearing.

Energy Outlook will observe the traditional long weekend and resume postings early next week. Happy Thanksgiving!

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