Energy and the US Economy

Short Version: Energy is 10% of the US economy—over $1 trillion per year, or $4000 per year for each person, with roughly $1000 of that leaving the country, to supply the average US resident with more than 100 times more energy than they use internally. About 85% of the energy used is from fossil fuels, which are being burned much faster than nature makes more.

Friendlier but Longer Version: During the course, we’ll take a look at the big sources of energy, the big issues in energy use, the “why you might care” and “what it means to you” questions. For now, a few more-or-less connected numbers and graphs may be useful. This course is not about having you memorize numbers, but you should be aware of magnitudes—which things are really big and matter a lot, versus those that are small and can be safely ignored (unless you’re the wonk on this topic and need to know everything!).

As you just saw, the food you burn inside powers you at the same rate, on average, as a bright old-style light bulb (100 watts) that is turned on. But, the food may have been cooked, after it was shipped to you in a refrigerated truck after it was harvested by a corn-picker or combine from a field that first was plowed by a tractor. The plowing and harvesting and trucking and refrigerating and cooking all required energy. You probably are reading this on an electric-powered computer, in a room that is heated in winter and cooled in summer using energy. If there is glass on the computer screen, it started out as sand, which was melted using energy. Aluminum or iron or other metals were smelted from ores, using energy.

Video: Energy Use (1:09)

Energy use increases as economies grow. The plots show energy intensity (how much energy is used per dollar of economic activity) and economic activity (dollars per person per year), plotted against total energy use, for the different continents. Bigger economies use more energy. There is no strong relation between how big an economy is and how efficiently it uses energy, but a slight suggestion that bigger economies are more efficient.

Click here for a video transcript of "Energy Use".

DR. RICHARD ALLEY: These are a couple of plots showing some information about human use of energy and economy. Use of energy per person per year is on the bottom-- zero, not using any over to using a huge amount. And this amount is about 100 times more energy used outside the person than inside. And what you'll notice is this is economic activity-- how big the economy is, how many dollars per person per year. And poor people don't use much energy, and rich people use a lot of energy. Now, you might first think that that means that rich people are just wasteful. But what you see above is how much energy is needed to generate $1 of economic activity, and there just isn't much relationship there. So, it's not that rich people are wasting more energy. They get as much activity out of a barrel of oil as poor people do. They just generate way more economy. And so, you use more energy when you're rich, basically.

Credit: Dutton Institute. "EARTH 104 Module 2 Energy Use." YouTube. Novermber 19, 2014.

Source: Data from US Energy Information Agency, for 2006; plot prepared by Richard Alley.

You get the idea. And, if you add up all that energy, there is a lot of it. The total energy use in the US economy, divided by the number of people, comes to a bit over 10,000 watts per person—all together, everything that is going on around you to take care of you involves more than 100 times the energy use inside of you. You don’t really have more than 100 incandescent bulbs burning all the time to take care of you, but all the plowing and harvesting and trucking and refrigerating and cooling and smelting and melting and heating and cooling and … that do take care of you are using energy at the same rate as more than 100 old light bulbs, or 100 of you.

You might imagine that you have 100 energy “serfs” doing your bidding… but if you actually had 100 serfs to do your bidding, they would spend most of their effort taking care of themselves and staying alive rather than doing for you. Plus, there is no way that those serfs could actually pick up your car and run down the highway at 65 miles per hour (100 km per hour)!

This much energy doesn’t come cheaply, though. Energy costs are roughly one-tenth of the entire US economy. That comes to about $1 trillion per year recently, or about $4000 per person per year, with roughly $1000 of that spent outside the US to pay for energy imports. (These numbers bounce around some from year to year; you can get updates at the US Energy Information Administration. So, each year, a US resident is sending ~$1000 to people outside the US, primarily to pay for gasoline. Those people overseas may use those dollars to buy US-made products, or to visit the US, or to buy US companies, or to buy camels or classic paintings, or to buy bullets, or in other ways—once the money is sent over the border, it is theirs….