American Energy Use in the 21st Century

The U.S. Department of Energy’s Energy Information Administration projects energy consumption only through 2035. This is probably intelligent–crystal balls start to get a little hazy once you get past 25 years out.

However, for someone like me, who is trying to show that these good and hard-working people (whom I respect enormously) are in fact wrong, the brevity of their forecasts makes it a bit difficult to show the large consequences of differences in CAGR percentages that don’t really look dramatically different.

But let’s try.

Let’s start by noting that the EIA is in a bit of a quandary regarding their projections. They have lowered their estimates of current consumption both for the world and the U.S. two years in a row, and in their most recent release they lower projected energy consumption for the U.S. for 2035, from 114 quads to 108 quads. (Their revised estimate of 2010 was 98 quads.) That’s a CAGR of 0.39%–a really slow rate of growth.

Their explanation for this is straightforward. They project that energy use per capita will decline by 0.5% per year over the 25 years covered by the forecast. So, despite an increase in the number of capitas (the EIA reckons that the U.S.population will increase by 25% between 2010 and 2035), total consumption only rises 10% over the period.

This would mean that per capita energy consumption, which declined from 332 mbtus in 1980 to 310 mbtus in 2009, would continue to decline, reaching 295 mbtus by 2035.

So let’s check their figures. The first, that population will rise 25% from 308,745,538 in 2010 to a total of 385,931,923. That’s just a tad higher than medium projections from other organizations, but certainly within the realm of reasonable possibility, so let’s use it.

But their math is off right out of the gate–if per capita energy use declines by 5% per year and if population grows to their total, U.S. energy consumption in 2035 will be 114 quads, which matches their original estimate, but not their revision to 108 quads. Oops. Let’s move on.

And we find just one other, teensy-weensy little problem here. Overall U.S. energy consumption increased 3.9% between 2009 and 2010 (from 94.7 quads to 98.16). It’s just one year, but that is ten times the growth the EIA is anticipating going forward…

And here we see in their explanation of their assumptions for the reference case for consumption a phrase that may actually explain a lot: “In the AEO2012 Reference case, energy use per capita continues to decline due to the impact of an extended economic recovery and improving energy efficiency.” Well, umm, I can see that improving energy efficiency will help keep a lid on per capita energy use, okay. But an extended economic recovery should actually boost energy consumption, cetera paribus. Shouldn’t it?

As for improving energy efficiency, well, between 1981 and 2009, American per capita energy consumption did decrease, from 332 mbtus to 310 mbtus. But that’s a decline of 0.25%, half the rate that the EIA expects us to achieve in the next 25 years.

Part 2 will show my figures for comparison.