U.S. Drop In Energy Use: It’s A Feature, Not a Bug!

Investment advisors like Barron’s are apparently alarmed by a sudden drop in U.S. energy use, and believe that it indicates that our economy must now be in the deep freeze. Money guyswho always equate rise in GDP with rise in energy usecan imagine no other explanation for reduced energy use than that we are now experiencing economic doom, hiding in caves and struggling to work in wheelbarrows instead of our God-given SUVs.

Those of us who read green tech news, of course, know that decoupling energy use from GDP is the holy grail of an advanced low-carbon economythat the world’s climate-conscious nations are striving to achieve. There’s even a pretty common name for it, “reducing energy intensity.”


image via Gold-Speculator

For example, we read here how GM cut the energy intensity of its manufacturing plant 30 percednt or that globally, energy intensity has not droppedmostly because developing nations tend not to do as well as already industrialized ones, and there’s more of them now, with China ramping up.

From 1989 – 2010, electric utility efficiency programs saved about 1,171 billion kilowatt-hours of electricity, saving enough to power 102 million average U.S. homes for one year (based on 2010 average residential usage of 11,500 kWh/year), according to the U.S. Department of Energy.

It is a given in climate policy circles that cutting the amount of energy used to generate a unit of GDP is a good thinga target to aim for.

So it is a bit disconcerting (to this green reader, at least) to notice that this is not the typical view. We all dwell in such different walled information-ghettos that the same news means something completely different to others.

Yes, we went through a financial near-depression in 2008. But simultaneously, we had also begun serious climate policy in 2005 that has been yielding great energy news every day on green tech sites for the last four years. Some states began utility energy efficiency mandates as early as 1999, and ramped them up since.

By contrast with our satisfaction with stories of energy efficiency, among the money-centric, there is a hysterical reaction of alarm in response to news of the drop in energy use over the last few years, first fretted about by the Wall Street Journal during the financial shock of 2008. (Perhaps this visceral fear of less energy use is what is behind the antique lightbulb fetish of the Republican Congress?)


image via Bureau of Economic Analysis

And even though now our GDP is now back up above 2008 levels, our energy use remains far below 2008 levels. How can that be?

Well, that’s what better building codes, utility efficiency improvements, tighter appliance efficiency advances and higher CAFE standards are all about.

image via EERE

One example of the electricity-saving policies electric utilities now use to meet state energy efficiency mandates is “demand response.” Because peak hours can take a lot of fossil fuel (and hence carbon emissions) to power up, utilitiesin many of the states with climate policies that incentivize itoffer some of their big commercial customers a break on their utility bills if they allow the utility to cycle off their A/C, for example, for perhaps a minute every half hour during peak hours.

(Related: Data Shows Customer Demand for Demand Response Smart Grids)

By aggregating their demand-response customers into rolling blocks with brief energy cuts each, for so brief a moment as to be imperceptible at each site, utilities don’t need to fire up a peaker plant. Even many home energy users can be aggregated like this.

Susan Kraemer enjoys writing to publicize the many great solutions for climate change that we can find if we just put our minds to it. She covers renewable policy and clean energy for CleanTechnica and GreenProphet and green building at HomeDesignFind. She recently moved home to Waiheke Island where her writing is now powered by the 80% renewable electricity that powers New Zealand.


  • Reply February 27, 2012


    Energy efficient homes save electricty also, circulator pumps in boilersthe?!!! run less, furnaces fans runs less, air conditioners, all these things add up.

  • Reply February 28, 2012

    James Sexton

    The electric consumption  graph is a bit misleading….. and it’s pretty clear you’re not understanding what is going into our GDP…… here’s a newsflash, you can not decouple GDP from energy or fuel use.  Here’s another newsflash, cost justified efficiencies happen in spite of, not because of govt. intrusion.  Do you think Henry Ford’s assembly line occurred in order to be less efficient?  Do you think people insulate their homes because the govt. told them to?  Do you really believe the CAFE standards and all of the other initiatives you mentioned only manifested themselves in the last 2 years? 

    Lastly, “….. offer some of their big commercial customers a break on their
    utility bills if they allow the utility to cycle off their A/C, for
    example, for perhaps a minute every half hour during peak hours.”  …….  Gosh I hope you don’t work for a utility.  Do you understand how vapid that statement is?  A minute?  Electric motors peak demand comes when the motors are starting up!  Do you understand that businesses work to save expenses such as electric bills?

    This is the difficulty I have with smart grid people…… they’re just not very smart.  And the cost of the technology implemented will never be and can never be justified.

    • Reply February 28, 2012


      “duurrr, business efficient and smart, government stupid and wasteful!”

      Yeah, keep flogging that dead horse.

    • Reply February 28, 2012


      you must uncouple energy from GDP for the simple Fact is Big corporations have installed and are now using Renewable energies, like Solar and Wind

  • Reply February 28, 2012


    MY question is:
    Why are we obeying all the “rules” yet our cost for using less energy are going up?
    All the “green” nuts are telling us to switch to renewable energy – which many of us have.
    Here in Hawaii we still must pay a “connect fee” when we are tied into the grid. Even if our usage ends up being zero (‘0’). Many of us chose to NOT spend the cash to create too much electricity since we have to pay anyway and costs are still NOT reasonable for ‘going green’.
    We recently got a notification from our electric company telling us our rates were going to INCREASE because THEY aren’t making enought money “because so many people are going to renewable energy”. Our STATE government is on the band wagon and is spending $400,000 taxpayer money to “help us lower our consumption” which will LIKELY get us another rate increase down the road.
    Our GOVERNMENT – present administration incuded – is pushing us into a ‘catch-22’ where no matter what we try to do we are going to ‘get the shaft’ and be forced to smile about it.
    Too much fun!

    • Reply March 5, 2012

      Susan Kraemer

      That is a terrible policy. I had no idea it was the rule in Hawaii – though many states in the South follow that rule.

      In California it is the opposite. We pay through the nose if we are profligate energy users, and get a great rate per kilowatt hour if we are misers!

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