As the global economy continues to expand, the need for energy to sustain that growth is increasing as well.
People and businesses depend on energy for every aspect of life, from heating and cooling homes and workplaces to fueling transportation to powering appliances and other conveniences of modern life. As demand increases, energy producers must find ways to keep up, either by increasing production or by producing more energy from existing inputs.
Energy efficiency creates a number of benefits for the economy overall. Consumers and businesses that rely on energy benefit from lower prices because it is easier to meet demand with lower levels of energy production. Utilities and other energy producers can save on the cost of energy production and transmission infrastructure with more efficient generation. And more efficient energy use also has environmental advantages: efficient energy production releases lower levels of greenhouse gas and other pollutants, along with requiring less water use.
With greater needs and these benefits in mind, businesses and governments have developed more tools to promote energy efficiency in recent decades. Utilities have developed more efficient technologies for generating energy and moved away from less efficient fuel sources. Many states and localities have adopted policies like Energy Efficiency Resource Standards or more stringent building codes to ensure continued improvements in energy efficiency. Programs like the LEED (Leadership in Energy and Environmental Design) certification for buildings and the government’s ENERGY STAR certification for consumer appliances have helped raise standards of energy efficiency for many aspects of everyday life.
But one of the biggest factors improving energy efficiency is a shift in the nature of the U.S. economy. Historically, the U.S. generated a far greater share of its economic output from energy-intensive industries like manufacturing. Over time, more of the economy has shifted toward services and technology, which require far less energy input, and the energy intensity of the economy has declined over time. According to the U.S. Energy Information Administration, the amount of energy consumption relative to GDP has decreased by 58 percent since 1950.
The result of these collective shifts has contributed to improved efficiency across the U.S. economy. From 1980 into the mid-2000s, the growth in energy consumption mostly tracked population growth: as the U.S. added more people, it also consumed more energy. Since then, however, energy consumption has begun to decline, while population and GDP have continued to grow.
The U.S. also has room to continue improving in the efficiency of its energy production, thanks to an increasingly diverse — and more efficient — mix of energy sources. Fossil fuels including natural gas (34 quadrillion BTU), crude oil (23.6), and coal (10.7) constitute a sizable majority of U.S. energy production. However, energy production from fossil fuels has moved away from highly inefficient coal and toward more efficient natural gas in recent years, and other alternatives, including renewables like wind, have become a much more significant portion of the U.S. mix.
In the meantime, some states are further along than others in advancing energy efficiency goals. Several factors explain why. Many of the leading states have stronger policies and standards regulating energy efficiency in utilities, buildings, or products like vehicles and appliances. Others have sped their transitions away from more inefficient fossil fuels toward efficient renewable sources with new investments and regulations. And some benefit from other economic and demographic factors, like the aforementioned shift toward less energy-intensive industries or densely populated urban areas, which promote energy efficiency in buildings and transportation. Together, these factors have put states like New York, Massachusetts, and California toward the top of the list of most energy efficient locations.
To determine the states with the most energy efficient economies, researchers at Commodity.com analyzed the latest data from the U.S. Energy Information Administration and the Bureau of Economic Analysis. The researchers used this data to rank states by their total energy consumption per GDP. In addition, the total energy consumption per capita, total energy consumption, and total GDP were provided for reference.
The analysis found that total energy consumption per GDP in California is 2,555.9 BTU per dollar, compared to 4,691.3 nationally. Out of all states, California has the 4th most energy efficient economy.
For more information, a detailed methodology and complete results, you can find the original report on Commodity.com’s website: http://commodity.com/blog/energy-efficient-states/