Thursday, June 20, 2013

Making America More Competitive: US Energy Consumption Drops 2.8% Even As Global Consumption Rises

The US economy created about 2 million jobs in 2012, and our population rose. Despite a bigger economy, our total energy use dropped a significant 2.8%, even as the world's energy consumption increased 1.8%.

The revolution on the demand side of US energy markets is truly stunning and is making America more globally competitive.  Indeed, the US is using less energy that is often cheap in global comparative terms. For example, natural gas is priced around $10 for a thousand cubic feet in Europe and even more in Asia.  Electricity also costs typically much more per kilowatt-hour in Europe and Japan, and consequently electricity is used even more efficiently in Japan and many European countries than it is typically in the USA.

By itself, using less units of energy to get a job done improves competitiveness.  Using less units of energy that are priced low is a sure recipe for decreased energy costs and so improved competitiveness. America is increasingly following that energy recipe.

And that's one reason why some manufacturing is moving back to the USA.

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