Energy Efficiency: How Far Can We Go?

The United States has made remarkable progress in efficient energy use since the 1973 oil crisis. In 15 years energy use increased only 8%, while gross national product increased 46%. Thus we are now using 26% less energy to produce one dollar's worth of goods and services. Some of this reduction came from structural changes in the economy, but most of it resulted from increases in energy efficiency. The experience shows that threats of shortages, rising prices, and government policies can make major changes in the operation of the economy. The questions we now face are the extent to which these trends in energy efficiency are likely to continue, and the factors that will influence them. On the one hand, overall energy efficiency has hardly changed since oil prices dropped precipitously in 1986. On the other hand, detailed studies of energy technologies all point to large opportunities for more efficient energy use, even at current fuel prices. Furthermore, it is frequently noted that other industrialized nations (with generally higher energy prices) use energy more efficiently than the United States. A review of these questions was undertaken by the staffs of five national laboratories during the summer of 1989. We undertookmore » the review at the request of the Office of Policy, Planning and Analysis in the Department of Energy. Our purpose was to provide background information needed by the Department in formulating a new national energy strategy. A ground rule of the review was that changes in government policy were not to be considered, since later phases of the national energy strategy process will examine these issues. 110 refs., 28 tabs.« less