Energy Efficiency in the United States: 35 Years and Counting

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Energy Efficiency in the United States: 35 Years and Counting Energy Efficiency in the United States: 35 Years and Counting Steven Nadel, Neal Elliott, and Therese Langer June 2015 Report E1502 © American Council for an Energy-Efficient Economy 529 14th Street NW, Suite 600, Washington, DC 20045 Phone: (202) 507-4000 ● Twitter: @ACEEEDC Facebook.com/myACEEE ● aceee.org 35 YEARS AND COUNTING © ACEEE Contents About the Authors ..............................................................................................................................iii Acknowledgments ..............................................................................................................................iii Executive Summary ........................................................................................................................... iv Introduction ............................................................................................................................... iv The Past 35 Years ...................................................................................................................... iv The Next 35 Years ..................................................................................................................... vi Pathway to an Energy-Efficient Future ............................................................................... vii Conclusion .................................................................................................................................. x Introduction .......................................................................................................................................... 1 The Past 35 Years ................................................................................................................................. 1 Energy Intensity ......................................................................................................................... 1 Benefits to the US Economy, Our Security, and the Environment ..................................... 2 Buildings and Equipment ......................................................................................................... 4 Industry ....................................................................................................................................... 9 Transportation .......................................................................................................................... 12 Utilities ...................................................................................................................................... 17 Summary ................................................................................................................................... 18 Energy Efficiency Drivers over the Past 35 Years ......................................................................... 18 Market Drivers ......................................................................................................................... 18 Policies ....................................................................................................................................... 21 Discussion ................................................................................................................................. 30 Challenges ................................................................................................................................. 32 The Next 35 Years .............................................................................................................................. 33 Opportunities ........................................................................................................................... 33 i 35 YEARS AND COUNTING © ACEEE Pathway to an Energy-Efficient Future ................................................................................ 37 Conclusion .......................................................................................................................................... 43 References ........................................................................................................................................... 45 ii 35 YEARS AND COUNTING © ACEEE About the Authors Steven Nadel is ACEEE’s executive director. He has been at ACEEE for 26 years and served as deputy director of the organization and director of ACEEE’s Utilities and Buildings programs before being promoted to executive director in 2001. Prior to joining ACEEE, he planned and evaluated energy efficiency programs for New England Electric, a major electric utility; directed energy programs for the Massachusetts Audubon Society, the state’s largest environmental organization; and ran energy programs for a community organization working on housing rehabilitation in the poorest neighborhoods of New Haven, Connecticut. He has worked in the energy efficiency field for 35 years and has more than 200 publications on energy efficiency subjects. Neal Elliott coordinates ACEEE’s overall research efforts. He is an internationally recognized expert and author on energy efficiency, energy efficiency programs and policies, electric motor systems, combined heat and power (CHP) and clean distributed energy, and analysis of energy efficiency and energy markets. A frequent speaker at domestic and international conferences, he joined ACEEE in 1993. Therese Langer works to improve the efficiency of both vehicles and systems for the movement of passengers and freight. Her current areas of focus include advancing technologies and policies to improve light- and heavy-duty fuel economy, integrating transportation into greenhouse gas reduction programs at the state and national levels, quantifying the economic impacts of overdependence on oil, expanding the multimodal goods movement infrastructure, and understanding consumers’ vehicle purchase decisions. She joined ACEEE in 2001. Acknowledgments The authors gratefully acknowledge external reviewers, internal reviewers, colleagues, and sponsors who supported this report. External expert reviewers included Carl Blumstein (University of California), Jeff Harris (Alliance to Save Energy), Mark Levine (Lawrence Berkeley National Laboratory), Jim McMahon (Better Climate), Maxine Savitz (retired from Honeywell), and Rodney Sobin (National Association of State Energy Officials). Internal reviewers included Jennifer Amann, Jim Barrett, Naomi Baum, Patrick Kiker, Maggie Molina, Glee Murray, and Lowell Ungar. External review and support do not imply affiliation or endorsement. Last, we would like to thank Fred Grossberg for managing the editorial process, Elise Marton and Roxanna Usher for copy editing, Eric Schwass and Charlie Herron for graphics support, and Patrick Kiker for his help in launching this report. iii 35 YEARS AND COUNTING © ACEEE Executive Summary INTRODUCTION In 1973, the Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo that increased energy prices and spurred efforts to conserve energy and improve energy efficiency in the United States and worldwide. In 1980, energy efficiency researchers formed the American Council for an Energy-Efficient Economy (ACEEE), whose mission is to act as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviors in order to help achieve greater economic prosperity, energy security, and environmental protection. From our vantage point as we turn 35 this year, we believe that energy efficiency has been a major success story, providing net benefits for households, businesses, the US economy, our security, and the environment. Over those 35 years we have learned many lessons and accomplished many goals, which this paper highlights. But just as important, we look ahead at possible and recommended pathways for the next 35 years, through 2050. THE PAST 35 YEARS From 1980 to 2014, US energy use increased by 26%. However, over this same period, US gross domestic product (GDP) increased by 149%. A common approach for looking at these two variables together is to examine energy intensity, defined as energy use per real dollar of GDP. Energy intensity declined from 12.1 thousand Btus per dollar in 1980 to 6.1 in 2014, a 50% improvement. The improvement in energy intensity averaged 2.0% per year over this period. Energy efficiency was an important contributor to this improvement. However efficiency gains were also partly due to shifts in the US economy away from some energy- intensive segments (e.g., heavy manufacturing). Based on available data, we conservatively estimate that about 40% of the improvement in energy intensity was due to structural shifts, and 60% was due to efficiency improvements. Energy efficiency savings in 2014 were about 58 quadrillion Btus (a quadrillion is 10 to the 15th power), saving US consumers and businesses about $800 billion in 2014 (based on the average 2014 energy price). This comes to about $2,500 per capita. Efficiency investments and savings also generate jobs, including direct jobs installing efficiency measures, indirect jobs upstream in the supply chain, and jobs induced as energy bill savings are spent elsewhere and multiply through the economy. Energy savings can also help to drive modest overall growth in the US economy. Further, energy efficiency savings over the past 35 years have contributed to our nation’s security and improved our environment. For example, looking specifically at petroleum, imports accounted for 33% of US crude oil use in 1983 (the recent low point), increasing to 67%
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