The US Energy System: Visualizing the Lay of the Land

When I talk with people casually about energy, the many sources and uses of energy are often confused and so I’ve written this blog post to provide a basic introduction to the US energy system and clarify a few key concepts.

Because the energy system of the United States is a complicated beast, let’s start with this amazing flow chart created by the Lawrence Livermore National Laboratory. Energy sources are shown along the left side, electricity generation is show in the center, and the pink boxes on the right side depict energy use by economic sector.

Estimated U.S. Energy Use in 2014

Let’s first make a distinction between electricity and everything else. In the US, we generate electricity, which is a secondary form of energy, from coal, natural gas, nuclear and renewables—but we no longer use oil for electricity. As the chart shows, there are a very few exceptions that account for less than 0.01% of generation. Thus the price of oil has no direct effect on the cost of electricity in the US.

Of course, the price of oil is important to the US economy—as the chart shows, petroleum is the largest single source of energy, but 70% of all oil used in the US goes to transportation. Other significant uses of oil are for industrial products (e.g., asphalt, chemicals and lubricants) and space heating (mainly in the Northeast). The good news, not shown in the chart above, is that the US imported 60% of the oil we used in 2005, but this fell to only 27% in 2014—the lowest amount since 1985. However, we still use almost 7 billion barrels of oil per year and over 25% of our imports come from nations who are either hostile or have dubious human rights records, so there’s certainly a lot of progress yet to be made.

Turning back to electricity, coal is still the single largest fuel used for electricity in the US and is used to generate 39% of US power . Coal is a low-cost fuel that packs a huge amount of thermal value per unit, but it’s also destructive to produce and dirty to burn. Not only is coal the largest source of carbon dioxide, but an eye-opening report by researchers at Harvard Medical School estimates that coal combustion causes between $65 billion and $187 billion in impacts from air pollution alone. The EPA’s Clean Power Plan and cheap domestic natural gas are leading to the accelerated shut-down of older (and dirtier) coal-fired plants.

Natural gas is the second-largest source of energy and it has found favor in a range of settings: it’s used to generate electricity, especially in the Western US, and is commonly used for space heating, water heating and cooking in the residential and commercial sectors. But, what maybe surprising, is that natural gas’s largest single use is in the industrial sector to power factory processes, and also as a feedstock for fertilizer, plastic and other products.

The last source I want to discuss is renewable energy: Hydropower, wind, solar, geothermal and biomass are all individually relatively small contributors—but together they make up almost 10% of the total US energy supply. Renewables are also growing very quickly in the US and around the world. My dissertation looks in detail at the achievable potential of wind power, so I look forward to discussing that in a future post—but all I want to point out here is that renewables now exceed the contribution of nuclear power as an overall source of power in the US.

Nuclear power is a controversial, but still-important source of electricity in the US. Nuclear power is either the “most expensive way to boil water” as wags have called it, or the key to meeting the rapidly growing energy demands of an urbanizing world, as “ecomodernists” like those at The Breakthrough Institute have labeled it. Because nuclear power and the issues surrounding it are complicated, I’ll save a more detailed analysis for future posts.

Before I wrap this post up, I want to highlight one last thing from the chart above: the light grey traces in the graph depict “rejected energy” which is energy lost in transmission, generation and waste heat. So the headline of this graph is that the US consumed 97.4 quads of energy in 2013, but produced only 38.4 quads of useful energy services. And this doesn’t account for inefficiencies by the end user such as leaving the lights on, heating an empty building or driving in circles to find parking.

In other words, a maximum of only 39% of the energy we produce is put to useful ends! This fact highlights the critical importance of energy efficiency or improving the efficiency of how energy is generated, transported and used. “Negawatts” as the Rocky Mountain Institute have dubbed energy savings from efficiency, is not only by far the cheapest way reduce pollution, efficiency can also have a host of follow-on benefits such as more comfortable living spaces and higher-quality products. People focused on the international energy picture often emphasize that efficiency can’t help, for instance, the 300 million Indians who live without access to electricity. But even those in the more-energy-is-better camp would probably agree that wasting nearly 40% of what we produce on inefficient production, transmission and distribution systems is too high.

In the next post, I’ll spend some time discussing the impacts of the current energy system—the air pollution, water pollution, damage to ecosystems and other kinds of harm that are associated with activities like burning coal, pumping oil and mining uranium.


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