Our Work

Pennsylvania Produces 1.5% of All World Energy

• October 9, 2024
• Ed Gresser

TRADE FACT OF THE WEEK: Pennsylvania produces 1.5% of all world energy.

THE NUMBERS: World energy production, 2022, in BTUs* – 

* Energy Information Administration. A “BTU” (British Thermal Unit) is the amount of energy needed to raise the temperature of a pound of water by one degree Fahrenheit.

WHAT THEY MEAN:

From the “oil shocks” of the 1970s until recently, energy policy arguments featured mostly moaning, grim charts illustrating the consequences of “energy dependence” on unstable parts of the world, and predictions that things would get worse.  Here’s what’s actually happened, using the year 2003 — 20 years ago — as a point of departure:

Starting point: According to the Energy Information Administration (the Department of Energy’s data and research arm), in 2003, Americans produced 67.3 quadrillion “BTUs” worth of energy, and used 95.8 quadrillion BTUs. This meant Americans bought, on net, about 28.5 quadrillion BTUs from foreigners, mostly in the form of crude oil.  The resulting economy (a) employed 130 million people, (b) produced $11.7 trillion worth of farm products, manufactured goods, movies, government programs, and other goods and services (which, converted to the Bureau of Economic Analysis’ “constant 2017 dollar” figures to allow for meaningful comparisons with today’s economy, would be $14.9 trillion), and (c) released 5.7 billion tons of carbon dioxide.

Since then, two big changes in the energy figures:

More production: Scarcity and price instability produced curiosity about whether we might find more at home.  With heavy deployment of solar panels and wind turbines, drilling for natural gas, and so forth, the BTU count of domestically produced energy has grown from 67.3 quadrillion in 2003 to 91.9 quadrillion in 2020, and 102.8 quadrillion in 2023.  In other words, domestic energy production has jumped by 40% since 2003, and by 10% since 2020.  According to the Bureau of Economic Analysis, Pennsylvania — the site of the world’s first oil well in 1859 — has seen energy income rise like this:

More Efficiency: Likewise, scarcity and price instability produce caution, efficiency, and savings.  As America’s energy production has grown, use has dropped from 95.8 quadrillion BTUs in 2003 to 93.6 quadrillion in 2023. To put this 2.2 quadrillion BTU drop in perspective, total annual energy “consumption” figures are 10.8 quadrillion BTUs in Brazil, 1.6 quadrillion in Sweden, and 4.9 quadrillion in Taiwan. Carbon dioxide emissions, meanwhile, have dropped by about 25%, from 6 billion tons a year in the mid-2000s to 4.5 billion as of 2023.

Endpoint: As of 2023, the $28 trillion U.S. economy – $22.7 trillion in BEA’s constant 2017 dollars — employed 156 million people. Converting all this into BEA’s inflation-adjusted “constant 2017 dollars,” the 2% decline in energy use, and the accompanying 25% drop in carbon dioxide emissions, have accompanied the following big-picture changes:

With respect to trade, meanwhile, the “dependence” of the 1970s through 2000s has not totally vanished — Americans still buy lots of crude oil from the Middle East, lots of solar panels from Southeast Asia, and lots of electricity from Canada.  But fundamentally, the world depends on the U.S. to sell energy, not the other way around.  Trade balance data, converted into BTUs, look like this:

Year    US Trade Balance (BTUs)
2023      +9.2 quadrillion BTUs
2020      +3.5 quadrillion BTUs
2010    -21.7 quadrillion BTUs
2000    -24.9 quadrillion BTUs
1980    -12.1 quadrillion BTUs

What can we expect next? Energy trading will likely change sharply in the next decade, as fossil fuel use falls and countries rely more frequently on materials and machines used to generate and convert electricity, and thus use electricity in ways that look like “stocks” than “flows.” Neither renewable technologies like wind turbines nor electrified end-use technologies like heat pumps and batteries, for example, use fuels to operate. So perhaps “trade” will include fewer BTUs overall, and more materials and machines used to generate and convert electricity.  Having surprised everyone by evolving into the world’s top source of energy since 2003, the U.S. now likely needs more powerful domestic clean energy supply chains to stay in the role.

* The “British Thermal Unit,” like the 159-liter/42-gallon “barrel ” of oil, is a defiantly non-metric energy unit.  The BTU and the annual amount of dollar-trading on forex exchanges are the only indexes of human activity measured in quadrillions, and BTUs will likely soon hit the 1 quintillion — 1,000,000,000,000,000,000 — plane. As a comparison, the mass of the moon is about 78 quintillion tons.

FURTHER READING

PPI’s Elan Sykes and Paul Bledsoe on energy and the next American economy.

Gov. Josh Shapiro’s Pennsylvania energy strategy.

Data & rankings

The Energy Information Administration has the basic BTU-as-trade data … and ranks energy output by country.

Note on this: China is the world’s top energy producer, but rankings look different depending on the type.  Of China’s 138 quadrillion BTUs, 106 quadrillion come from coal.  India is the No. 2 coal producer at 17 quadrillion BTU, and Indonesia is third at 12 quadrillion; together with China, this is 80% of world energy from coal. The U.S. however edges China by 15 quadrillion to 14 quadrillion in “nuclear, renewables, and other”; the U.S. is also first in both natural gas at 37 quadrillion BTU (above Russia’s 23 quadrillion and Iran’s 10 quadrillion), and petroleum at 32 quadrillion as against Saudi Arabia’s 25 and Russia’s 23.

… EIA defines the “British Thermal Unit”.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.