A Fresh Perspective on Energy
How Our Lifestyles Drive Demand… And What We Can Do About It

Wendell Cox
Principal, Demographia

As the global race for energy becomes more competitive, we need to broaden our understanding of the factors behind rising energy demand.

Americans rely on plentiful supplies of energy to fuel our prosperity and our high standard of living. In the face of high demand, the good news is that America has made tremendous strides in energy efficiency and conservation. Today, new technology allows us to use less energy, while providing the same level of energy power in our homes and at work. Still, efficiency and conservation alone will not solve the energy challenges we face. With every house, car and refrigerator that has become more energy efficient, Americans are purchasing larger energy-consuming homes and appliances and more hi-tech gadgets to maintain their quality of life.

Population and economic growth will continue to contribute to rising energy demand, both in the United States and abroad, especially in China and India. America's economy is growing and our country’s economic prosperity will be the key driver of future energy demand. Moreover, the strengthening economies of China, India and other developing nations are underpinning consumer trends similar to those in the United States, as those countries strive to achieve our living standards.

Population Growth

• By the year 2030, the United States will have 65 million more people – the equivalent of adding the entire population of France.^{5, 6} That is 65 million more Americans who will drive cars, own homes, have jobs and rely on energy in every aspect of their daily lives. 
   
• Nations like India and China will see enormous population growth over the next few decades. By 2030, India's population is expected to reach 1.5 billion people, surpassing China.⁷ 
   
• Other less developed nations, such as Indonesia, Nigeria, Vietnam and the Philippines will also see strong population growth through the year 2030.⁸ In nations like these, where billions aspire to higher standards of living, energy demand will remain high.

Economic Growth

• As the population rises in the United States, the labor force will expand, output will rise and productivity will grow. The United States' GDP is forecasted to grow 2.4 percent per year, putting an even greater strain on energy supplies.⁹
  
  
   
• On the other side of the globe, China's fast-growing economy has the nation on pace to become the world's largest energy consumer after 2010 – overtaking the United States in energy demand.¹⁰ Vietnam is another, lesser-known example of a growing economy. The country is just behind where China was 15 years ago with an average annual GDP growth of nearly 7 percent over the last ten years – more than double the United States' rate.^{11, 12}

Cultural and Social Trends

• As the United States' economy continues its expansion, purchases will increase, electronics use will rise and information technology use will grow exponentially. In fact, currently in the United States, the average person owns 25 consumer electronics.¹³ Furthermore, to fuel its presence online, Google has data centers the size of two football fields.¹⁴ 
   
• Consumer electronics in the United States used about 147 billion kilowatt-hours of electricity in 2006 – which was more electricity than produced by all of the windmills, solar panels and biomass-to-electricity plants in America that year.¹⁵ To put it in even greater context, in 2006, consumer electronics required nearly as much energy as the entire state of Pennsylvania, the country's sixth largest state.^{16, 17} 
   
• On the global front, China's economic growth allows residents to continue purchasing the luxuries they've lacked for many decades. For instance, the number of cars in China doubled between 2000 and 2006.¹⁸ Less than 25 years from now, China will have more cars than the United States and about as many miles of freeway.^{19, 20, 21}

These trends present us with staggering numbers: the Department of Energy (DOE) predicts that energy demand in the United States will rise 19 percent by 2030, and DOE and the International Energy Agency predicts that global demand will rise 45 percent in the same period.^{22, 23, 24, 25, 26} We also know from these organizations that fossil fuels will continue to meet 80 percent of our energy needs, both in the United States and abroad.²⁷

We often look at rising energy demand as a crisis, but it really means opportunity. Energy has made modern lifestyles possible, and it is the key to eradicating poverty around the world and maintaining upward economic growth.

We can moderate demand through efficiency and conservation, but as top energy policy organizations agree, that is not enough. Alternative sources of energy will play a role but alone cannot satisfy the demand.

Today, the challenge before America is the development of our energy here at home. In reality, energy supplies are plentiful, but access is limited.^{28, 29}

Population and economic growth, in concert with demographic and behavioral trends, lead to one conclusion – the world needs more energy, not less, to meet growing demand and sustain a healthy, vibrant future. As a nation, we need to support the production of all sources of energy, especially oil and natural gas, as well as the development of technology that improves efficiency and preserves the environment. America needs a realistic, long-term solution now.

¹United States Census Bureau, Annual Characteristics of Houses, (2007).
²International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 243.
³Steven Plotkin, "Is Bigger Better?" Environment, November 2004, Vol. 46 No. 99, with information from K. H. Hellman and R. M. Heavenrich, Light-Duty Automotive Technology and Fuel Economy Trends: 1975 Through 2004, EPA 420-S-04-002, (April 2004).
⁴"No New Coal," Environmental Science & Technology Online, (December 2007).
⁵United States Census Bureau, U.S. Population Projections, (2004).
⁶United Nations Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2006 Revision, (2007).
⁷International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 59, 464.
⁸United Nations World Population Database, (2006).
⁹Energy Information Administration, Annual Energy Outlook, (2008), 54.
¹⁰International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 283.
¹¹Estimated, using data from World Development Report, (1997), and Central Intelligence Agency, World Fact Book, (2008).
¹²International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 62.
¹³Consumer Electronics Association Release, CEA Finds American Adults Spend $1,200 Annually on Consumer Electronics Products, April 26, 2007.
¹⁴John Markoff and Saul Hansell, "Hiding in Plain Sight, Google Seeks More Power," New York Times, June 14, 2006.
¹⁵Calculated, using Kurt W. Roth and Kurtis McKenny,  "Energy Consumption by Consumer Electronics in U.S. Residences," TIAX LLC, (January 2007), 16, and Energy Information Administration, Annual Energy Outlook, (2008), 131.
¹⁶Energy Information Administration, State Electricity Sales, (2006).
¹⁷United States Census Bureau, U.S. Population Estimates, (2006).
¹⁸International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 300.
¹⁹International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 298.
²⁰United States Federal Highway Administration, Status of the Nation's Highways, Bridges, and Transit: 2004 Conditions and Performance, (2004).
²¹Demographia, China "7918" Motorway System (Freeway System): Summary, November, 28, 2006.
²²Energy Information Administration, Annual Energy Outlook: Overview, (2008), 4.
²³International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 80.
²⁴Energy Information Administration, International Energy Outlook, (2007), Table A2, 84.
²⁵Energy Information Administration, World Petroleum Consumption, Most Recent Annual Estimates, 1980-2006, February 11, 2008.
²⁶Energy Information Administration, World Dry Natural Gas Consumption, Most Recent Annual Estimates, 1980-2006, December 21, 2007.
²⁷International Energy Agency, World Energy Outlook 2007: China and India Insights, (2007), 74.
²⁸Energy Information Administration, International Energy Outlook, (2007), 36.
²⁹Energy Information Administration, United States Natural Gas Markets, (2001), Report #: SR-OIAF/2001-06.