Economy, Energy, Environment, Issues

Drop in industrial electricity consumption tells the tale of the no-growth U.S. economy

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By Robert Romano

us and chinese energy consumptionIf electricity consumption is supposed to be a reliable proxy for economic growth, the only conclusion one can come to is that the U.S. economy has not grown in any meaningful sense since 2007.

That year, the U.S. consumed about 3.89 trillion kilowatt hours of electricity. It dipped to a low of 3.72 trillion kilowatt hours in 2009 after the financial crisis and now stands at 3.86 trillion kilowatt hours in 2014, according to data compiled by the U.S. Energy Information Administration.

The U.S. is using no more electricity now than in 2007, even though the working age population has expanded by 16 million during that time.

To be sure, residential and commercial electricity consumption have increased slightly from 2.72 trillion kilowatts since 2007 to a combined 2.75 trillion kilowatt hours. The problem is this has been more than offset by a dramatic 7 percent drop in industrial electricity consumption — from 1.03 trillion kilowatt hours in 2007 to 955.5 billion kilowatt hours in 2014 as some production has been moved overseas or just ceased.

This has been a death knell to the U.S. economy. To the extent we’re seeing any growth, it is based entirely off of gains in the working age population, the rate of which has been slowing dramatically since the baby boom ended. In the meantime, the U.S. has been deindustrializing.

In China, by contrast, the economy has expanded dramatically since 2000, and so has its electricity consumption. While many economists tend to doubt China’s published GDP as propaganda — it has averaged 9.72 percent since 2000 — more reliability is pegged to its rate of electricity consumption.

And, well, the electricity consumption rate shows a dramatic expansion has taken place in China, no question, based on a rapid increase in industrial production. But it slowed in 2014, along with its economy. Now, China is experiencing a massive correction.

So, why has industrial electricity consumption in the U.S. dropped off so much? Much of it can be attributed to the recession, since industrial consumption bottomed out in 2009 at 917 billion kilowatt hours. By 2011, industrial electricity consumption had recovered some to 991 billion kilowatt hours, but has been dropping ever since.

That might be thanks to the increased costs of doing business in the U.S. due to the Obama Administration’s war on coal, which has reduced the usage of the cheap, reliable energy source.

But for those additional costs, the U.S. economy might have experienced a more robust recovery.

The result is that during the period from 2006 to 2014 – with its 1.29 percent average annual growth rate – we’ve seen the slowest economy since 1930 to 1939, when it averaged 1.33 percent growth a year. This could end up being the worst decade of growth since the GDP was invented in 1934. Even worse than the Great Depression.

And Obama’s Environmental Protection Agency is guaranteeing it. At exactly the time the U.S. needed to increase production in the industrial sector to get its economy back on track after the financial crisis, the EPA was there to make sure it never got moving again.

This guest post is by Robert Romano, senior editor of Americans for Limited Government.

 

  • Gea

    This article supports fossils merchants by scaring Americans about using of renewable rather then grid electricity and large power plants mostly burning fossil fuels, from coal, gas, oil and nuclear.

    This drop in electricity may be a sign that many companies had installed large solar power plants on areas around of their production facilities, thus do not need to purchase electricity from fossil burning power plants, the same way many homeowners had installed solar panels and get free electricity,as sun shines and wind blows for free.

    China had become the number one CO2 emitter as they had taken over dirty industrial production from USA…and is now terribly polluted as Chinese cannot breathe the air, drink their water and grow healthy vegetables in contaminated soil.

    Lets get away from fossil fuels by individual industries and individuals and neighborhoods harvest renewable energy at the sites of use. NO NEED tor grid generated electricity…and large power plants.

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