The most exciting phrase to hear in science, the one that heralds new discoveries, is not Eureka! (I found it!) but rather, "hmm.... that's funny...." Isaac Asimov

Sunday, April 20, 2014

Fuel Cost as a Percentage of Gross Domestic Product: 2013 Update

This is an update of a chart in earlier posts.  It is clear that the U.S. economy still faces the drag of significant energy cost, with about 5% of GDP spent on fossil fuels.  In earlier periods of prosperity, fuel cost was consistently well below four percent.  It is likely that this continued high cost has a lot to do with the current economic doldrums; money spent for energy cannot be spent on other things.  Petroleum is by far the largest contributor to the total cost of fuels.  Despite recent increases in U.S. production, the cost per barrel remains in the range of $100, far above historical levels, indicating that the global supply of petroleum is not meeting the full breadth of demand.   Coal and gas have significantly lower cost per energy unit.  The two together contributed, in 2012, about 43% of the U.S. energy use total, while their combined cost as a percent of GDP is less than one percent. Nuclear power is by far the cheapest on a fuel cost basis; it provides about 8% of U.S. energy use, but its fuel cost is only about 0.02% of GDP.  (Solar, wind, hydro, and geothermal, which have no fuel cost as such, contributed about 0.2%, 1.4%, 2.7%, and 0.2% respectively in 2012.  Biomass, which is primarily wood, contributed about 4.3%.  Fuel cost is not the only cost of an energy source; there are construction, maintenance, and infrastructure costs as well.) 

 Notes

  (1) Petroleum cost data have been revised slightly for the years 1995 through 2013.  The cost now represents what EIA terms "Refiner Average Acquisition Cost."  This has been over $100 per barrel since 2011. 
   

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