Energy expenditures fall for fifth consecutive year

by Talk Business & Politics staff ( 75 views 

U.S. energy expenditures declined for the fifth consecutive year and fell 9% to $1 trillion in 2016, from 2015, according to the U.S. Energy Information Administration. In 2016, total energy expenditures, adjusted for inflation, were the lowest since 2003. And, expressed as a percent of gross domestic product (GDP), the expenditures were 5.6% in 2016, the lowest since at least 1970.

GDP is the total value of goods and services produced in the United States, including energy, and it increased 1.5% to $18.6 trillion in 2016, from 2015. The U.S. GDP has increased annually since 2010, while U.S. total energy expenditures, which is the amount of money spent to consume energy in the United States, has fallen annually since 2011.

In 2016, the decline in total U.S. energy expenditures can be attributed to lower energy prices as total energy consumption has been flat since 2013. In 2016, the U.S. average energy price fell 9% to $15.92 per million British thermal units (Btu), from 2015, and it was at the lowest level since 2003. Average energy prices reached a high point in 2008, when they were an average of $24.13 per million Btu.

The downward energy price trend is not expected to continue, according to the EIA. Since 2016, average energy prices of products such as motor gasoline, natural gas and retail electricity have risen and have contributed to higher U.S. energy expenditures.

Total energy price is the consumption-weighted average prices of energy sources consumed in the following four sectors: transportation, industrial, residential and commercial. The transportation and industrial sectors are the two largest consuming sectors and consume the most petroleum products in the United States. As a result, U.S. energy expenditures are significantly influenced by the prices of petroleum products, including motor gasoline, distillate fuel oil and hydrocarbon gas liquids. In 2016, electricity expenditures accounted for 74% of residential expenditures, 80% of commercial expenditures and 37% of industrial expenditures.

Louisiana had the highest expenditures per GDP of any state with 11.1% in 2016. The District of Columbia had the lowest expenditures per GDP at 1.6%.