As energy companies and governments…
The International Monetary Fund's prediction…
Before the pandemic, direct U.S. energy expenditures by consumers were rising because of increased energy use and higher energy prices, the EIA said on Thursday.
Between 2016 and 2018, when oil prices were rising after the previous oil price crash of 2014/2015, U.S. energy expenditures jumped by nearly US$200 billion, representing a 17-percent increase in real terms. Energy consumption and energy prices rose faster than the U.S. population and gross domestic product (GDP) during that period, the EIA said.
In 2018, energy expenditures increased for a second consecutive year to US$1.3 trillion.
U.S. energy expenditures per capita—the amount of money spent on all energy used in businesses, offices, homes, industrial facilities, and vehicles—increased 16 percent between 2016 and 2018, to US$3,891 per person in 2018, from US$3,215 per person in 2016, the lowest value of energy expenditures since 2002.
During the 2016-2018 period, the share of U.S. energy expenditures per GDP—the amount of money spent on energy versus the value of all goods and services in the entire U.S. economy—rose by 11 percent. All states saw increased energy expenditure between 2016 and 2018, when energy expenditures per capita and energy expenditures as a percentage of GDP also grew, according to EIA’s estimates.
Unsurprisingly, the biggest expenditure on energy products was on petroleum products, whose value accounted for 58 percent of U.S. energy expenditures in 2018. Petroleum products include motor gasoline, diesel, jet fuel, and hydrocarbon gas liquids.
Texas has been the state with the most petroleum expenditures every year since 1979, accounting for nearly 15 percent – or US$108 billion – of the nation’s total petroleum expenditures in 2018.
Among sectors, transportation was the largest expenditure, representing 47 percent of total U.S. sector energy expenditures in 2018, the EIA said.
This year, reduced economic activity and decreased mobility due to the pandemic, as well as the low oil prices, will result in lower consumer expenditures on energy. U.S. gasoline demand had materially improved from the April lows until June, but after that, it has been stuck at 90 percent of last year’s demand numbers.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com