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8. What Would Happen to U.S. Energy
Intensity If All States Replicated the
Top-Ranked or Bottom-Ranked States?
In this report, we showed that over the past couple of decades there has been
substantial variation in energy intensity trends across the 48 contiguous states
and among states within the four energy-consuming sectors. We have also
highlighted the various factors that have affected the level of changes in energy
intensity over the study period. An understanding of why some states have
reduced their energy intensity significantly more than all states on average
provides a basis for further study on how energy intensity might be reduced
nationwide. This analysis is the first in a series of analyses that the DOE could
pursue that will shed some light on the role that state programs and policies play
in reducing energy intensity.
With that in mind, this chapter asks the question, what would be the nationwide
impact on energy intensity, hypothetically, if (1) all states were able to replicate
the energy intensity reductions of the states with the greatest reductions in residuals
since 1988, and if (2) all states produced energy intensity changes at the same
average rate as the states with the highest residuals since 1988? In other words, if,
over the next 20 years, every state reduced its energy intensity, beyond what the
factors we discuss in this report would predict, to the same degree as the states
with the greatest reductions in residuals since 1988, what would U.S. energy
intensity look like by the year 2020? And alternatively, if, over the next 20 years,
every state changed its energy intensity beyond what the factors would predict to
the same degree as the states with the highest residuals since 1988, what would
happen to U.S. energy intensity by 2020?
Figure 8.1 illustrates some estimates of hypothetical energy intensity trends if all
U.S. states had energy intensity reductions from 2000 to 2020 on a par with the
five states with the largest negative energy intensity changes and the five states
with the largest positive energy intensity changes (see Appendix D for complete
state rankings). The solid line in the figure represents the Energy Information
Administration (EIA) forecast of an approximate 1.5 percent reduction in energy
intensity per year (EIA, 2000). The range below the EIA line in the figure
represents a potential reduction in energy intensity. This range is based on our
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Energy use per dollar of GDP (index 1970 = 1.0)
RAND MR1616-8.1
1.0
Predicted reduction in energy
intensity if all states had same
residuals as the bottom five
states since 1990
0.8
0.6
EIA estimates
0.4
Predicted reduction in
energy intensity if all states
had same residuals as the
top five states since 1990
0.2
0
1970
1990
2000
2010
2020
Figure 8.1—Potential Energy Intensity Reductions If All States Replicated the
Residuals Performance of the Top- and Bottom-Ranked States
calculations on the potential impact of achieving the same unexplained
reductions in energy intensity as those experienced by the five states that had the
greatest unexplained reductions in energy intensity over the period of analysis.
Some of this unexplained decline in energy intensity might have been due to
energy efficiency policies adopted by these states. The bottom line is based on
assumptions from EIA forecasts and estimates of potential reductions in energy
intensity based on the equations shown in Appendix A. This estimated energy
intensity is then modified using those equations by applying the same residual
effects produced by the top 5 states that had the largest residuals to the other 43
states.1
If the experience of the top states is replicable in the other states, and the
forecasted parameters turn out to be correct, the United States might be able to
reduce its energy intensity overall by more than 3 percent per year. On the flip
side, the top line on the graph uses the same basis for the calculation as the
bottom line but instead assumes that all states would have the same residual as
the states with the largest residuals through 2020. In this case, energy intensity
would decline by only about 0.5 percent per year through 2020.
________________
1Details of the calculation and sector-by-sector estimates are in Appendix C.
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We are not suggesting that these percentage reductions should be used as targets
for the United States as a whole, but these numbers do provide some bounds for
possible outcomes and might hint at what could be achievable if the energy
intensity reductions experienced by the top states are due to state programs and
activities that could be replicated across the nation. The estimate shown by the
bottom line in the figure could represent a lower bound for potential
improvements in energy intensity. Clearly, the trends illustrated in Figure 8.1
should be interpreted with caution, for a number of reasons:
•
Certain differences among the states may make it difficult if not impossible
for the other 43 states to replicate the performance of the top 5 states.
•
Just because a state program is successful does not necessarily mean that it is
replicable.
•
Although we are producing forecasts that focus on the residuals, assuming
that they are primarily due to state actions, energy intensity changes are also
due to the factors and common effects that we discuss in this report, and not
just state policy.