When the economic brakes were slammed in the fall of 2008, energy consumption took a noticeable hit. In the United States especially, the effects were sudden and obvious. What record high oil prices couldn't accomplish, the credit crisis could: In September 2008, oil consumption in the U.S. fell 8 percent compared to the month before.
Data compiled by the Energy Information Agency, an arm of the U.S. Department of Energy, shows that some parts of the energy industry—and certain parts of the economy—were hit harder by the Great Recession than others.
For instance, the EIA breaks out electricity usage into four broad categories: residential, commercial, industrial, and transportation. Each category consumed less electricity in 2009 than in 2008, and less in 2008 than in 2007. (The current recession began in December 2007, according to the National Bureau of Economic Research, the group of economists who define the beginnings and ends of recessions. The NBER may announce that the recession ended some months ago.) But while the decline in residential electricity consumption was slight (about 2 percent, from 1.39 trillion kilowatt hours in 2007 to 1.36 trillion kilowatt hours in 2009) and almost imperceptible in the commercial area, industrial electricity consumption dove. From October 2008 to February 2009, industrial electricity use dropped 19 percent, as many factories idled, uncertain of their immediate prospects. From 2007 to 2009, industry shed some 14 percent of its electrical consumption.
By January of this year, industry finally posted a year-over-year gain in electricity use, which is a clear sign of economic recovery.
As the electric power industry came to grips with this decline in demand, clear patterns formed in which kinds of generating stations would be taken offline. Electricity from coal-fired power plants fell by more than 250 billion kilowatt hours between 2007 and 2009, a greater than 12 percent drop. Indeed, coal produced less electricity in 2009 than in any year since 1995.
Similarly, petroleum has also taken a hit as a power plant fuel, registering a 40 percent drop in two years. In remains to be seen whether fuel oil can stay competitive with spot petroleum prices above $70 a barrel.
Indeed, 2008 was the first year that wind turbines produced more power than oil-fired boilers. The amount of net generation from wind farms, as recorded by the EIA, doubled from 2007 to 2009. Although wind still provides a small share of total generation, it has grown past the "rounding error" stage and is now about one quarter the size of hydropower—and still increasing.
Other power sources, such as nuclear, biomass, and hydropower, seemed to more-or-less fluctuate without regard to the economy. And natural gas use, both in the electric sector and direct end use, seemed affected more by weather and supply considerations than the recession.
Internationally, the picture is also surprisingly mixed. Oil is the only fuel that the EIA has published up-to-date records, but it shows a global drop of two million barrels a day, from 86 million in 2007 to 84 million in 2009. That entire 2 million-barrel decline can be accounted for by the U.S., which went from using 20.7 million barrels a day in 2007 to 18.7 million in 2009—a nearly 10 percent drop. Japan's decline was even more severe, a 13 percent fall.
On the other hand, Germany and South Korea saw no substantial fall-off from 2007 to 2009. And the world beyond the large industrialized nations of the Organization for Economic Cooperation and Development increased oil consumption by more than 4 percent.
With the world economy poised to begin a period of uncertain growth, it will be enlightening to see if the sectors and nations that took the hardest hits will make the largest rebounds. If not, people will be feeling the effects of the Great Recession for years to come.