EIA says 2016 U.S. energy expenditures declined to lowest share of GDP since 1970

According to the most recent data released by the U.S. Energy Information Administration, in 2016, U.S. energy expenditures declined for the fifth consecutive year, reaching $1.0 trillion in 2016. This represents a 9% decrease in real terms from 2015.

Adjusted for inflation, total energy expenditures in 2016 were the lowest since 2003. Expressed as a percent of gross domestic product (GDP), total energy expenditures were 5.6% in 2016, the lowest share of GDP since at least 1970. According to EIA, contributing factors include steady annual increases in GDP since 2010, coupled with steady annual decreases in total energy expenditures since 2011.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"

Meanwhile, annual total U.S. energy consumption has remained virtually flat since 2013. So the recent decreases in total energy expenditures are generally the result of lower energy prices. But EIA says it doesn’t expect this trend to continue, as average energy prices of products such as motor gasoline, natural gas, and retail electricity have all increased since 2016.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"

EIA also notes significant geographic variation in state total energy expenditures as a percent of state GDP. In 2016, Louisiana led the pack as it has every year since EIA started tracking this metric in 1997, with 2016 energy expenditures per GDP of 11.1% in 2016. EIA points to Louisiana’s large industrial sector consumption, including its energy-intensive petrochemical industry, as the biggest piece of the explanation.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"

But even while leading the nation, Louisiana set its own record-low ratio of energy expenditures per GDP, at a level that was less than half of the state’s previous high (26.5%) which was reached in 2008. Meanwhile, District of Columbia (1.6%), New York (3.3%), Massachusetts (4.3%), California (4.3%), and Delaware (4.4%) had the lowest energy expenditures per GDP in 2016. EIA says this reflects relatively high consumption in less energy-intensive residential and commercial sectors as well as relatively high state GDP.