ECONOMIC REPORT OF THE PRESIDENT

Petroleum consumption was 2 percent lower in 2015 than it was in
2008 (EIA 2016b), while the economy grew more than 10 percent over this
same period. In fact, petroleum consumption peaked in 2004, and the subsequent
decline over the next several years surprised many analysts (Figure
7-10). The actual consumption of oil in 2015 was more than 25 percent
below EIA projections made in 2003 for consumption that year. Moreover,
the surprising decline in consumption relative to past projections is expected
to grow over the next decade to 34 percent in 2025 (Figure 7-11). This trend
through 2014 was primarily attributed to a population that was driving less
and to rising fuel economy in the light-duty fleet.27
With this petroleum consumption surprise, the energy intensity in the
transportation sector has declined beyond that which was projected by EIA
in 2003, as seen in Figure 7-12.
In contrast, the residential sector showed less of a decline in energy
intensity than was projected by EIA in 2003, and even than in some later
projections (Figure 7-13). The actual residential energy intensity did decline
substantially—likely due in part to energy efficiency standards—but sits
above the level that was projected in most prior years for 2015. This greaterthan-expected
energy intensity in the residential sector may be due to factors
such as new electronic appliances being plugged in, a slow-down of replacement
of older appliances after the economic recession began in 2008, or a
shift in preference for house size or energy consumption at home.
Energy intensity in the electric power and commercial sectors (Figures
14a and 14c, respectively) in 2015 tracked quite closely to prior projections.
Actual 2015 energy intensity in the industrial sector (Figure 7-14b)
was below what would have been predicted in 2003, though closer to later
predictions.
Declining Carbon Intensity
While the energy intensity of the economy has continued a relatively
steady downward trend, carbon intensity—carbon emissions per unit of
energy consumed—has had a much more dramatic shift, relative to projections,
in the past decade. Projections made in 2008 and in prior years showed
carbon intensity holding relatively steady. However, since 2008, carbon
intensity has fallen substantially and continues to fall—leading to revised
projections nearly every single year. Figure 7-15a shows the observed carbon
27 See CEA (2015b) for a more detailed analysis. In 2015-16, low gasoline prices have led to
significant increases in vehicle miles travelled (VMT); VMT reached a 6-month record high in
the first half of 2016. Since low oil (and thus low gasoline) prices are expected to continue at
least through the end of 2016 (EIA 2016), the upward trend observed in 2015 may continue in
2016.
Addressing Climate Change | 455