Reduced Energy Intensity Reduces Risk

By Ryan Boyle

Every employee has heard calls to be more efficient: "Work smarter, not harder." "Do more with less." "Don't reinvent the wheel." These platitudes are not only applicable at the micro level: the modern economy has continually become more efficient. Our use of energy tells the story clearly, and serves as a source of resilience during today's supply disruptions.

Energy intensity measures how much energy is needed for economic output. At the national level, intensity is the ratio of a country's energy consumption to its gross domestic product (GDP). A lower number means the economy is squeezing more value from its kinetic inputs. Though intensities are not uniform across the world, the metric is improving in most markets.

The industrial sector represents the largest share of energy consumption. Economies of usage have advanced steadily, and as they compound upon themselves, gains are greater. Engineers look to efficiency as the "first fuel:" the most valuable input is the energy that isn't used. Factories have been retrofit with more efficient equipment as their tooling reaches its end of life, while newer facilities use the very latest technology.