Energy Supply and the Individual States

The February issue of Monthly, Energy Supply and the Individual States, has now been published. The 22 page report is a more data-filled version of the thematic treatment I’ve given to this issue the past month, here at While many news organizations and investment houses have started to address more concertedly the financial woes of the US States (comparing them by scale to similar pressures in Europe) I have made an effort to add the energy component to the problem of debt and revenue collapses now facing such states as California, Illinois, and Florida.

While it’s true that states like Wyoming, New Mexico, North Dakota, and Colorado produce more total energy than they consume, what’s less understood is the rather amplified effect this can have when comparing these states to heavy energy importers such as California which consumes 3 times as much energy as it produces, or Florida, which consumes 8 times its energy production. California’s oil production for example at 600 kbpd (thousand barrels per day) is a nice resource to have when oil rises. But it’s not nearly as nice as Colorado’s natural gas production. Yes, Colorado uses more oil than it produces to run its vehicles, but it only uses 40% of its natural gas production. The rest is sold. And despite budgetary woes appropriately scaled to the Rocky Mountain state, the difference in unemployment, debt, and cash flow is reflective of Colorado’s energy surplus.

Pulling together state by state energy data can be work. I found I not only had to blend EIA Washington data with state data, but I had to find a common unit of account to make comparisons, and chose BTU. One chart of several I’d like to display from my February report is: California: Oil Production vs. Total Gasoline Use in Trillion BTU ’81-’07.

California’s oil production peaked in 1985, but exclusive of all other uses for oil–jet fuel, bunker fuel, diesel, chemicals production–the state known for its massive highway system was actually producing enough oil as late as 1998 to cover its gasoline consumption. (The more comprehensive chart pitting oil production vs total oil use for California looks considerably worse, of course. To ease the pain of the data, I chose “California Poppy” color to track the gasoline use data. How do you like it?).

When oil and natural gas prices rise, states like Colorado see a cascade of earnings, revenues, and royalties flow into their state. Whereas states like California see a cascade of capital flow out of state. It’s really not very complicated. What’s helpful in these examples of course is that it makes plain the position of the United States as a whole, whose energy balance is unfortunately not like Colorado’s, but more like California’s.