BOX 3.1
The U.S. Energy System

The U.S. energy system includes a vast and complex set of interlocking technologies for the production, distribution, and use of fuels and electricity.a This includes technologies that convert primary energy resources (e.g., nuclear energy, renewable sources such as solar and wind, and the fossil fuels coal, oil, and natural gas) into useful forms such as gasoline and electricity; technologies that transmit this energy to consumers (e.g., electrical transmission and distribution systems, gas pipelines); technologies that store or utilize this energy (e.g., batteries, motors, lights, home appliances); and associated demand-side technologies that control energy use (e.g., advanced electricity metering systems). Another key component of this system is the people that use the energy—their behaviors and preferences play a major role in shaping energy technologies.

Currently, the United States relies on carbon-based fossil fuels for more than 85 percent of its energy needs. This dependence evolved not only because fossil fuels were available at low market costs but also because their physical and chemical properties are well suited to particular uses: petroleum for transportation; natural gas as an industrial feedstock, for residential and commercial space heating, and more recently as a fuel for electric power generation; and coal for the generation of electricity and as a feedstock for some industrial processes. Indeed, almost all consumer-based, industrial, and governmental activities require the consumption of fossil fuels, either directly or indirectly.

Absent strong and sustained policy intervention, fossil fuels are projected to remain the nation’s primary source of energy for the foreseeable future. Compared with alternative sources of energy, fossil fuels would likely remain relatively inexpensive to produce, and they would continue to benefit from past investments in vast existing infrastructure—investments that would need to be duplicated (in whole or in part) to enable wide-scale displacement by alternative energy sources. The nation’s reliance on carbon-based fossil fuels would only be significantly reduced in the near-term if the prices of those fuels were increased to reflect the full social costs of their extraction, transformation, distribution, and use; and only if there are incentives to encourage research and development aimed at reducing the cost and promoting the commercialization of alternative energy sources.


a The material in this box was adapted from NRC, America’s Energy Future: Technology and Transformation: Summary Edition (Washington, D.C.: National Academies Press, 2009).

individuals and organizations that are heavily invested in carbon-intensive industries may prefer to face the risks of climate change impacts rather than face the potential costs of policies to limit GHG emissions. Decision makers will thus inevitably face some difficult choices and trade-offs in seeking to protect the interests of different constituencies.

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