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Real Energy Efficiency

To get an accurate picture of "energy efficiency," consumers must look beyond the efficiency of the appliance or furnace, and consider what it takes to get energy into the home. Significant amounts of energy are used or lost along the "energy trajectory,"' that is, in the extraction, processing, transportation, conversion and distribution of energy. A more efficient energy trajectory translates into less total energy production required. The energy trajectory and end-use efficiency must both be considered to calculate the energy’s full-cycle efficiency.

   Extract  Process  Transport  Convert  Distribute Total
Natural Gas 96.8 97.6 97.3 - 98.4 90.5
Electricity: Coal-Based 99.4 90.0 97.5 33.4 92.0 26.8
Electricity: Oil-Based 96.8 90.2 98.4 32.5 92.0 25.7
Electricity: Natural Gas-Based 96.8 97.6 97.3 31.8 92.0 26.9


The cumulative energy efficiency of the natural gas trajectory is approximately 90 percent. This means that for every 100 units of energy produced, 90 units of energy is delivered to the consumer. Electricity is only about 27 percent efficient. That is, only about 27 units of energy is delivered to the consumer for the same 100 units of energy input.

In terms of full-cycle efficiency (the combined efficiency of the energy trajectory and the efficiency of the end-use equipment) natural gas retains its superiority. For new residential applications, full-cycle efficiencies will range from 71 to 88 percent for natural gas space heating - depending on the efficiency of the end-use equipment chosen. For electric heat pumps, the full-cycle efficiency range will be from 53 to 72 percent. Less efficient electric resistance heating has a full-cycle heating efficiency of only 27 percent.

The superiority of natural gas, in terms of cumulative energy trajectory efficiency, more than offsets the often higher end-use efficiency of comparable electric equipment. The point of greatest inefficiency along the energy trajectory is at the generating plant, where roughly two-thirds of the input energy is lost as heat in production of steam to turn large turbine/generators. Additionally, approximately 8 percent of the electricity generated does not reach the ultimate consumer due to transmission line losses. Therefore, even if electricity is three times as efficient as natural gas in a particular end-use application, the total energy required for the gas option is less.

  • Real Energy Efficiency examines the end use of energy plus obtaining, processing, generating and delivering energy.
  • When natural gas is delivered directly to the consumer, 90 percent of the original energy reaches the consumer.
  • When natural gas is used to generate electricity, approximately 73 percent of the energy is lost before it reaches the consumer, resulting in inefficient energy consumption and upward pressure on the price of natural gas.
  • 100 percent efficient electric heating appliances are really only 27 percent efficient.


"From a chemist's point of view, it's almost a shame to use so much of a unique and valuable compound to make electricity - which can be made in so many ways. Someone once said that using natural gas to make base-load electricity is like using good Scotch to wash the dishes."

--Samuel Bodman, U.S. Energy Secretary, 2005


  • Most of the growth in natural gas demand comes from electricity generators, who have turned to natural gas because it is the cleanest burning, most economical fossil fuel.
  • Rather than burn natural gas to create electricity used for space and water heating, natural gas can heat homes and water directly. Greater "direct use of natural gas" is more efficient, can reduce demand for dwindling electric supplies and can better sustain valuable North American natural gas resources.
  • Natural gas is a domestic energy source. Approximately 86 percent of the natural gas consumed in the United States is produced domestically with 12 percent coming from neighboring Canada.
  • The "direct use of natural gas" in gas appliances helps reduce reliance on foreign oil imports and can help delay the need for new electric generating plants.
  • Given the comparative energy losses, most energy experts believe the best strategy is to use natural gas for space and water heating as much as possible.