Energy Industry Spotlight

The Energy Industry in the United States

Overview

The United States is a leader in the production and supply of energy, and is one of the world’s largest energy consumers. U.S. energy companies produce oil, natural gas, coal, renewable fuels, as well as electricity from clean energy sources such as wind, solar, and nuclear power. U.S. energy companies further transmit, distribute, and store energy through complex infrastructure networks that are supported by emerging products and services such as smart grid technologies. Growing consumer demand and world class innovation – combined with a competitive workforce and supply chain capable of building, installing, and servicing all energy technologies – make the United States one of the world’s most attractive markets with total investment in the U.S. energy sector at $276 billion in 2016 (the second-largest in the world).

Industry Subsectors

Renewable Energy: The United States is home to a thriving renewable energy industry, with globally competitive firms in all technology subsectors, including the wind, solar, geothermal, hydropower, biomass, and biofuels sectors. Today, the United States produces more geothermal energy than any other country (2.5 GW); has the second-largest bioenergy industry (13.2 GW); the second-largest wind industry (87.5 GW); the third-largest hydropower industry (102.1 GW); and the third-largest solar industry (42.9 GW). The International Renewable Energy Agency (IRENA) projects that by 2030, the share of renewables in the total U.S. energy mix could reach 27 percent (including almost 50 percent of electricity generation). This would mean an increase from 134 GW of renewable energy in 2010 to over 700 GW in just two decades. Even with less optimistic scenarios, the capacity is expected to double by 2030. On this trajectory, the United States already had the second-highest new investment in the world in 2017, with nearly 21 GW of added renewable energy capacity. In May 2018, EY ranked the United States as the second most attractive country for renewable energy investment.

Energy Efficiency: The market for achieving greater energy efficiency in the United States is large and growing. The American Council for an Energy-Efficient Economy (ACEEE) estimates that $60 to $115 billion was invested in 2016 on energy efficiency in the United States. Existing policies, such as Federal appliance standards, along with other Federal and State policies, and market forces are drivers of energy efficiency in the United States.

Renewable Fuels: With access to abundant natural resources, the pellet and ethanol industries are also increasing their capacity – particularly to serve overseas markets. America’s ethanol industry is the largest and most efficient in the world, incorporating technological innovations to produce over 15 billion gallons of ethanol annually. In addition, the industry is expanding to new markets. In 2017, the U.S. ethanol industry exported an estimated 1.4 billion gallons of ethanol–around 9 percent of its total production–to markets around the world. Investment opportunities also exist for the development of advanced biofuels utilizing new technologies and feedstocks, particularly in the aviation sector. U.S. wood pellet manufacturers can now produce over 13 million metric tons of pellets annually. Much of the production has been added in recent years to export to Europe. In 2017, over 5 million metric tons were exported and new pellet mills have been brought online to meet the growing demand.

Smart Grid and Battery Storage: The United States is an international leader in the development and deployment of smart grid technologies and services. The smart grid is a modernized electricity transmission and distribution network that includes two-way communication systems and enables the integration of technologies that will modernize the grid to improve its efficiency, reliability, sustainability, and security. The term “smart grid industry” is used interchangeably with other industry nomenclature (e.g., grid modernization) to describe the ecosystem of goods, services, and technologies that support the transmission, distribution, and storage of electricity. According to the U.S. Department of Energy's Global Energy Storage Database, the United States accounts for more than 40 percent of the total global capacity for electrochemical (battery) energy storage. Among transmission expenditures alone, the Federal Energy Regulatory Commission data notes that investments reach $35 billion in 2016. Additionally, accordingly to Bloomberg New Energy Finance, the United States led all global investors in the deployment of advanced technologies, so-called “energy smart technologies,” with an investment total of $14.4 billion in 2017.

Energy, environmental, and security needs for the 21st century have accelerated both public and private sector investments in grid modernization and smart grid technologies across the United States. Increased investment in U.S. grid modernization includes reliability enhancement, renewable resources integration, demand shifts, and market reforms that create more options for independent generators and require new connections to transmission systems. For example, according the Edison Electric Institute, U.S. investor-owned electric utilities are projected to invest $84 billion in transmission systems from 2016 to 2019. In 2016, Bloomberg New Energy Finance reports that the United States was the leading global investor in ICT-enabled grid modernization with more than $10.6 billion of investment. This reflects a 14 percent compound annual growth rate over the last decade.

Oil and Gas: The United States has been the world's top producer of natural gas since 2009 and the world's top producer of petroleum hydrocarbons since 2013. The United States remains a major source of growth in oil and gas exploration and development, especially in shale and ultra deep-water resources, and U.S. petroleum and natural gas production has increased by nearly 60 percent since 2008. U.S. companies have developed advanced and cost-competitive techniques for extracting hydrocarbons from shale and hard to reach offshore oil and gas deposits, altering the U.S. oil and gas sector and the domestic energy landscape. These techniques have allowed many U.S. producers to remain competitive even during times of low international crude oil and natural gas prices. U.S. tight oil production increased in 2017, accounting for 54 percent of total U.S. crude oil production, in part because of the increasing productivity of new wells.  

The export of crude oil and liquefied natural gas (LNG) has made the U.S. sectors even more competitive. U.S.-produced crude oil can reach global markets and compete with other major oil exporting countries. U.S. companies began exporting LNG from the lower-48 states for the first time in 2016, sending shipments to major markets around the world.  In 2017, the United States exported more natural gas than it imported, marking the first time since 1957 that the country has been a net natural gas exporter. 

Coal: The United States holds the world’s largest estimated recoverable reserves of coal. In 2017, coal was used to generate 31 percent of the electricity in the United States. After several years of declines, coal production and employment increased in 2017, driven in part by the stabilizing financial condition of producers that had been in bankruptcy proceedings and increasing export demand. U.S. coal exports were 97 million tons in 2017, up from 60 million tons in 2016 and the highest level since 2014.

Nuclear Energy: The United States operates the most nuclear reactors, has the largest installed nuclear power capacity, and generates the most nuclear power in the world. Nearly 20 percent of U.S. electricity is produced at 99 nuclear reactors in 31 states. By 2021, new nuclear reactors are expected to come online, and license applications exist for 12 additional new reactors. Subsectors of the civil nuclear industry are represented by companies that produce nuclear components (reactors, nuclear monitoring instruments, boilers, heat exchangers, industrial valves, instrument modules, insulation, economizers for boilers, pumps, and other reactor parts), nuclear fuel (uranium mining, conversion, enrichment, fuel assembly fabrication, and spent fuel storage), nuclear engineering and construction (site preparation, materials and equipment procurement, and construction), and nuclear advisory services (consulting on nuclear-related regulatory policies, human resources, infrastructure, legal services, and operations and program management services). During the next decade, this industry has the potential to generate more than $100 billion in U.S. exports and thousands of new U.S. jobs.

Federal Programs & Legislation

Department of Energy’s (DOE) First Installment of the Quadrennial Energy Review (QER): Transforming U.S. Energy Infrastructures in a Time of Rapid Change: Issued in April 2015, the first installment of the QER examines how to modernize the United States’ energy infrastructure to promote economic competitiveness, energy security and environmental responsibility, and is focused on energy transmission, storage, and distribution, the networks of pipelines, wires, storage, waterways, railroads, and other facilities that form the backbone of the U.S. energy system. The QER seeks to identify vulnerabilities in the system and proposes major policy recommendations and investments to replace, expand, and modernize infrastructure where appropriate.

DOE Loan Guarantees: The goal of the Department of Energy’s Loan Guarantee Program (Program), as defined in the Energy Policy Act of 2005, is to provide Federal support, in the form of loan guarantees, to spur commercial investments in clean energy projects that use innovative technologies. The American Recovery and Reinvestment Act of 2009 amended the Energy Policy Act and temporarily expanded the Program by providing loan guarantees for renewable energy systems, electric transmission systems, and leading edge biofuels projects.

Department of Interior’s National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022: Offshore oil and gas resources in the U.S. Gulf of Mexico are highlighted as part of a five-year leasing program for high-resource areas under the U.S. Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022, which is under development by the Bureau of Ocean Energy Management within the U.S. Department of Interior. Under this program, 10-region lease sales are scheduled for the Gulf, where resource potential and industry interest are high, and oil and gas infrastructure is well established. Two Gulf lease sales will be held each year and include all available blocks in the combined Western, Central, and Eastern Gulf of Mexico Planning Areas. In January 2018, the Secretary of the Interior announced draft proposed program for a new national OCS program for years 2019-2024. The proposed final program is expected in 2019. The 2017-2022 National OCS Program will continue to be implemented until the new National OCS Program is approved.

Renewable Electricity Production Tax Credit (PTC): The PTC is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. The PTC is meant to keep wind energy attractive for the investors who financed new wind farms as demand for clean energy sources continues to increase.

Prepared in collaboration with the International Trade Administration's Industry & Analysis Unit (I&A)

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Industry & Analysis (I&A) staff of industry, trade and economic analysts devise and implement international trade and investment strategies to strengthen the global competitiveness of U.S. industries. By combining in-depth analysis with the International Trade Administration’s industry relationships, I&A devises initiatives to unlock export and investment opportunities for U.S. businesses, represent the interests of U.S. industry in trade negotiations, and publishes research on global opportunities for U.S. companies.

Energy Industry Associations

Alliance to Save Energy
American Boiler Manufacturers Association
American Coal Council 
American Coalition for Ethanol
American Council for an Energy-Efficient Economy
American Council on Renewable Energy 
American Exploration & Production Council
American Fuel & Petrochemical Manufacturers
American Gas Association
American Petroleum Institute
American Public Power Association
American Wind Energy Association
Biomass Power Association
Business Council for Sustainable Energy
Distributed Wind Energy Association
Edison Electric Institute
Energy Recovery Council
Energy Storage Association
Geothermal Energy Association 
GridWise Alliance
Independent Producers Association of America
Industrial Energy Consumers of America
International Association of Drilling Contractors
International District Energy Association
LNG Allies
National Association of Electrical Equipment and Medical Imaging Manufacturers
National Association of Energy Service Companies 
National Biodiesel Board
National Hydropower Association
National Mining Association
Nuclear Energy Institute
Nuclear Industry Council 
Petroleum Equipment and Services  Association 
Renewable Fuels Association 
Solar Energy Industries Association 
Smart Electric Power Alliance
United States Clean Heat and Power Association 
U.S. Energy Association 
U.S. Industrial Pellet Association
Utilities Technology Council


Industry Publications:

Bloomberg New Energy Finance
CleanTechnica
Greentech Media 
Platts Energy 
Renewable Energy World 
Solarbuzz 
Utility Dive