Energy Industry Spotlight
The Energy Industry in the United States
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).
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.
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.
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.
Federal Programs & Legislation
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.
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
Independent Producers Association of America
Industrial Energy Consumers of America
International Association of Drilling Contractors
International District Energy Association
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