Energy policy in Alabama

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Energy policy in Alabama
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Quick facts
Energy department: Alabama Department of Economic and Community Affairs
State population: 4.8 million
Per capita income: $35,625
Energy consumption
Total energy consumption: 1,931 trillion BTU[1][2]
Per capita energy consumption: 402 million BTU
Energy spending
Total state energy spending: $24.479 million
Per capita energy spending: $5,096
Residential natural gas price: $20.67 per thousand cubic foot
Residential electricity price: 11.8 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Glossary of energy terms
Energy policy in Alabama
Fracking in Alabama

Energy policy in Alabama depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Alabama, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Alabama

Energy overview

State facts

Below are quick facts about Alabama’s energy climate.

Alabama

  • is a net electricity exporter.
  • has fossil fuels in the form of natural gas, coal, crude oil and coalbed methane.
  • has renewable energy in the form of biomass and biofuels and hydroelectric power.
  • ranks fifth in the nation for biomass fueled production.
  • has the fourth largest seaport for U.S. coal exports at Mobile.
  • has three nuclear plants, two of which are operating, including the second largest plant in the United States.
  • ranked sixth in net electricity generation from renewable sources in 2010.[3]

In Alabama

  • households consume about 28 percent more energy than the U.S. average, but spend 4 percent less on energy than the U.S. average.
  • electricity generation is split almost evenly between natural gas, coal and nuclear generation.
  • electricity is the main source of energy used in home heating.
  • renewable energy resources made 17.5 percent of net energy generation in 2013.
  • industry is the largest energy-consuming sector in the state.[3]

Available energy resources

Alabama has considerable traditional energy resources including oil, coal, coalbed methane and natural gas. Most of the oil reserves are in the northwestern part of the state and on the Gulf Coast in the southwest. Natural gas is found both on and offshore, with a majority of production happening onshore in coalbed methane deposits. Bituminous coal is plentiful in the northern part of the state, most of which is exported through Mobile to Europe and South America. Alabama imports coal from Wyoming and Latin America. Nuclear power is also a major source of electricity, with a total capacity of 3,310 megawatts between the state's two plants.[3]

Alabama has renewable energy resources that contributed 17.5 percent of electricity generation in 2011 according to the U.S. Energy Information Administration (EIA). Five percent of Alabama’s total electricity generation came from hydroelectric sources. The dams are located on the Alabama and Cooska rivers. Alabama has one of the world's largest solid biofuels plants. The plant is not currently operating, but the state intends to begin operations again, although only at half capacity. Alabama currently has little wind or solar energy production.[3]

Consumption and prices

Energy consumption in Alabama
AL energy consumption chart.png

Legend[4]
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As shown on the pie chart, in 2011 almost 42 percent of Alabama’s energy use was for industry, and one quarter for transportation. The rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Residential consumption is relatively higher due to year-round climate demands. Electric power plants are the largest consumer of coal in the state. Most of the energy consumed in Alabama is in the form of coal, which is the largest source for electricity generation. Gasoline, used in transportation, accounts for most of the petroleum consumed in the state. Alabama ranks 21st in petroleum consumption in the United States.[3] Generally the price of gasoline in the state is slightly lower than the national average.[5][6][7] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Alabama collects a total tax of 20.9 cents on every gallon of gasoline, which ranks it at the 37th highest in the United States.[8][9]

Comparison tables

The table below compares Alabama’s consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Mississippi, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Alabama’s rank of 15th in carbon emissions means that carbon emissions are higher in Alabama than in Mississippi, which has a ranking of 32nd.
  • Likewise, per capita income in Alabama is higher than in Mississippi, which at 51st, ranks 8 places behind Alabama’s ranking of 43rd.
  • Per capita spending and consumption are nearly identical for citizens of both Alabama and Mississippi despite having very different natural gas prices.
  • Alabama ranks third highest for natural gas prices while Mississippi ranks 32nd.

Households consume and spend similarly because both of these states rely heavily on electricity as their main source of energy for home heating. Electricity prices were within half a cent of each other in both states in October of 2013, so their expenditures per capita are close. If Alabama relied on natural gas for electrical generation as Mississippi does, it would have much larger expenditures than Mississippi. Alabama however relies on coal for a majority of its electrical generation.[3][10]

Consumption and Expenditures Comparisons Summary
Type AlabamaMississippiU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population4.8 million233 million31313.9 million
Per Capita Income Average$35,62543$33,07351$42,693
Total Consumption1931 trillion BTU171163 trillion BTU2997,301 quadrillion BTU
Per Capita Energy Consumption402 million BTU13391 million BTU15312 million BTU
Total Spending on Energy$24,479 million19$15,169 million29$1,394,088 million
Per Capita Spending on Energy$5,09615$5,09516$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$20.673$9.4432$12.48
Price of Electricity, cents per kWh11.83311.322612.31
Total Carbon Dioxide Emissions, million metric tons (2010)132.71565.5325,631
*Rank is from highest to lowest.
See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Alabama
Source Alabama 2011 U.S. average 2011
Natural gas 29.8% 49.5%
Fuel oil 0.2% 6.5%
Electricity 60.8% 35.4%
Liquid Petroleum Gases (LPG) 7.6% 5%
Other/none 1.4% 3.6%

Production and transmission

Alabama produced 1,401.2 trillion BTU of energy in 2011. Of that, 33 percent came from coal, 29 percent came from nuclear sources and 16 percent from natural gas. The remaining 22 percent came from what the EIA classifies as ‘other’ renewable energies. Most of this "other" generation came from hydroelectric sources.[11]

Energy production by type in Alabama, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 48.6 3.47% 0.41%
Natural gas 226.8 16.19% 0.86%
Coal 468.7 33.45% 2.12%
Nuclear 411.8 29.39% 4.98%
Biofuels 0 0% 0%
Other 245.3 17.51% 3.44%

Electricity produced and consumed in Alabama is generated almost evenly between coal, natural gas and nuclear sources. While most of the coal mined in Alabama is exported, most of the coal used in electricity generation is shipped into Alabama by rail from Wyoming. Latin America also provides coal for domestic demand. Most of that coal is consumed by power plants.[3]

Nuclear power provides 27 percent of Alabama's electricity generation and is produced at the Brown’s Ferry nuclear plant, the second largest in the U.S., and at the Joseph M. Farley plant. A third plant has been constructed near Hollywood, Alabama, but is not in operation. Combined, the two operating plants have a capacity of 5,110 megawatts.[3][12]

Natural gas is used to produce only around 16 percent of total generation, but is increasingly being used in the electric power sector. Overall, natural gas production from the Black Warrior Basin and Cahaba Coal Fields has declined significantly since the late 90’s. Only two natural gas pipelines originate in Alabama: the Enterprise Intrastate-Alabama and Enbridge Pipelines. These pipelines feed the southeast region of the United States.[13]

Where electricity comes from in Alabama[14]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 7,000 0.06% 0.02%
Natural gas-fired 3,730,000 31.4% 0.37%
Coal-fired 4,037,000 33.98% 0.23%
Nuclear 3,218,000 27.09% 0.41%
Hydroelectric 634,000 5.34% 0.2%
Other renewables 241,000 2.03% 0.12%
Total net electricity generation 11,880,000 100% 0.29%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

The Alabama Power Company is the largest electric utility in Alabama, and provides electricity to most of the state. Alagesco, the Alabama Gas Company and MobileGas are the only investor-owned natural gas utilities. Alegesco is the largest, serving approximately 350,000 customers. Transmission is mostly owned by Southern Company through Alabama Power. The Alabama Municipal Energy Authority is a rural energy utility that provides power to some 350,000 people. Other utilities are minor, locally-based cooperatives.[15][16][17][18][19]

Energy policy

Policy Issues
While Alabama would like to see increases in renewable energy and energy efficiency, some worry about a lack of incentives for renewable energy. The high cost of renewable energy and a lack of government buy in are other concerns. There may be some pushback against renewable energy if costs are passed down to customers.[20]
See also: Fracking in Alabama

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. While Alabama does not have a Renewable Portfolio Standard (RPS), many of the state's utilities have incentive programs for those looking to increase personal energy efficiency. The state does sponsor two loan programs, including the AlabamaSAVES Revolving Loan Program offered by the Alabama Department of Economic and Community Affairs and the Local Government Energy Loan Program. AlabamaSAVES grants loans to businesses to retrofit existing facilities. The Local Government Energy Loan Program provides zero interest loans for renewable energy systems and energy efficiency improvements made to local government buildings and schools.[21][22][23][24][25][26]

The American Council for an Energy Efficient Economy (ACEEE) is a non-profit organization dedicated to improving energy efficiency policy in the U.S. They focus on energy policy, research and outreach. Each year, they rank each state according to its energy efficiency. In 2013, Alabama scored 39th out of 50 for energy efficiency.[27]

Major legislation

  • HB 50, (2011) changes regulatory standards for coal ash disposal. It removes the coal ash exemption from Alabama's solid waste disposal laws. This allows the Alabama Department of Environmental Management (ADEM) power to require coal ash to be stored in approved, lined landfills. ADEM can now monitor the groundwater surrounding coal ash disposal ponds.[28][29]
  • HB 518, (2012) created the Alabama Public Interest Energy and Fuel Research and Development Grants Program. The program is run through the Alabama Department of Agriculture and Industry and the Center for Alternative Fuels. The purpose of the program is to provide funds for alternative fuels research and infrastructure development in Alabama. A particular purpose of the bill is to create jobs in ethanol production in Alabama, which currently has no ethanol manufacturing and has to import what ethanol it uses.[30][31]

Government agencies and committees

Policypedia
Policypedia energy logo.PNG
State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.

State environmental policy


See also
Local fracking on the ballot

Statewide fracking on the ballot

  • The Alabama Public Service Commission (PSC) was created in 1915 as the Railroad Commission of Alabama and has since become the Alabama PSC. Types of utilities regulated include electric, natural gas, water, combined water and sewer utilities and telecommunications. The PSC monitors rates and quality of service for 34 companies and enforce safety rules for natural gas and hazardous liquid pipelines. The PSC is composed of three full-time commissioners who decide the cases brought to the PSC for changes in utility operations, rates and for construction projects. The Energy Division is responsible for all major aspects of the PSC’s regulation of Alabama’s electricity and natural gas utilities. There are five sections in the energy division: electricity, special projects, natural gas, pipeline safety and water.[34]
  • The Alabama Department of Economic and Community Affairs (ADECA) has an energy division that coordinates the state's energy policy development and activities. Its goal is to "increase energy efficiency, reduce energy consumption, promote energy-efficiency and renewable-energy technologies, make energy efficiency more affordable for low-income residents and to aid low-income households, especially those with vulnerable populations such as elderly, disabled and young children, with the increasing costs of home energy." Funding for the State Energy Program comes from a U.S. Department of Energy grant.[35][36]

Major organizations

  • Energize Alabama is a network of professionals, utility companies, government agencies, educational institutions, environmental organizations and others. Their mission is to make Alabama a leader in energy efficiency and renewable energy generation in the southeast. They write and advocate energy proposals before the Alabama State Legislature. These include recommendations to create a new state energy division to further the use of alternative fuels, and for the government to provide various incentives for the production and use of renewable or alternative energy.[38]
  • There are several river advocate organizations in Alabama, including: the Black Warrior Riverkeeper, Cahaba Riverkeeper, Cahaba River Society and Coosa Riverkeeper. All of these organizations advocate for ecological protection for rivers from energy projects, specifically mining operations. Their members are mostly interested citizens. Riverkeeper organizations are part of much larger, national group of similar organizations.[39][40][41]

In the news

This section displays the most recent stories in a Google news search for the term "Alabama+Energy+Policy"

All stories may not be relevant to this page due to the nature of the search engine.

Alabama Energy News Feed

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration State Profiles and Energy Estimates, Alabama Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated price information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Alabama Overview," accessed March 8, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 U.S. Energy Information Administration, "Alabama Profile Analysis," December 18, 2013
  4. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  5. Gas Buddy, "Historical Gas Charts," accessed February 27, 2014
  6. To compare current gasoline prices in Alabama to the U.S averages, go to GasBuddy.com
  7. U.S. Energy Information Administration, "Energy Consumption By Source, Ranked By State," accessed March 8, 2014
  8. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  9. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  10. U.S. Energy Information Administration, "Mississippi Profile Analysis," December 18, 2013
  11. U.S. Energy Information Administration, "State Energy Data System, Production," accessed February 18, 2014
  12. Alabama Power, "Nuclear Energy," accessed February 27, 2014
  13. U.S. Energy Information Administration, "About U.S. Natural Gas Pipelines," accessed February 27, 2014
  14. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Alabama Overview," accessed February 5, 2014
  15. Alabama Power Company, "Alabama Service Territories," accessed March 12, 2014
  16. Alabama Public Service Commission, "Natural Gas," accessed February 27, 2014
  17. Alabama Public Service Commission, "Electricity Section," accessed February 27, 2014
  18. Alagasco, "Quick Facts," accessed March 12, 2014
  19. Alabama Municipal Energy Authority, "Who We Are," accessed March 12, 2014
  20. Alabama Department of Economic and Community Affairs, "Alabama Energy Plan Survey Results" accessed March 14, 2014
  21. U.S. Department of Energy, "Alabama Saves Revolving Loan Program," accessed February 27, 2014
  22. U.S. Department of Energy, "Local Government Energy Loan Program," accessed February 27, 2014
  23. American Council on Renewable Energy, "Renewable Energy in Alabama," accessed March 12, 2014
  24. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  25. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  26. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  27. American Council for an Energy Efficient-Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  28. OpenBama.org, "Current text for HB 50," accessed February 28, 2014
  29. "Southern Alliance for Clean Energy, "Alabama, A State's Role in Coal Ash Regulation," accessed February 28, 2014
  30. "OpenBama.org", "Current Text for HB 518," accessed February 28, 2104
  31. The Alabama Political Reporter, "The Alabama Public Interest Energy and Fuel Research and Development Grants Program," accessed February 28, 2014
  32. The Alabama Legislature, "Permanent Joint Legislative Committee on Energy Policy," accessed February 27, 2014
  33. The Alabama Legislature, "Standing Committees," accessed February 27, 2014
  34. Alabama Public Service Commission, "Energy Division," accessed February 27, 2014
  35. Alabama Department of Economic and Community Affairs, "Energy," accessed March 9, 2014
  36. Alabama Department of Economic and Community Affairs, "State Energy Program," accessed March 9, 2014
  37. Code of Alabama, "Section 9-2-5," accessed May 31, 2011
  38. Energize Alabama, "Introduction," accessed February 27, 2014
  39. Cahaba River Society, "About the Cahaba Mission," accessed February 27, 2014
  40. Cahaba Riverkeeper, "Home," accessed February 27, 2014
  41. Black Warrior Riverkeeper, "About," accessed February 27, 2014