Energy policy in Arkansas

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Energy policy in Arkansas
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Quick facts
Energy department: Arkansas Energy Office[1]
State population: 2.9 million
Per capita income: $34,723
Energy consumption
Total energy consumption: 1117 trillion BTU[2][3]
Per capita energy consumption: 380 million BTU
Energy spending
Total state energy spending: $14,047 million
Per capita energy spending: $4,780
Residential natural gas price: $17.16 per thousand cubic foot
Residential electricity price: 9.54 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
Energy terms and definitions
Energy policy in Arkansas
Fracking in Arkansas

Energy policy in Arkansas 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 Arkansas 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 Arkansas

Energy overview

State facts

Below are quick facts about Arkansas’ energy climate.

Arkansas

  • is a net electricity exporter.
  • has fossil fuels in the form of petroleum, coal and natural gas.
  • has renewable energy in the form of biomass, biofuels and hydroelectric energy.
  • ranks in the top ten states in the nation for natural gas and produces almost 5 percent of the U.S. total.
  • has one nuclear plant.
  • mandates that state-owned major buildings reduce energy by 30 percent from 2008 levels by 2017.[4]

In Arkansas

  • use of natural gas for electricity production has more than doubled from 2008 to 2012, making electricity production the main consumer of natural gas in the state.
  • per capita energy consumption is in the top one-third among the states.
  • electricity is the main source of energy used in home heating, closely followed by natural gas.
  • hydroelectric energy and biomass-fueled facilities supply around one-tenth of the state's electricity generating capacity.
  • industry, including agriculture, is the largest energy-consuming sector in the state.[4]

Available energy resources

Arkansas has traditional energy resources in the form of oil, coal and natural gas. The state has access to major pipelines including: Lion, Mid-Valley, Mobil, Razorback, Sun, TEPPCO, ANR Pipeline Co., Mississippi River Transmission Corp., Centerpoint Energy Gas Transmission Co., Natural Gas Pipeline Co. of America, Texas Gas Transmission Co., Texas Eastern Transmission Corp., Tennessee Gas Pipeline Co. and Trunkline Gas Co. This access allows the state to transport natural gas. The state's surplus of traditional energy resources means Arkansas is a net energy exporter, shipping mainly natural gas and electricity to other states.[4]

Arkansas has renewable energy resources that contributed more than one-tenth of the energy production for electricity in 2011 according to the U.S. Energy Information Administration (EIA). Arkansas' main renewable energy supply come from hydroelectric energy and biomass. The state is also very fertile with a strong agricultural economy and heavily wooded lands, both of which provide fuel for biomass. There are 33 ethanol fueling stations and four production plants which convert corn into ethanol.[4][5]

Consumption and prices

Energy consumption in Arkansas
AR energy consumption chart.png

Legend[6]
     Transportation       Residential     Industrial       Commercial
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As shown in the pie chart in 2011 almost 36 percent of Arkansas' energy use was industrial and one quarter for transportation; the rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of coal (used primarily for electricity generation), followed by natural gas and petroleum.[4] Conventional gasoline is allowed in the state, without any requirement of additives or ethanol blends, unlike most states.[4] Generally the price of gasoline in the state tracks below the national average.[7][8] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents/gallon of gasoline and 24.40 cents/gallon of diesel fuel. In addition to that, Arkansas collects a total tax of 21.8 cents on every gallon of gasoline, which ranks it at the 35th highest in the United States.[9][10]

Comparisons tables

The table below compares Arkansas' consumption and spending for energy, as well as prices for gas and electricity and carbon emissions to those of Oklahoma, 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:

  • Arkansas' rank of 31st in carbon emissions means that carbon emissions are lower in Arkansas than in Oklahoma, which has a ranking of 19th.
  • Likewise, per capita income in Arkansas is lower than the national average, similarly to Oklahoma, which at 33rd ranks 13 places ahead of Arkansas' ranking of 46th in per capita income.
  • These two states are very similarly placed in the mid to low rank on population, overall consumption and price of resources.
  • Per capita energy consumption in Arkansas (at 17th) is somewhat lower than in Oklahoma (at 11th).
  • Per capita spending in Arkansas is significantly lower because it ranks 21st to Oklahoma's ranking of 13th. This is somewhat surprising because gas prices are only slightly higher in Arkansas ranking 21st and Oklahoma 23rd.
  • Electricity prices in the two states are similar with Arkansas ranking at 44th and Oklahoma at 45th.

The difference in per capita spending may result from the fact that Oklahoma uses more coal than Arkansas, which is becoming more expensive because of increased regulation, due to its carbon emissions.[11][12][13][14]

Consumption and Expenditures Comparisons Summary
Type ArkansasOklahomaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population2.9 million323.8 million28313.9 million
Per Capita Income Average$34,72346$39,00633$42,693
Total Consumption1,117 trillion BTU311,595 trillion BTU2397,301 quadrillion BTU
Per Capita Energy Consumption380 million BTU17421 million BTU11312 million BTU
Total Spending on Energy$14,047 million33$19,766 million26$1,394,088 million
Per Capita Spending on Energy$4,78021$5,22313$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$17.1621$19.8523$12.48
Price of Electricity, cents per kWh9.544410.594512.31
Total Carbon Dioxide Emissions, million metric tons (2010)66.131103.4195,631
*Rank is from highest to lowest.
See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Arkansas
Source Arkansas 2011 U.S. average 2011
Natural gas 41.2% 49.5%
Fuel oil 0.1% 6.5%
Electricity 46.0% 35.4%
Liquid Petroleum Gases (LPG) 7.7% 5%
Other/none 4.9% 3.6%

Production and transmission

Arkansas produced 1,390 trillion BTU of energy in 2011. Of that over 78 percent came from natural gas and almost 11 percent came from nuclear power. The remaining generation came from coal and from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[15]

Energy production by type in Arkansas, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 34.1 2.45% 0.28%
Natural gas 1,090.9 78.48% 4.12%
Coal 3 0.22% 0.01%
Nuclear 148.5 10.68% 1.8%
Other 113.5 8.17% 1.59%

Electricity produced and consumed in Arkansas is primarily from coal, which produces two-fifths of the total coal produced in the state. Most of the coal used in electricity generation is shipped into Arkansas by rail from Wyoming. Nuclear power provides almost one fourth of electricity and is produced at the Arkansas Nuclear One nuclear plant located in Russellville in central Arkansas. The plant has been providing power to the state for 35 years.[16]

Natural gas is exported by several interstate pipelines and is mainly sent to Mississippi and Missouri, through pipelines in Texas, Louisiana and Oklahoma. The interstate pipeline companies that move the gas from the production area to local utilities and through to other states include: ANR Pipeline Co., Centerpoint Energy Gas Transmission Co., Natural Gas Pipeline Co. of America, Mississippi River Transmission Corp., Texas Gas Transmission Co., Texas Eastern Transmission Corp. and Trunkline Gas Co. The Federal Energy Regulatory Commission regulates the rates they charge, the services they provide to the local distribution centers (LDCs) and the construction of new pipelines.[17][18]

Where electricity comes from in Arkansas[19]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 6,000 0.13% 0.02%
Natural gas-fired 750,000 16.25% 0.07%
Coal-fired 2,240,000 48.53% 0.13%
Nuclear 1,351,000 29.27% 0.17%
Hydroelectric 145,000 3.14% 0.05%
Other renewables 124,000 2.69% 0.06%
Total net electricity generation 4,616,000 100% 0.11%
**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.

Arkansas has 41 gas and electric utilities. There are four investor-owned electric utilities and four companies that sell natural gas. Arkansas Public Service Commission regulates these utilities. There are also 15 municipal utilities that are not regulated by the Commission.[20]

Most of the coal used in electricity generation is shipped into Arkansas by rail from Wyoming. The electric transmission system in Arkansas is primarily run by one cooperative: Arkansas Electric Cooperative Corp. They are responsible for transmission facilities in most regions of the state.[21]

Energy policy

Policy Issues

The lower price of electricity in Arkansas may result from the fact that the state has moved away from coal-fired nuclear plants. Coal is becoming more expensive because it is being so heavily regulated, due to its carbon emissions. Although Arkansas does not have a Renewable Portfolio Standards (RPS), the state has adopted many policies to encourage renewable energy and energy efficiency.[22]

See also: Fracking in Arkansas

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. Arkansas has been below average among the states when it comes to increasing energy efficiency and renewable energy use. Arkansas does not have a Renewable Portfolio Standard (RPS). The state has, however, adopted many policies to encourage renewable energy and energy efficiency. Some major legislation include energy reduction plans through Arkansas Act 1494 in 2011 and the Arkansas Surface Coal Mining Reclamation Act, that requires mine owners to receive permits and state energy building codes among other policies. Arkansas' most available renewable technologies include: hydroelectric power, biomass, fuel cells using renewable fuels and wind. Arkansas ranked 37 on the Energy Efficiency Scorecard produced by the American Council for an Energy-Efficient Economy.[23][24] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs.[25]

Major legislation

  • Arkansas Act 1494, (2011) is one of the state's energy reduction plans. This act directs the state to map out a plan for reducing energy for existing state buildings by 30 percent by 2017. The main objectives are to create more cost effective, safe, productive and habitable buildings; to avoid resource depletion of energy, raw materials and water; and prevent environmental degradation caused by infrastructure and facilities.[26]
  • Arkansas Executive Order 09-07, (2011) requires all executive branch members under the jurisdiction of the Governor of Arkansas to create and turn in individual Strategic Energy Plans (SEPs). The goals should follow guidelines of reducing annual operating budget and maintenance devoted to energy consumption. In addition, executive branch agencies should promote practices and operations that will reduce their overall operation impact on the environment.[27]
  • The Arkansas Surface Coal Mining Reclamation Act, (1979) gives the state permission to adopt, develop, issue and amend regulations and rules in relation to surface coal mining and reclamation productivity. The rules closely follow the federal regulations detailed in the Surface Mining and Control and Reclamation Act of 1977. The Arkansas Department of Environmental Quality's (ADEQ) Surface Mining and Reclamation Division (SMRD) oversees this act. Permit requirements must be met before work can start and are valid for up to five years. Multiple applications must be submitted by an operator of a coal mine. The required documents include: Collateral Bond From, Collateral Bond Agreement, Surety Bond, Coal Mining Application/Permit, Irrevocable Letter of Credit and Memo from AR Board of Professional Geologists on Interpretation and Analysis.[28]
  • Forestry Policies in Arkansas, (2010) was completed under the management of Arkansas Forestry Commission. Under this policy, the state completed its Forest Action Plan, through which the Forest Resource Assessment and Forest Resource Strategy were formed. The Arkansas Biomass Resources Assessment is issued by the Arkansas Energy Office. This is a report that summarizes the study through the Southern States Energy Board, funded by the U.S. Department of Energy. The study shows biomass resource percentages in categories of agriculture (52 percent), forestry (28 percent), animal (14 percent) and municipal (6 percent).[29][30]
  • Green Building Standards for State Facilities in Arkansas HB1663, (2005) encourages, but does not require, all state agencies, including institutions of higher education, to use Green Globes rating system and Leadership in Energy and Environmental Design (LEED) whenever appropriate and possible in funding or managing a public building project.[31]

Government agencies and committees

Policypedia
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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.


See also
Local fracking on the ballot

Statewide fracking on the ballot

  • The Arkansas Public Service Commission (APSC) deals with Arkansas' resources and energy. The Arkansas Public Service Commission's main duties are ensuring that the public utilities provide adequate, safe and reliable utility service at fair and reasonable rates. They also regulate interstate services and rates. Regulated utilities include electricity, natural gas, water, pipeline safety services and some telephone services.[33]
  • The Alternative Energy Commission was created by the Arkansas Legislature in 2009 and it also deals with resources and energy in Arkansas. They were created to study the impacts and needs for diverse forms of alternative energy in relation to the economic future of Arkansas. Their study areas include: the feasibility of expanding or creating alternative energy sources, the effects of implementing alternative energy sources on the economic development of the state and any other issues related to alternative energy production.[34]
  • The Arkansas State Energy Office is a division of the Arkansas Economic Development Commission. Their duties include promoting energy efficiency and growing technologies through information programs and energy education in Arkansas' communities. In addition, they manage federal energy funds throughout the state. Their website lists the state's energy incentives and programs. The main way of educating Arkansas is through the State Energy Office website. Information is organized into specific groups on the website: residential, commercial, government, industry, AR (Arkansas) Clean Cities, Renewable and Energy in Arkansas. These different groups provide information on energy saving tips, best practices, state-specific links and contacts and new technologies.[35]
  • The Arkansas Commissioner of State Lands oversees oversees landed interests for the state of Arkansas. The Commissioner is an elected official responsible for state owned lands, mineral leasing and state waterways. The Commissioner is the chairperson for the Arkansas Natural Resources Commission.[36]

Major organizations

  • The Arkansas Renewable Energy Association is a non-profit, volunteer-based organization. Professionals with industry make up the group and support the association's goals. The Arkansas Renewable Energy Association (AREA) is part of the American Solar Energy Society chapter (ASES). Their focus is to grow the adoption rate of renewable energy systems. They do this through activities designed to encourage energy independence and environmental sustainability using solar, wind, biomass, geothermal and hydroelectric energy systems.[37]
  • The University of Arkansas focuses on energy and the environment through their interdisciplinary research. Research is being done to develop new technologies that redefine the power grid, photovoltaics, biomass and environmental policy through their focus on the human and planetary scale. Alternative energy source development is focused on efficient solar cells, batteries for electric cars and reliable power grids. They encourage recent graduates to start small companies to develop a larger solar-powered industry. Their overall goal is preserving the environment and reducing energy consumption.[38]
  • The Arkansas Industrial Energy Clearinghouse has a partnership with the Arkansas Energy Office and the University of Arkansas. The organization supports and promotes energy efficiency developments in the state's manufacturing plants. The Clearinghouse offers services to customers at no cost. Services include technical expert advice, assistance and technical resources. Engineering staff can assist in making production more efficient and the Department of Energy provides tools, materials, publications and papers related to the industries. They also assist in individual energy assessments, developing energy management programs and answering individual technical questions. Overall their goal is to minimize utility expenses and create significant energy savings.[39]
  • Applied Sustainability Center (ASC) is based in the Walton College of Business at the University of Arkansas. The center is committed to building more sustainable communities through education, research and outreach. ASC's mission is to "accelerate learning about sustainability and expand the commitment to sustainable practices in communities and organizations throughout the state of Arkansas." Their website provides a network for sustainable communities which coordinates a program for reporting sustainability energy measures for towns in Arkansas. With the analysis of the reports, the ASC can better provide tools, outreach, engagement and insight to enhance economic, environmental and social communities in the state.[40]

In the news

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

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

Arkansas Energy News Feed

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See also

External links

References

  1. National Association of State Energy Officials, "Arkansas", accessed March 9, 2014
  2. These figures come from the U.S. Energy Information Administration State Profiles and Energy Estimates, Arkansas 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.
  3. U.S. Energy Information Administration, "Arkansas Overview", accessed March 3, 2014
  4. 4.0 4.1 4.2 4.3 4.4 4.5 Energy Information Administration, "Arkansas Profile Analysis," December 18, 2013
  5. Arkansas Energy, "Biofuels," accessed March 15, 2014
  6. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  7. Gas Buddy, "Historical Gas Charts," accessed March 3, 2014
  8. To compare current gasoline prices in Arkansas to the U.S averages, go to GasBuddy.com
  9. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  10. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  11. 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.
  12. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  13. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  14. Energy Information Administration, "Oklahoma State Profile Overview," accessed March 3, 2014
  15. U.S. Energy Information Administration, "State Energy Data System, Production," accessed March 3, 2014
  16. Entergy, "Information," accessed on March 5, 2014
  17. U.S. Energy Information Administration, “Arkansas Profile Overview,” accessed March 3, 2014
  18. Public Service Commission, "Natural Gas," accessed March 3, 2014
  19. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Arkansas Overview", accessed March 3, 2014
  20. Arkansas Energy Office, "Utilities in Arkansas," accessed March 5, 2014
  21. Arkansas Electric Cooperative Corp., "About Us," accessed March 5, 2014
  22. U.S. Energy Information Administration, "Arkansas Overview," accessed March 3, 2014
  23. American Council for an Energy Efficiency Policy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  24. For a full explanation of how the ACEEE calculates this ranking see the executive summary of their report.
  25. American Council for an Energy Efficiency Policy, "State Policy," accessed March 5, 2014
  26. Arkansas Energy Organization, "Act 1494," accessed March 5, 2014
  27. Arkansas Energy Organization, "Executive Order 09-07," accessed March 5, 2014
  28. U.S. Energy Department, "Arkansas Surface Coal Mining Reclamation Act (Arkansas)," accessed March 5, 2014
  29. U.S. Energy Department, "Forestry Policies (Arkansas)," accessed March 5, 2014
  30. Arkansas Energy Office, "Biomass," accessed March 5, 2014
  31. Database of State Incentives for Renewable & Efficiency, "Green Building Standards for State Facilities," accessed March 5, 2014
  32. Arkansas House of Representatives, "Joint Committee on Energy," accessed March 5, 2014
  33. Arkansas Public Service Commission, "Welcome," accessed March 5, 2014
  34. Alternative Energy Commission, "About," accessed March 5, 2014
  35. Arkansas Energy Office, "About," accessed March 5, 2014
  36. A Snapshot of Excellence, Year One, "Donations," accessed August 13, 2013 (dead link)
  37. Arkansas Renewable Energy Association, "About," accessed March 5, 2014
  38. University of Arkansas, "Research," accessed March 5, 2014
  39. Arkansas Industrial Energy Clearinghouse, "About Us," accessed March 5, 2014
  40. University of Arkansas, "Applied Sustainability Center," accessed March 5, 2014