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Last Updated: December 18, 2013
Alabama's energy use per capita is high because of demand for manufacturing and summer air conditioning.
Alabama is located on the Gulf of Mexico where warm Gulf waters provide the abundant moisture that cloaks the state in humidity most of the year. Two-thirds of the state is Gulf coastal plain. In its north, the state rises to include the southwestern limits of the Appalachian Mountains and the southeastern edge of the Interior Plains. Although the climate is subtropical, blasts of cold air bring snow to the northern half of the state in most years.
Alabama is rich in energy resources. The state has considerable natural gas reserves, substantial deposits of coal, and some crude oil and coalbed methane resources. Several rivers in the state provide hydroelectric power, and Alabama's forests, which cover more than two-thirds of the state's land, provide ample biomass.
Alabama's energy use is well above the national average because of high demand from the state's manufacturing base. Alabama ranks in the top one-third of states in energy consumption per person. The industrial sector consumes the most energy, using almost as much as the transportation and residential sectors combined. The leading industries in the state include the manufacture of chemicals, paper products, primary metals, transportation equipment, and food products. Despite high energy use for cooling during the hot, humid summers, the residential sector accounts for only about one-fifth of the state's total energy consumption. The transportation sector uses about one-fourth of the state's total energy and the industrial sector uses more than two-fifths.
Alabama's three oil refineries can process about 120,000 barrels of crude oil per day.
Alabama produces a small amount of crude oil from fields in the northwestern part of the state and on the Gulf Coast to the southwest. Annual proven oil reserves and production recently increased following a significant drop-off from the mid-1990s.
Alabama has three petroleum refineries: one located near the Port of Mobile, one in Tuscaloosa on the Black Warrior River, and one in Atmore. In combination, they can refine about 120,000 barrels of crude oil per day. Petroleum products made at Alabama's refineries are delivered to local and regional markets and shipped by pipeline to states in the U.S. Northeast. Alabama receives additional petroleum products from Texas and Louisiana that are transported through the Colonial and Plantation interstate pipelines.
The majority of the petroleum consumed in Alabama is used as transportation fuels, particularly motor gasoline. Reformulated gasoline is not required in Alabama and most of the state can use conventional gasoline year round. Counties in the Birmingham area are required to use gasoline with a reduced volatility during the summer months.
Alabama produces natural gas both onshore and in state waters offshore. Its annual natural gas production has declined since the late 1990s, and the state currently accounts for less than 1% of total U.S. output. More than one-half of Alabama's natural gas production comes from onshore wells, and much of that output comes from coalbed methane deposits (natural gas found trapped within coal seams) in the Black Warrior Basin and the Cahaba Coal Field. Alabama's proven reserves of natural gas have fallen to less than one-half of their peak of 5.8 trillion cubic feet in 1992.
An increasing amount of the natural gas delivered to end-use customers in Alabama is going to the electric power sector, and, since 2007, that sector has been the largest natural gas-consuming sector in the state. The industrial sector consumes the next largest amount. Although about 3 out of every 10 households use natural gas for heating, the residential sector uses far less than one-tenth of the natural gas delivered to end-use customers because of the state's mild winters.
Mobile is one of the largest U.S. coal ports, handling both imports and exports.
Alabama produces large amounts of high quality bituminous coal in the northern part of the state. Coal comes from both surface and underground mines. About half of the coal mined is delivered by railroad, barge, and truck to electric power plants in Alabama; a small amount is typically consumed by industrial facilities. The other half of coal produced is exported. Mobile is among the top four seaports for exporting U.S. coal, most of which is bound for Europe and South America. Mobile also unloads more imported coal than any other U.S. seaport.
About two-thirds of Alabama's domestic coal demand is met by coal from other states. Wyoming is the largest supplier. Coal is delivered to Alabama by railroad, river barge, and truck. Coal is also imported, mostly from Latin America. Electric power plants are the biggest consumers of coal in Alabama.
The Browns Ferry plant has the second largest nuclear electric generating capacity in the United States.
Alabama ranks among the top states in electricity generation. Coal was typically the dominant fuel for electric power generation in the state, but natural gas has taken an increasing share in recent years, equaling or exceeding coal-fired generation. Alabama is also a major generator of nuclear power. Its two nuclear power plants, with five reactors combined, produce about one-fourth of the electricity generated in the state. The three reactors at the Browns Ferry nuclear power plant in Limestone County have a combined generating capacity of 3,310 megawatts, second only to Arizona's Palo Verde plant in generating capacity among nuclear power plants in the United States.
Alabama is one of the top producers of hydroelectric power east of the Rocky Mountains, with about two dozen hydroelectric dams, located mainly along the Alabama and Coosa Rivers. Hydroelectric power typically supplies about 5% of the state's electricity generation. Alabama also ranks among the top states for electricity generation capacity from burning biomass, including wood byproducts from the state's substantial forest products industry.
Alabama's biggest electricity consumers are its residential and industrial sectors. The state's average household consumption of residential electricity is one of the highest in the country because of high air-conditioning demand during the hot summer months and the widespread use of electricity for home heating during the winter months. Nonetheless, Alabama's electricity production exceeds consumption, which allows large amounts of electricity to be delivered to the neighboring states of Mississippi, Tennessee, and Georgia over several high-voltage interstate transmission lines.
Alabama ranks among the top states in net electricity generation from wood waste, landfill gas, and other biomass, most of which is generated by nonutility power producers. The state is also a significant hydropower producer. Alabama's wind energy resources are considered small, except along the state's short coastline.
There is little commercial electricity generation from solar power. However, the state's largest electric utility, Alabama Power, has installed four types of solar panels using different technologies on the roof of its 18-story headquarters building in downtown Birmingham to assess which type of solar panel works best in Alabama's climate. The state's other major electricity provider, the Tennessee Valley Authority, offers homeowners and businesses financial incentives to install renewable energy generation and receive credit on their utility bills for power sold back to the electric grid.
One of the world's largest solid biofuel plants, located near Selma and originally designed to produce 500,000 tons of compressed wood pellets each year, shut down in late 2009. There are plans by a new owner to restart the plant, but annual output would be 275,000 tons, about one-half the original capacity.