Last Updated: July 18, 2024

Overview

Arkansas has a diverse geography, with mountains, lakes, forests, and river valleys. The state is rich in natural resources, with abundant natural gas, coal, oil, and timber. Arkansas is home to the only active diamond mine in the United States, the Crater of the Diamonds State Park, where visitors can search for rare gems.^1,2 This is represented by the large diamond in the center of the Arkansas state flag.³ The Mississippi River flows along the state's eastern border, the northern edge of the Gulf Coastal Plain occupies southern Arkansas, and rugged highlands cover the state's north and west.⁴ The fertile Arkansas River Valley separates the Ouachita Mountains from the Ozark Plateau in western Arkansas. Most of the state's natural gas production is from the Arkoma Basin, which underlies the Arkansas River Valley. Coal resources are found in the valley near the state's western border, and coal resources also cover most of the eastern half of the state.^5,6,7,8 To the south, the lowlands of the Gulf Coastal Plain contain the state's crude oil-producing area.^9,10

Arkansas has considerable hydropower from rivers that flow generally east and south from the state's highland regions toward the Mississippi River.¹¹ The Mississippi River Valley and the upper reaches of its delta occupy the eastern third of Arkansas.¹² That area, part of the Mississippi River Alluvial Plain, has rich soils that, along with the state's hot, humid summers and mild, slightly drier winters, provide excellent conditions for agriculture.^13,14 Agricultural wastes and the forests that cover almost three-fifths of the state supply Arkansas with significant biomass resources.^15,16,17

Arkansas consumes about 50% more energy than it produces, and its per capita energy consumption usually ranks among the top one-third of the states.^18,19 The industrial sector, which includes agriculture, consumes the most energy of any end-use sector in Arkansas, accounting for more than one-third of the state's total energy use.²⁰ Poultry, soybeans, and rice are the state's top three agricultural products in terms of cash farm receipts.^21,22 Several energy-intensive manufacturing industries also are major contributors to Arkansas's gross domestic product. They include: food, beverages, and tobacco; the manufacture of primary metal and fabricated metal products; paper products; chemicals; plastics; and natural gas and crude oil extraction and mining.²³ The transportation sector accounts for over one-fourth of the state's energy consumption, followed by the residential sector at one-fifth and the commercial sector at one-sixth.²⁴

Natural gas

Arkansas holds about 1% of the nation's proved natural gas reserves, and in 2023 the state accounted for 1% of total U.S. marketed gas production.^25,26 Most of the state's natural gas production is from the Arkoma Basin in west-central Arkansas, although there are also gas wells in the southern part of the state. Most of the natural gas produced in southern Arkansas is associated with crude oil production that contains some heavier hydrocarbons, such as propane.^27,28 The state's coal formations produce coalbed methane, and much of that methane production comes from the Lower Hartshorne coalbed located in west-central Arkansas along the state's border with Oklahoma.^29,30,31 However, Arkansas is not a major producer of coalbed methane. The state accounts for just 0.1% of total U.S. coalbed methane output.³²

Marketed natural gas production in Arkansas increased significantly beginning in 2008. Output more than doubled by 2012 because of horizontal drilling and hydraulic fracturing in the Fayetteville Shale, which accounts for most of the state's natural gas production.^33,34,35 However, natural gas production in Arkansas has decreased every year since its 2012 peak.³⁶ The state's natural gas output in 2023 was one-third of what it was in 2012 and fell to its lowest level since 2007.³⁷

Arkansas produces more natural gas than it consumes.^38,39 More than a dozen natural gas pipelines, mostly from Louisiana, Oklahoma, Mississippi, and Texas, pass through Arkansas on the way to markets in the Midwest and Northeast.^40,41 Large volumes of natural gas flow into the state and even larger volumes move out, with supplies mostly going through Mississippi, Louisiana, and Missouri.⁴² The state has two natural gas storage fields that together can hold nearly 22 billion cubic feet of gas, which is about 0.2% of U.S. total underground storage capacity.^43,44

In 2023, the electric power sector consumed about half of the natural gas delivered to consumers in Arkansas, as generation from natural gas-fired power plants in the state provided 39% of total electricity net generation.^45,46 The industrial sector, which includes agriculture, accounted for 29% of the state's natural gas deliveries. The sector typically increases natural gas use during the fall months to dry the nation's largest harvested rice crop.^47,48 The commercial sector accounted for about one-seventh of the state's gas deliveries. The residential sector, where about 4 in 10 Arkansas households use natural gas as their primary source for home heating, consumed about 7%.^49,50

Petroleum

Arkansas's proved crude oil reserves are small, accounting for about 0.1% of the U.S. total, and the state produces about 0.1% of the nation's total crude oil output. Oil production has remained steady at 12,000 barrels per day since 2021, a decline from a peak of 82,000 barrels per day in 1960.^51,52,53 Arkansas once played a larger role in the U.S. oil sector, leading the nation's crude oil production in the mid-1920s from its large Smackover oil field in the southern part of the state. Smackover remains the state's biggest crude oil producing field.⁵⁴ However, many oil wells in the state are now stripper wells that produce less than 10 barrels of crude oil per day.⁵⁵ Arkansas's crude oil production continues to be concentrated along the state's southern border.⁵⁶

Arkansas has 2 oil refineries that have a combined processing capacity of almost 91,000 barrels of crude oil per calendar day, which equals less than 1% of U.S. total refining capacity. The larger refinery in El Dorado can process about 83,000 barrels of crude oil per calendar day into motor gasoline, diesel fuel, propane, solvents, and asphalt products. The refinery processes crude oil produced in Arkansas and from other states and countries. The smaller refinery in Smackover processes about 7,500 barrels per calendar day and produces lubricants and process oils that are marketed to the tire, electrical, asphalt, and roofing industries.^57,58,59,60

The transportation sector accounts for about four-fifths of the petroleum consumed in Arkansas, and the industrial sector uses about one-seventh. The commercial and residential sectors account for most of the state's remaining petroleum use.⁶¹ About 6 out of 100 Arkansas households use petroleum products, mostly propane, for home heating.⁶² Arkansas allows statewide use of conventional motor gasoline without ethanol, although almost all U.S. gasoline contains at least 10% ethanol.^63,64 Arkansas does not have any ethanol production plants, but the state does have two biodiesel manufacturing plants with a combined production capacity of 75 million gallons per year, about 4% of U.S. total capacity. Arkansas consumes much less biodiesel, about 20 million gallons annually.^65,66,67

Electricity

In 2023, natural gas remained the leading fuel used to generate electricity in Arkansas and accounted for 39% of the state's total electricity net generation. Natural gas-fired generation exceeded the state's coal-fired generation in 2020 for the first time. Coal accounted for 27% of the state's generation in 2023.⁶⁸

Natural gas fuels 5 of the 10 largest power plants by capacity in Arkansas, including the 2,000-megawatt Union Power Station, which is the largest power plant in the state. Coal fuels 4 of Arkansas's 10 largest power plants by capacity. The second-largest power plant is the state's one nuclear power plant—with two reactors—that provided about 24% of in-state net generation in 2023. The 1,822-megawatt nuclear power plant is located on Lake Dardanelle about 60 miles northwest of Little Rock. Almost all the rest of the state's electricity net generation came from renewables, mainly hydroelectric power, solar power, and biomass-fueled generating facilities.^69,70,71,72

In 2022, Arkansas ranked 11th among the states in total electricity sales per capita and 6th in residential electricity sales per capita.⁷³ The industrial and residential sectors each account for the largest share of electricity use in Arkansas, with 38% of the state's total power sales each. Slightly more than half of the households in the state use electricity as their primary energy source for home heating, and more than 90% of households use air conditioning. Arkansas ranks 11th among the states with the lowest average electricity prices. The commercial sector accounts for 24% of state electricity use.^{74,75,76,77,78}

Coal

Coal was Arkansas's most valuable mineral resource from its first commercial production in the mid-19th century, but its importance diminished with the discovery of oil in the state in the 1920s and has continued to decrease because of the increased retirement of coal-fired power plants nationwide.^79,80 Arkansas has 227 million tons of recoverable coal reserves, which is about 0.1% of the U.S. total. However, the state's last coal production occurred in 2017 at three small mines, all located in the Arkansas River Valley near the state's western border.^81,82 In 2022, Arkansas was the 18th-largest coal-consuming state, using nearly 12.1 million tons. The electric power sector uses almost all the coal consumed in the state and it arrives by rail primarily from Wyoming. Industrial plants in the state also receive small amounts of coal by rail and truck from Utah, Colorado, Illinois, and Alabama.^83,84

Renewable Energy

Renewable sources of energy provided 9% of the total electricity generated in Arkansas in 2023. Conventional hydroelectric power accounted for about two-thirds of the state's renewable generation. The state has 19 utility-scale (1 megawatt or larger) conventional hydroelectric power generating facilities and one hydroelectric pumped storage plant.^85,86 Pumped storage plants pump water from a lower reservoir to an upper reservoir during periods of low demand for electricity, which is usually at night, when electricity is less costly. The water is released from the upper reservoir in periods when power demand and electricity prices are higher, usually during the day, the water is released from the upper reservoir and flows down through turbines on its way to the lower reservoir, producing electricity. Although the pumped storage plant uses more power than it generates, it supplies power in periods of peak demand when electricity prices are higher.⁸⁷

In 2023, the amount of total electricity generated in Arkansas by solar energy continued to exceed biomass-fueled generation, and solar power accounted for about one-fifth of the state's renewable electricity.⁸⁸ Arkansas's two largest solar farms each have 180 megawatts of generating capacity. The newest of the two is the Big Cypress Solar Farm, which came online in January 2024 in the eastern part of the state, covering about 1,550 acres.⁸⁹ The Searcy Solar farm, located northeast of Little Rock, came online in January 2022, and has a generating capacity of 100 megawatts. It is the first solar farm in the state with battery storage and can store 30 megawatts of solar-generated electricity.⁹⁰ Over 1,100 megawatts of solar power generating capacity is scheduled to come online in Arkansas in 2024 and another 400 megawatts in 2025.⁹¹

Biomass supplied 14% of Arkansas's total in-state renewable electricity in 2023, almost all of it from wood and wood-derived fuels.⁹² Solid biomass residues, including crop residues and methane from livestock manure, are other potential resources for electricity generation in the state.^93,94 Arkansas's biomass resources also provide feedstock for the state's one wood pellet manufacturing plant, which has a production capacity of 744,000 tons per year. It is the third-largest wood pellet plant in the nation.⁹⁵ Wood pellets are used for heating and electricity generation.⁹⁶

Arkansas does not generate any electricity from utility-scale wind power facilities, although it has moderate wind energy resources in the Ozark Mountains in the northwest corner of the state.^97,98,99

Arkansas does not have a renewable portfolio standard that requires the state's electricity providers to generate a certain amount of electricity from renewable energy sources.¹⁰⁰ However, the state does have net metering, allowing households with small, customer-sited solar panels, wind turbines, or other renewable power generating installations no larger than 25 kilowatts in size to receive credits from utilities for excess electricity sent to the grid. Businesses with renewable electric generating systems that are up to 1 megawatt in capacity are also eligible for net metering. In March 2023, the Arkansas legislature passed legislation that was signed into law reducing the credit that new net-metering customers receive for their surplus power and increasing the size of eligible business renewable generating systems to 5 megawatts.^101,102

In 2010, the Arkansas Public Service Commission (APSC) implemented an energy efficiency resource standard that required the state's investor-owned electric and natural gas utilities to undertake energy efficiency measures. In January 2023, the APSC extended through 2026 the targets calling for a 1.2% reduction in utility sales of electricity and a 0.5% reduction in utility sales of natural gas from 2018 levels.^103,104 In 2023, Arkansas launched the Electric Vehicle Infrastructure Deployment Plan to ensure a reliable, affordable, and equitable electric vehicle charging network.^105,106 As of May 2024, Arkansas had 327 public-only electric vehicle charging locations and 8 combined public and private locations.¹⁰⁷ The majority of these are clustered around Little Rock and Fayetteville.¹⁰⁸

Endnotes

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¹¹ Reynolds, Jerry, Hydroelectricity, The Encyclopedia of Arkansas History and Culture, updated November 30, 2023.
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¹⁴ Buckner, Ed, Climate and Weather, The Encyclopedia of Arkansas History and Culture, updated October 13, 2022.
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⁸¹ U.S. EIA, Annual Coal Report 2022 (October 3, 2023), Table 1, Coal Production and Number of Mines by State and Mine Type, 2022 and 2021, Table 15, Recoverable Coal Reserves at Producing Mines, Estimated Recoverable Reserves, and Demonstrated Reserve Base by Mining Method, 2021.
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⁸³ U.S. EIA, Annual Coal Report 2022 (October3, 2023), Table 26, U.S. Coal Consumption by End Use Sector, Census Division, and State, 2022 and 2021.
⁸⁴ U.S. EIA, Annual Coal Distribution Report 2022 (October 3, 2023), Domestic distribution of U.S. coal by destination state, Arkansas, Table DS-4, Domestic Coal Distribution, by Destination State, 2022.
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⁸⁷ U.S. EIA, Energy Explained, Hydropower explained, updated April 20, 2023.
⁸⁸ U.S. EIA, Electricity Data Browser, Net generation for all sectors, thousand megawatthours, Arkansas, Annual, 2019-22.
⁸⁹ NextEra Energy, Inc., Big Cypress Solar Energy Center, accessed June 12, 2024.
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¹⁰⁰ National Conference of State Legislatures, State Renewable Portfolio Standards and Goals, updated August 13, 2021.
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¹⁰⁷ U.S. EIA, Monthly Energy Review (June 2024), Appendix F monthly state file, XLS.
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