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Indiana   Indiana Profile

State Profile and Energy Estimates

Profile AnalysisPrint State Energy Profile
(overview, data, & analysis)

Last Updated: April 19, 2018

Overview

Indiana, in the nation's Interior Plains just west of the Appalachian Mountains, extends from Lake Michigan south to the Ohio River.1 Sediments deposited over millions of years,2 when the state was covered by inland seas and later by lush swamps, became the geologic layers that contain Indiana's fossil fuel resources, predominantly coal but also oil and some natural gas.3,4,5 The flat plains and slightly rolling terrain in the northern two-thirds of the state are the result of the 2,000-foot-thick glacier that covered much of the state during the Ice Ages.6 The retreat of the glacier more than 10,000 years ago left behind the excellent topsoil that supports Indiana's agriculture.7 Ample summer rainfall and the rich prairie soils allow Indiana farmers to produce abundant corn and soybean crops8,9,10 that make the state a major producer of ethanol and biodiesel.11,12,13 Indiana's open farmland also has substantial wind energy potential.14

Although Indiana is one of the smallest states in land area west of the Appalachian Mountains, it has a varied climate because of its length from north to south. In the north, Indiana experiences lake-effect snows and winds off Lake Michigan. In the south, the hilly terrain creates localized weather variations. The climate statewide is influenced by the interplay of polar air moving south from Canada and warm, moist air moving north from the Gulf of Mexico. Indiana's winters can be bitterly cold, spring weather often includes tornadoes, and summer days may have oppressive humidity and heat.15 In part because of those weather extremes, Indiana ranks among the top 10 states in residential energy use per capita.16 The industrial sector is the state's largest energy consumer, using almost half of all energy.17 Indiana's industrial activities include the energy-intensive chemical, petroleum, transportation equipment, and steelmaking industries.18,19 The state consumes more energy than it produces.20

Coal

Indiana is the nation’s third largest coal consumer, after Texas and Illinois.

Indiana holds about 1.5% of U.S. economically-recoverable coal reserves,21 and it is one of the top 10 coal-producing states in the nation. Bituminous coal is produced from 20 mines located within the Illinois Basin in southwestern Indiana.22,23 About one-fourth of the coal produced in Indiana is shipped to a dozen other states by rail, barge, and truck. The other three-fourths is consumed in Indiana,24 but the state's production meets only about four-fifths of its coal demand.25 The rest of the coal consumed in Indiana arrives by rail and barge, primarily from mines in West Virginia, Illinois, Kentucky, and Wyoming.26

Indiana's total coal consumption ranks third in the nation, after Texas and Illinois,27 and its coal consumption for electricity generation ranks second in the nation, after Texas.28 The state is also third, after Pennsylvania and North Dakota, in the amount of coal used by the industrial sector, even though the sector's coal consumption declined every year, except for one, from 2005 to 2016.29,30 Nearly one-tenth of the coal used in Indiana is delivered to coking plants,31 which supply coke to the state's steel industry.32,33 Indiana is a leader in steel manufacturing.34

Electricity

Typically, more than four-fifths of Indiana's electricity generation has been fueled by coal, but coal use is declining. In 2017, about 70% of the state's megawatthours was generated by coal, while the share of net generation from natural gas more than doubled from three years earlier to about 20%.35,36 Eight of Indiana's 10 largest power plants are still coal-fired,37 but 60% of the state's 200 megawatts of new generation capacity that was brought on line during 2017 was powered by renewable energy sources, while the other 40% of new generation was powered by natural gas38 Wind provided nearly 5% of Indiana's electricity generation in 2017, and hydroelectricity, biomass, and solar power combined accounted for about 1% of the state's generation. Nearly all of Indiana's solar generation comes from larger, utility-scale facilities.39

Sales of electricity to Indiana’s industrial sector are among the highest in the nation.

Indiana consumers use more electricity than in-state generators can supply. To help meet power demand, in 2017 about 12% of Indiana's electricity was imported from other states.40 Those power supplies were transmitted over the two interstate power grids serving Indiana: the PJM Interconnect in the northeast corner of the state, and the Midcontinent Independent System Operator in the west and south.41 Indiana is among the top 5 states in retail electricity sales to the industrial sector.42 Total electricity consumption from all sectors in Indiana is in the top one-fourth of the states.43 Slightly more than one-fourth of Indiana households rely on electricity as their main source of energy for home heating.44

Petroleum

Indiana's economically-recoverable crude oil reserves are small.45 Use of advanced drilling technology had increased Indiana crude oil production in recent years,46,47 but in 2017 the state's oil production dropped to its lowest output level in a decade and accounted for less than 0.1% of U.S. total oil production.48 The Trenton Field, discovered in east-central Indiana in the late 1800s, was the nation's first oil field to produce more than 100 million barrels of crude oil.49 Trenton Field resources helped draw heavy industry to the state. The field ceased production in the early 20th century, and crude oil production moved to the Illinois Basin in southwestern Indiana, where output peaked in 1956.50

The Whiting refinery in Indiana is the largest inland crude oil refinery in the nation.

Indiana has two crude oil refineries.51 The Whiting refinery, located in northwest Indiana, is the largest inland crude oil refinery in the nation; only six Gulf Coast refineries can process more crude oil per day.52 It is also one of the oldest U.S. refineries, having opened in 1889.53 A recent modernization project at the Whiting refinery increased the share of heavy, sour crude oil that can be processed there from about one-fifth of the crude oil feedstock to about four-fifths.54 A second, small refinery, located in the state's southern tip at Mount Vernon, processes Illinois Basin crude oil found in southern Illinois, southern Indiana, and western Kentucky into gasoline, diesel fuel, and lubricants for customers in Indiana, Illinois, Michigan, Ohio, and Kentucky.55

Indiana is a major consumer of petroleum and petroleum products. Nearly half of the state's petroleum consumption is in the form of motor gasoline, and another third is distillate fuel oil, including diesel fuel.56 Although conventional motor gasoline can be used in most of Indiana, reformulated motor gasoline blended with ethanol is required in the state's northwest corner near Chicago. In addition, motor gasoline formulated to reduce emissions that contribute to ground-level ozone is required during the summer months in Indiana's southeast near Louisville, Kentucky.57,58 Distillate fuel sales to the residential sector have been declining over the past three decades.59 Currently, nearly 1% of Indiana households use fuel oil or kerosene for home heating, and 7% use propane.60

Natural gas

Indiana's natural gas reserves are small.61 Its annual gas production is also small, at less than 0.1% of the U.S. total.62,63 The state's natural gas output is much lower than its gas demand.64 Early discoveries of natural gas in the late 1870s helped attract industry to east central Indiana, but unregulated development caused the loss of much of the resource. The advent of advanced drilling technology has created interest in the New Albany Shale natural gas play in the state's south, which, along with potential coalbed methane resources, could add significant new natural gas reserves.65

Indiana has 21 natural gas storage fields that can hold almost 34 billion cubic feet of gas.

Indiana is crossed by about a dozen interstate natural gas pipelines that bring gas into the state,66 primarily from Illinois and Ohio, and a majority of the natural gas shipped into the state is sent on to Michigan and Ohio.67 Indiana has 21 natural gas storage fields68 with a total working capacity of about 33.6 billion cubic feet, which accounts for almost 1% of U.S. storage capacity.69

The industrial sector is the largest consumer of natural gas in Indiana and accounts for half of all natural gas used in the state.70 The state's electric power sector has quadrupled its use of natural gas for electricity generation in the last decade.71 In 2017, the electric power sector accounted for one-fifth of the state's natural gas consumption, exceeding residential sector use for two years in a row for the first time.72 The residential sector accounts for only about one-fifth of the natural gas consumed in Indiana,73 even though three-fifths of the state's households use natural gas for home heating.74

Renewable energy

Indiana is the fifth largest ethanol producer in the nation.

Indiana is among the nation's top producers of biofuels. Drawing on the state's abundant crops of corn and soybeans, Indiana's ethanol plants use corn as their feedstock, and biodiesel plants use soy oil, as well as animal fats from the state's livestock industry.75,76,77 Indiana is the fifth largest producer of ethanol and has the sixth largest production capacity for biodiesel in the nation.78,79

Renewable energy supplied 6% of Indiana's net electricity generation in 2017.80 Wind is the primary renewable resource used for electric power generation in the state.81 In 2008, Indiana's first utility-scale wind project, the Benton County Wind Farm, began operating in Indiana's northwest.82 Currently, the state has more than 2,100 megawatts of installed wind capacity, including the 600-megawatt Meadow Lake Wind Farm that stretches across three counties and is one of the largest wind projects in the nation.83,84 In 2017, nearly 5% of Indiana's electricity generation came from wind turbines.85 The rest of Indiana's renewable generation came from hydroelectric power, biomass, and solar photovoltaic (PV) facilities.86 Indiana has one large geothermal installation, at Ball State University in Muncie, Indiana.87,88 The system is designed to replace aging coal-fired boilers and provide heating and cooling to 47 university buildings.89

Indiana utilities offer net metering for customer-sited renewable generating facilities of less than 1 megawatt of capacity.90 At the end of 2016, almost 20 megawatts of solar PV capacity and wind capacity were connected under the net metering program.91 In 2017, the Indiana legislature modified the state's net metering program and reduced the compensation rate for surplus power that rooftop solar panel owners receive from utilities, switching from compensation based on a higher retail rate to one linked to the lower wholesale power rate. Net metering ends for new customers after 2022.92 The legislature also increased the limit on net metered connections from 1% to 1.5% of a utility's peak summer load.93

In 2011, Indiana's legislature created a voluntary clean energy portfolio standard that set a target of producing 7% of the state utilities' electricity supply from clean energy sources by 2019, with the share increasing to 10% by 2025.94 Eligible technologies include wind, solar, coalbed methane, clean coal technology, nuclear energy, combined heat and power systems, and natural gas that displaces electricity from coal.95 During 2017, no Indiana utility had chosen to participate.96

Endnotes

1 World Atlas, Indiana Geography, updated April 7, 2017.
2 U.S. Geological Survey, Geologic Provinces of the United States: Interior Plain Province, updated April 21, 2017.
3 U.S. Energy Information Administration (EIA), Indiana, Profile Data, Reserves, accessed March 6, 2018.
4 U.S. EIA, U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2016, Table 6, Crude oil and lease condensate proved reserves, reserves changes, and production, 2016.
5 U.S. EIA, U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2016, Table 10, Total natural gas proved reserves, reserves changes, and production, wet after lease separation, 2016.
6 Indiana Geological Survey, Surficial Geology, accessed March 6, 2018.
7 City-Data, Indiana-Topography, accessed March 6, 2018.
8 Indiana State Climate Office, About Indiana Climate (December 2002).
9 "Top 10: States that Produce the Most Soybeans," Beef2Live (March 17, 2018).
10 Cook, Rob, "States That Produce the Most Corn," Beef2Live (March 14, 2018).
11 Ethanol Producer Magazine, U.S. Ethanol Plants, All Platforms, Operational, updated January 24, 2018.
12 Nebraska Energy Office, Ethanol Facilities' Capacity by State, updated January 11, 2018.
13 U.S. EIA, Monthly Biodiesel Production Report (December 2017), Table 4, Biodiesel producers and production capacity by state, December 2017.
14 American Wind Energy Association, Indiana Wind Energy, accessed March 6, 2018.
15 Indiana State Climate Office, About Indiana Climate (December 2002).
16 U.S. EIA, State Energy Data System, Table C13, Energy Consumption Estimates per Capita by End-Use Sector, Ranked by State, 2015.
17 U.S. EIA, State Energy Data System, Table C10, Energy Consumption Estimates by End-Use Sector, Ranked by State, 2015.
18 U.S. Bureau of Economic Analysis, Regional Data, GDP & Personal Income, Begin using the data, Annual Gross Domestic Product (GDP) by State, GDP in Current Dollars, Classification NAICS, All Industries, Area Indiana, Time Period 2016.
19 Pete, Joseph, "Indiana Remains National Champion of Steel Production," nwitimes.com (March 12, 2016).
20 U.S. EIA, State Energy Data System, Table P3, Energy Production and Consumption Estimates in Trillion Btu, 2015.
21 U.S. EIA, Annual Coal Report 2016 (November 2017), Table 15, Recoverable Coal Reserves at Producing Mines, Estimated Recoverable Reserves, and Demonstrated Reserve Base by Mining Method.
22 U.S. EIA, Annual Coal Report 2016 (November 2017), Table 6, Coal Production and Number of Mines by State and Coal Rank, 2016.
23 Indiana Department of Natural Resources, Active Mining Permits Map, accessed March 8, 2018.
24 U.S. EIA, Annual Coal Distribution Report 2016 (November 2017), Domestic distribution of coal by origin State, consumer, destination and method of transportation, Indiana. p. 10.
25 U.S. EIA, Coal Data Browser, Total Consumption, Indiana, 2016.
26 U.S. EIA, Annual Coal Distribution Report 2016 (November 2017), Domestic distribution of coal by destination State, consumer, destination and method of transportation, Indiana. p. 15.
27 U.S. EIA, State Energy Data System, Table C2, Energy Consumption Estimates for Major Energy Sources in Physical Units, 2015.
28 U.S. EIA, Annual Coal Report 2016 (November 2017), Table 26, U.S. Coal Consumption by End Use Sector, Census Division, and State, 2016.
29 U.S. EIA, State Energy Data System, Table F17, Coal Consumption Estimates and Imports and Exports of Coal Coke, 2016.
30 U.S. EIA, State Energy Consumption Estimates, 1960 Through 2015, (June 2017), Indiana Table CT6, p. 179.
31 U.S. EIA, Annual Coal Distribution Report 2016 (November 2017), Domestic distribution of coal by destination State, consumer, destination and method of transportation, Indiana. p. 15.
32 "The Roles of Coal and Coke in Steelmaking," Heyl & Patter Blog (July 16, 2014).
33 SteelWorks, Where Steel is Made, Steel Plants of North America, accessed March 8, 2018.
34 Pete, Joseph, "Indiana Remains National Champion of Steel Production," nwitimes.com (March 12, 2016).
35 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.3.B, 1.4.B, 1.7.B.
36 U.S. EIA, Electricity Data Browser, Net Generation for All Sectors, Indiana, Annual, 2001-2017.
37 U.S. EIA, State Electricity Profiles, Indiana Electricity Profile 2016, Table 2, Ten Largest Plants by Generation Capacity, 2016.
38 U.S. EIA, Electric Power Monthly (February 2018), Table 6.3.
39 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.3.B, 1.10.B, 1.11.B, 1.14.B, 1.15.B, 1.17.B.
40 U.S. EIA, Indiana Electricity Profile 2016, Table 10, Supply and disposition of electricity, 1990 through 2016.
41 U.S. Federal Energy Regulatory Commission, Regional Transmission Organizations (RT)/Independent System Operators (ISO), accessed March 9, 2018.
42 U.S. EIA, Electric Power Monthly (February 2018), Table 5.4.B.
43 U.S. EIA, State Energy Data System, Table F21, Electricity Consumption Estimates, 2016.
44 U.S. Census Bureau, American FactFinder, Indiana, Table B25040, House Heating Fuel, 2012-16 American Community Survey 5-Year Estimates.
45 U.S. EIA, Crude Oil Proved Reserves, Reserves Changes, and Production, Annual, Proved Reserves as of December 31, 2016.
46 McDivitt, Herschel, Hydraulic Fracturing 101, Indiana Division of Oil and Gas, slide 35, Indiana Hydraulic Fracturing Trends, updated October 15, 2014.
47 U.S. EIA, Indiana Field Production of Crude Oil, Monthly-Thousand Barrels, 1981-2017.
48 U.S. EIA, Crude Oil Production, Monthly-Thousand Barrels, 2011-17.
49 Indiana Geological Survey, Oil and Gas-A Brief Overview of the History of the Petroleum Industry In Indiana, Trenton Field, accessed March 7, 2018.
50 Indiana Geological Survey, Oil and Gas-A Brief Overview of the History of the Petroleum Industry in Indiana, The History of Gas and Oil Exploration, accessed March 7, 2018.
51 U.S. EIA, Refinery Capacity Report (June 21, 2017), Table 3, Capacity of Operable Petroleum Refineries by State as of January 1, 2017.
52 U.S. EIA, Oil: Crude and Petroleum Products Explained, Refining Crude Oil, updated January 1, 2017.
53 BP, United States, Whiting Refinery, accessed March 7, 2018.
54 BP Global, "A Bright Future for Whiting Refinery," BP Magazine, April 9, 2014.
55 CountryMark, About Us, Refinery, accessed March 7, 2018.
56 U.S. EIA, State Energy Data System, Table C3, Primary Energy Consumption Estimates, 2015.
57 American Fuel & Petrochemical Manufacturers, State Motor Fuels Specifications, Indiana, updated September 2017.
58 NACS, U.S. Gasoline Requirements, Map, ExxonMobil, January 2018.
59 U.S. EIA, Indiana Total Distillate Sales/Deliveries to Residential Consumers, 1984-2016.
60 U.S. Census Bureau, American FactFinder, Indiana, Table B25040, House Heating Fuel, 2012-16 American Community Survey 5-Year Estimates.
61 U.S. EIA, Natural Gas Reserves Summary as of Dec. 31, Wet NG, Annual, 2016.
62 U.S. EIA, Natural Gas Gross Withdrawals and Production, Annual, 2012-17.
63 U.S. EIA, Indiana Natural Gas Gross Withdrawals, 1967-2016.
64 U.S. EIA, Natural Gas Consumption by End Use, Total Consumption, Annual, 2012-17.
65 Indiana Geological Survey, Oil & Gas-A Brief Overview of the History of the Petroleum Industry in Indiana, Sections: Southwestern Indiana, Current Activity and Future Prospects, accessed March 7, 2018.
66 Pipeline 101, Region 2 (Midwest), Natural Gas Pipelines, accessed March 7, 2018.
67 U.S. EIA, International & Interstate Movements of Natural Gas by State, Indiana, Annual, 2011-16.
68 U.S. EIA, Underground Natural Gas Storage Capacity, Total Number of Existing Fields, Annual, 2011-16.
69 U.S. EIA, Underground Natural Gas Storage Capacity, Total Working Gas Capacity, Annual, 2011-16.
70 U.S. EIA, Natural Gas Consumption by End Use, Indiana, Annual, 2012-17.
71 U.S. EIA, Indiana Natural Gas Deliveries to Electric Power Consumers, 1997-2017.
72 U.S. EIA, Natural Gas Consumption by End Use, Indiana, Annual, 2012-17.
73 U.S. EIA, Natural Gas Consumption by End Use, Indiana, Annual, 2012-17.
74 U.S. Census Bureau, American FactFinder, Indiana, Table B25040, House Heating Fuel, 2012-16 American Community Survey 5-Year Estimates.
75 NETSTATE, Indiana Economy, accessed March 12, 2018.
76 Ethanol Producer Magazine, U.S. Ethanol Plants, All Platforms, Operational, updated January 24, 2018.
77 Biodiesel Magazine, USA Plants, Existing, updated December 13, 2017.
78 Nebraska Energy Office, Ethanol Facilities' Capacity by State, updated January 11, 2018.
79 U.S. EIA, Monthly Biodiesel Production Report (December 2017), Table 4, Biodiesel producers and production capacity by state, December 2017.
80 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.3.B, 1.10.B, 1.11.B.
81 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.10.B, 1.11.B, 1.14.B.
82 Benton County, Indiana, Wind Farms, Benton County Wind Farm, accessed March 12, 2018.
83 EDP Renewables, Indiana-Meadow Lake, accessed March 12, 2018.
84 American Wind Energy Association, Indiana Wind Energy, accessed March 12, 2018.
85 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.3.B, 1.14.B.
86 U.S. EIA, Electric Power Monthly (February 2018), Tables 1.3.B, 1.10.B, 1.15.B, 1.17.B.
87 Indiana Office of Energy Development, Overview of Renewable Energy Resources, Geothermal, Indiana Projects and Incentives, accessed March 12, 2018.
88 Smith, Casey, "Ball State Ends Coal Era with Smokestack Removal," The Daily News (August 25, 2017).
89 Ball State University, Geothermal Energy System, Nation's Largest Project of Its Kind Goes Live, accessed March 12, 2018.
90 NC Clean Energy Technology Center, DSIRE, Net Metering, Indiana, updated August 18, 2017.
91 Indiana Utility Regulatory Commission, 2017 Annual Report, p. 31.
92 NC Clean Energy Technology Center, DSIRE, Net Metering, Indiana, updated August 18, 2017.
93 Indiana Utility Regulatory Commission, 2017 Annual Report, p. 32.
94 Indiana Office of Energy Development, Indiana Choice Program, accessed March 12, 2018.
95 Indiana Office of Energy Development, CHOICE Program FAQ, accessed March 12, 2018.
96 Indiana Utility Regulatory Commission, 2017 Annual Report, p. 37.