U.S. Energy Supply and Use: Background and Policy Primer
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U.S. Energy Supply and Use:
Background and Policy Primer
March 14, 2024
Congressional Research Service
https://crsreports.congress.gov
R47980
SUMMARY
U.S. Energy Supply and Use:
Background and Policy Primer
Since the start of the 21st century, the U.S. energy system has changed tremendously.
Technological advances in energy production and use have driven changes in energy
consumption, and the United States has moved from being a net importer of energy to a declining
importer—and a net exporter on an annual basis starting in 2019. The United States remains the
second-largest producer and consumer of all forms of energy in the world, behind China.
R47980
March 14, 2024
Brent D. Yacobucci,
Coordinator
Section Research Manager
Overall energy consumption in the United States has held relatively steady since 2000, while the mix of energy sources has
changed. Between 2000 and 2022, consumption of natural gas and renewable energy increased, while oil and nuclear power
were relatively flat and coal decreased. For each of these sources, production moved in the same direction as consumption,
except for oil, which has seen steady production increases since the mid-2000s. Overall U.S. energy production increased by
46% from 2000 to 2022.
Increases in the production of oil and natural gas are due in part to technological improvements in hydraulic fracturing and
horizontal drilling that have facilitated access to resources in unconventional formations (e.g., shale). U.S. oil production
(including natural gas liquids and crude oil) and natural gas production hit record highs in 2022.
Oil, natural gas, and other liquid fuels depend on a network of over three million miles of pipeline infrastructure. Increases in
fuel production led to a realignment of the U.S. pipeline network, which expanded by an additional 63,000 miles of
transmission pipeline between 2005 and 2022. The trajectory of future pipeline development is uncertain due to ongoing
permit challenges and litigation for current pipeline expansion efforts.
Coal, used primarily for electricity generation, supplied 19% of electricity generation in 2022, while overall consumption
declined by 54% since 2007 (the most recent peak) in the face of increasing competition from natural gas and renewables. A
new conventional nuclear reactor began operation in June 2023, with its twin unit scheduled to start up in 2024. Because of
concerns over cost and safety of conventional nuclear reactors, much congressional attention has focused on the development
of advanced reactors, including small modular reactors (SMRs).
The electric power industry faces uncertainty over how to address reliability within an environment of aging infrastructure,
retiring power plants, potential cybersecurity threats, and continued interest in renewable energy and other low carbon
sources of electricity. Reliability and electricity prices can be affected (positively and negatively) by environmental
regulations, the rising availability of natural gas for electricity generation, and increased use of renewables. As with pipelines,
many efforts at transmission expansion have faced permitting challenges and litigation in recent years.
Renewable energy consumption doubled between 2000 and 2022, primarily due to increased use of wind and solar for
electric power generation and biofuels for transportation. Non-hydroelectric renewable sources have comprised the majority
of electric generation capacity additions each year since 2015, except for 2018.
Adoption of energy-efficiency technologies in buildings, transportation, and industry may support policy objectives toward
energy security, lowering emissions, and reducing energy consumption (e.g., consumers saving money, avoiding greenhouse
gas emissions). Policy options include mandatory efficiency standards and programs encouraging adoption of existing
technologies, among others. Resulting changes in energy consumption may also be impacted by changes in demand for
energy services.
There is also growing interest in the development of hydrogen fuel for a range of applications, including transportation,
electric grid energy storage, and industrial uses.
Congress has been interested in the U.S. energy system for decades. Major legislation in the 117th Congress established and
expanded research and development, grants and loans, and tax incentives for a range of energy technologies, including
consumer appliances, zero-carbon electricity, nuclear power, sustainable aviation fuel, and carbon capture and storage.
Current topics of concern to Congress include reliability and resilience, infrastructure, efficiency, exports, imports, prices,
energy independence, security, and geopolitics, as well as environmental and climate effects.
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U.S. Energy Supply and Use: Background and Policy Primer
Contents
Introduction: Steady Growth ........................................................................................................... 1
Issues for Congress .......................................................................................................................... 1
Policy Goals .............................................................................................................................. 1
COVID-19 ................................................................................................................................. 2
Comprehensive Energy Legislation .......................................................................................... 2
Federal Incentives ..................................................................................................................... 3
117th Congress: Expanded Appropriations and Incentives ........................................................ 3
118th Congress, 1st Session: IIJA/IRA Implementation, Permitting Reform, Critical
Minerals/Materials, and Nuclear Energy ............................................................................... 3
U.S. Energy Profile.......................................................................................................................... 4
Crude Oil and Petroleum Products: Increased Production and Exports .......................................... 6
Crude Oil and Natural Gas Liquids Production ........................................................................ 7
Oil Transportation and Storage ................................................................................................. 8
Oil Refining............................................................................................................................... 9
Petroleum Trade ........................................................................................................................ 9
Oil and Petroleum Product Prices ........................................................................................... 10
Natural Gas: The United States Is a Global Player......................................................................... 11
U.S. Supply ............................................................................................................................. 12
U.S. Consumption ................................................................................................................... 12
U.S. Exports ............................................................................................................................ 13
Natural Gas Liquids ................................................................................................................ 13
Pipelines: The Backbone of U.S. Oil and Gas Supply .................................................................. 14
Pipeline Network Expansion from the Shale Boom................................................................ 16
Challenges to Pipeline Network Expansion ............................................................................ 17
Coal: An Industry in Decline ......................................................................................................... 18
Coal Reserves and Production ................................................................................................ 18
Coal Consumption................................................................................................................... 20
Coal Exports ............................................................................................................................ 21
U.S. Coal-Producing Industry ................................................................................................. 22
The Electric Power Sector: In Transition ...................................................................................... 23
Supply and Demand ................................................................................................................ 23
U.S. Consumption ................................................................................................................... 25
Nuclear Power: Federal Support for Advanced Reactors .............................................................. 26
Renewable Energy: Continued Growth ......................................................................................... 29
Renewable Transportation Fuels ............................................................................................. 31
Renewable Electricity ............................................................................................................. 32
Energy Efficiency: An Untapped Resource ................................................................................... 35
Efficiency in Buildings............................................................................................................ 37
Efficiency in Transportation .................................................................................................... 39
Efficiency in Industry and Manufacturing .............................................................................. 42
Possible Transition to Hydrogen ................................................................................................... 43
Hydrogen Production Pathways .............................................................................................. 43
Hydrogen “Colors”.................................................................................................................. 44
What a Hydrogen Economy Might Look Like........................................................................ 45
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U.S. Energy Supply and Use: Background and Policy Primer
Figures
Figure 1. U.S. Primary Energy Consumption and Production by Fuel, 2005-2022 ........................ 5
Figure 2. U.S. Crude Oil Production, NGL Production, and WTI Spot Price ................................. 8
Figure 3. U.S. Petroleum Imports, Exports, and Trade Balance.................................................... 10
Figure 4. Monthly U.S. Natural Gas Prices .................................................................................... 11
Figure 5. U.S. Natural Gas Supply and Demand, 2010-2022........................................................ 12
Figure 6. U.S. Natural Gas Consumption by Sector, 2022 ............................................................ 13
Figure 7. U.S. Natural Gas Transmission and Hazardous Liquid Pipelines .................................. 14
Figure 8. Annual U.S. Natural Gas Transmission Capacity Expansion and New
Construction ............................................................................................................................... 17
Figure 9. Coal Mining Employment, 1985-2022 .......................................................................... 20
Figure 10. U.S. Net Electricity Generation by Fuel, 2000-2022 ................................................... 25
Figure 11. U.S. Operating Commercial Nuclear Power Reactors ................................................. 29
Figure 12. Renewable Energy Consumption in the United States, 2000-2022 ............................. 30
Figure 13. Non-Hydro Renewable Electricity Generation, 2000-2022 ......................................... 34
Figure 14. Electric Power Capacity Additions, 2000-2022 ........................................................... 34
Figure 15. U.S. Total Energy Consumption by Sector 2000-2022 ................................................ 36
Figure 16. Estimated U.S. Delivered Building Energy Consumption by End Use, 2022 ............. 38
Figure 17. U.S. Transportation Sector Energy Use by Mode in 2022 ........................................... 40
Figure 18. U.S. Industrial Sector Energy Consumption in 2022 ................................................... 42
Figure C-1. Estimated U.S. Energy Consumption in 2022: 100.3 Quadrillion British
Thermal Units (Quads) ............................................................................................................... 52
Tables
Table 1. U.S. Hazardous Liquid and Natural Gas Pipeline Mileage, 2022 ................................... 15
Table 2. U.S. Coal Production, Consumption, and Exports, 2000-2022 ....................................... 21
Table 3. Leading U.S. Coal Producers and Percentage of U.S. Coal Production .......................... 23
Table 4. U.S. Renewable Energy Consumption by Sector and Source, 2022................................ 31
Table B-1. Selected Energy Related Laws .................................................................................... 50
Appendixes
Appendix A. Selected U.S. Government Entities and Their Energy-Related Roles...................... 48
Appendix B. Selected Energy Laws .............................................................................................. 50
Appendix C. U.S. Energy Consumption........................................................................................ 52
Appendix D. List of Abbreviations ............................................................................................... 53
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Contacts
Author Information........................................................................................................................ 54
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U.S. Energy Supply and Use: Background and Policy Primer
Introduction: Steady Growth
The United States has been an integral part of the global energy sector for many decades. It is a
leader in energy production, consumption, and technology, and its energy market is highly
sophisticated. Its energy prices, for the most part, are determined in the marketplace and rise or
fall with changes in supply and demand. The United States is a major producer of all forms of
energy—oil, natural gas,1 coal, nuclear power, and renewable energy.
Since the beginning of the 21st century, the U.S. energy sector has transformed from a situation of
declining production, especially of oil and natural gas, to one in which the United States is a
growing producer. Exports of energy are rising while imports are falling. It has also been a
situation of growing renewable energy supplies and increasing efficiency of energy use. Prices,
technology, and regulations have prompted changes in the energy mix.
This report provides an overview of U.S. energy issues, and it serves as an initial resource
document for related information, data, and CRS analytical contacts. The report is organized
around the major fuels and energy sources used in the United States. It also highlights the role of
the federal government, particularly in incentivizing new and conventional energy supplies. It
does not focus on security, research and development, or environmental issues, although those
subjects are also critical to the U.S. energy sector.
Issues for Congress
Policy Goals
Energy policy is a perennial concern for Members of Congress. Energy supply and consumption
are key drivers of economic activity. There is ongoing debate over U.S. energy policy given the
wide range of possible energy sources; their availability in terms of domestic vs. foreign
resources; the economic costs and benefits of developing those resources; and the effects (e.g.,
economic, environmental, social) of their use. Additionally, environmental policy has a major
effect on the energy sector, especially fuel use.
The United States has access to a wide range of energy sources, including fossil fuels (e.g., coal,
petroleum, and natural gas), nuclear, and renewables (e.g., wind, solar, hydropower, geothermal,
biomass). In addition, increases in energy efficiency have allowed the United States to produce
more economic output while consuming the same amount of energy, extending existing supplies.
Different U.S. sectors employ different sources. For example, nuclear energy is used exclusively
in electric power generation, along with other sources, while the transportation sector is largely
dependent on petroleum in the form of gasoline, diesel fuel, and jet fuel.
The energy profile has changed dramatically in recent years. Coal had been the predominant fuel
for electric power generation for decades, but between 2000 and 2022, natural gas-fired power
generation nearly tripled. Over the same time, non-hydroelectric renewable energy grew by
1 Throughout this report, natural gas figures are reported for dry production. Dry production refers to natural gas
production with gas liquids and nonhydrocarbon gases removed.
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nearly eight times.2 There is a growing market for electric passenger vehicles, although they do
not currently represent a significant share of transportation energy use.3
The shift in energy use over time has led to a decrease in total U.S. energy-related carbon dioxide
(CO2) emissions. Since peaking in 2007, annual emissions have decreased roughly 12% through
the end of 2022.4 Much of this decrease has been a result of changes in the electricity sector,
where coal use has decreased, replaced by lower-carbon natural gas and renewable generation.
The economic downturn in 2008-2009 also played a role as energy consumption is correlated
with economic activity.
COVID-19
The Coronavirus Disease 2019 (COVID-19) pandemic and subsequent response upended many of
the ways that businesses, schools, and households operated day to day. Economic activity, which
partly drives energy consumption, declined. These factors led to significant shifts in how
Americans consumed energy. For example, U.S. consumption of petroleum products (including
gasoline and diesel fuel) fell by more than 30% from the start of 2020 through mid-March 2020.5
Annual petroleum consumption decreased by 12% from 2019 to 2020.6 Likewise, some areas of
the country saw decreases in electricity demand as businesses were shut down in response to
COVID-19 mitigation.7 Across the United States, electricity consumption decreased by 3.8% in
2020. In both cases, consumption rebounded in 2021 and 2022 nearing (petroleum) or exceeding
(electricity) 2019 levels.8
Comprehensive Energy Legislation
Energy policy has often been legislated in large bills that deal with a wide variety of issues, with
debate spanning several sessions. The Energy Policy Act of 2005 (EPAct 2005; P.L. 109-58) was
a comprehensive general law, with provisions and authorizations in almost all areas of energy
policy. The Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) set new target
fuel economy standards for cars and light trucks, and expanded the Renewable Fuel Standard
(RFS). EISA also included energy efficiency standards for appliances and other equipment, and
provisions on industrial and building efficiency, which have continued to be of interest to many
Members.
In the 116th Congress, both the House and Senate debated large energy bills, with the House
passing one bill and the Senate debating another on the floor. Neither bill was enacted by the end
of the 116th Congress. Provisions from those bills (S. 2657 and H.R. 4447) were incorporated into
2 U.S. Energy Information Administration (EIA), Electric Power Annual 2010, Table 2.1.A, November 2011, and EIA,
Monthly Energy Review, March 2023.
3 Javier Colato and Lindsey Ice, Charging into the Future: The Transition to Electric Vehicles, Bureau of Labor
Statistics, Beyond the Numbers, vol. 12, no. 4, February 2023, https://www.bls.gov/opub/btn/volume-12/charging-intothe-future-the-transition-to-electric-vehicles.htm.
4 EIA, U.S. Energy-Related Carbon Dioxide Emissions, 2022, November 29, 2023, https://www.eia.gov/environment/
emissions/carbon/.
5 Jesse Barnett, COVID-19 Mitigation Efforts Result in the Lowest U.S. Petroleum Consumption in Decades, EIA, April
23, 2020, https://www.eia.gov/todayinenergy/detail.php?id=43455.
6 EIA, Short-Term Energy Outlook, March 9, 2021, https://www.eia.gov/outlooks/steo/.
7 April Lee and Jonathan DeVilbiss, Daily Electricity Demand Impacts from COVID-19 Mitigation Efforts Differ by
Region, EIA, March 7, 2020, https://www.eia.gov/todayinenergy/detail.php?id=43636.
8 EIA, Monthly Energy Review, Table 7.1, “Electricity Overview,” and Table 3.1, “Petroleum Overview,” October
2023.
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the Consolidated Appropriations Act, 2021 (P.L. 116-260). Division Z, the Energy Act of 2020,
promotes increased energy efficiency in homes, schools, and federal buildings; expands research
and development in nuclear energy, energy storage, electric vehicles, renewable energy, and
carbon capture utilization and storage (CCUS); and promotes energy storage development.
Federal Incentives
Often, federal energy policy goals are implemented through direct and indirect incentives for
preferred energy sources and/or technologies. These include direct agency research and
development, as well as federal grants and loans for research, development, and demonstration by
universities, state and local agencies, and private entities. Tax incentives support the deployment
of a range of technologies, including electric vehicles, wind and solar power, and carbon capture
and storage. Indirect incentives include federal mandates for the use of biofuels in transportation,
and efficiency requirements for appliances, commercial equipment, and automobiles. Various
analytical groups, including the U.S. Energy Information Administration (EIA), have quantified
the effects of some of these incentives.9
117th Congress: Expanded Appropriations and Incentives
The 117th Congress enacted three key pieces of energy legislation. The Infrastructure Investment
and Jobs Act (IIJA, P.L. 117-58) authorized and appropriated funds for a wide range of
infrastructure projects, including approximately $76 billion for energy and minerals-related
research, demonstration, technology deployment, and incentives.10 IIJA appropriations provisions
included funding for many of the programs authorized in the Energy Act of 2020. P.L. 117-167,
commonly referred to as the CHIPS and Science Act, appropriated funds to support the domestic
production of semiconductors and authorized various programs and activities of the federal
science agencies, including the Department of Energy. P.L. 117-169, commonly referred to as the
Inflation Reduction Act (IRA), was a wide-ranging law. Among other provisions, the IRA
established new and expanded tax credits and other incentives for a range of energy technologies,
including consumer appliances, zero-carbon electricity, nuclear power, sustainable aviation fuel
(SAF), electric vehicles, and clean hydrogen.
118th Congress, 1st Session: IIJA/IRA Implementation, Permitting
Reform, Critical Minerals/Materials, and Nuclear Energy
Fewer energy-related laws have been enacted in the 1st Session of the 118th Congress, although
Congress has continued to demonstrate interest in energy policy. As noted above, legislation in
the 117th Congress established or expanded tax incentives and grant/loan programs for a range of
energy technologies and applications. In many cases, federal agencies distributed funds and/or
issued guidance on program implementation; however, many programs (including state-run
programs) had not distributed funds to recipients as of the end of 2023. Other topics of committee
hearings and introduced legislation include expedited review or automatic granting of permits for
new energy projects, including pipelines, electric power transmission, and liquefied natural gas
exports. There have also been multiple hearings and bills aimed at addressing U.S. supplies of
lithium, rare earth elements, and other minerals and materials critical for the expansion of electric
9 See, for example, EIA, Federal Financial Interventions and Subsidies in Energy in Fiscal Years 2016-2022,
https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf.
10 For a detailed discussion of energy provisions in the IIJA, see CRS Report R47034, Energy and Minerals Provisions
in the Infrastructure Investment and Jobs Act (P.L. 117-58), coordinated by Brent D. Yacobucci.
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vehicles, wind and solar power, and other energy technologies. Legislation supporting U.S.
production of nuclear fuel was enacted by Congress on December 14, 2023, in the National
Defense Authorization Act for FY2024 (P.L. 118-31).
A Note on Data Availability
In most cases, this report includes data from the U.S. Energy Information Administration (EIA), which provides
authoritative data on many aspects of the U.S. energy system. In many cases, full annual data may not be available
for several months following the end of a calendar year. For consistency, and to allow comparisons, this report
includes data through the end of calendar year 2022.
U.S. Energy Profile
The United States is the second-largest producer and consumer of energy in the world, behind
China.11 U.S. primary energy consumption (see Figure 1) has held relatively steady since 2005;
however, the fuel mix has changed. While oil has remained at almost 40% of the fuel mix, natural
gas and renewables have increased in both percentage and absolute terms while coal consumption
declined. Nuclear generation has stayed flat.
U.S. energy production between 2005 and 2022 increased 46%, altering the previous position of
the United States as a growing importer of energy. (See Figure 1.) Crude oil production has
increased by 104% during the time frame, while natural gas production increased by 90%. The
increase in production of oil and natural gas resources comes from innovations in extraction from
unconventional (or tight) formations, such as shale (see shaded box below, “Unconventional
Shale Resources Make the Difference”). Renewable energy production (including hydropower)
has grown nearly 98%, led by increases in wind and solar power. Domestic coal production, on
the other hand, has declined during the same period by about 48%.
11 EIA, International Overview, https://www.eia.gov/international/overview/world, accessed October 23, 2023; Energy
Institute, Statistical Review of World Energy 2023, 2023. (Before 2023, this report was published by BP.)
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Figure 1. U.S. Primary Energy Consumption and Production by Fuel, 2005-2022
Quadrillion Btu (Quads)
Sources: Data compiled by CRS from U.S. Energy Information Administration (EIA), Monthly Energy Review,
October 26, 2023, Table 1.3, “Primary Energy Consumption by Source”; and EIA, Monthly Energy Review,
October 26, 2023, Table 1.2, “Primary Energy Production by Source.”
Note: Renewable includes hydropower, geothermal, solar, wind, and biomass (including biofuels). Petroleum
includes natural gas plant liquids. For a definition of “primary energy,” see EIA Glossary at https://www.eia.gov/
tools/glossary/index.php?id=Primary%20energy.
Unconventional Shale Resources Make the Difference
The United States saw a rise in natural gas and oil production starting in 2006 and 2008, respectively, driven
mainly by technology improvements—especially in hydraulic fracturing and directional drilling—which have
enabled the extraction of oil and gas from unconventional shale formations. The United States has been the
world’s largest producer of natural gas since 2009 and of petroleum liquids since 2014, according to the BP
Statistical Review of World Energy 2020. Production from shale and tight formations comprised 74% of U.S.
natural gas production in 2022 and 66% of oil production. The contribution of unconventional shale resources to
both oil and natural gas production in the United States is likely to continue to grow.
Determination of whether a formation is unconventional or conventional depends on its geology. Unconventional
formations typically are fine-grained, organic-rich, sedimentary formations—usually shales and similar rocks. These
unconventional formations are both the source of and the reservoir for oil and natural gas, unlike conventional
petroleum reservoirs, which trap oil and gas that have migrated to the reservoir from a different source.
The Society of Petroleum Engineers describes “unconventional resources” as petroleum accumulations that are
pervasive throughout a large area and are not significantly affected by pressure exerted by water (hydrodynamic
influences); they are also called “continuous-type deposits” or “tight formations.”12 Although the unconventional
formations may be as porous as other sedimentary reservoir rocks, their extremely small pore sizes and lack of
permeability (i.e., connectivity between the pores) means that the oil and gas are not recoverable through
conventional means of extraction. Instead, hydraulic fracturing technology combined with horizontal drilling
creates new fractures, or extends existing fractures, enhancing permeability and enabling the oil and gas to flow to
the well and up to the surface.
In contrast, conventional oil and natural gas deposits formed as hydrocarbons migrated from organic-rich source
rocks into porous and permeable reservoir rocks, such as sandstones and carbonates. The hydrocarbons
remained in the reservoir rocks because they were trapped beneath an impermeable cap-rock (such as shale). The
trapped oil and gas can flow into a well drilled through the cap-rock and into the reservoir rock under natural
pressure, or by using conventional enhancement techniques such as flooding the reservoir with water.
12 Society of Petroleum Engineers, Glossary of Terms Used in Petroleum Reserves/Resources Definition,
http://www.spe.org/industry/docs/GlossaryPetroleumReserves-ResourcesDefinitions_2005.pdf.
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Conventional enhancement techniques such as water flooding are ineffective in unconventional shale formations
because of their low permeability.
The change in the U.S. consumption fuel mix has occurred primarily in the electricity sector,
where fuel substitutes are most readily available (see “The Electric Power Sector: In Transition”).
Electric power generation in 2022 came from coal (19%), natural gas (39%), nuclear (18%),
renewables (23%),13 and petroleum (<1%), according EIA.14 In 2005, coal accounted for
approximately 50% of the electricity fuel mix, natural gas and nuclear were 19% each, and
renewables were 9%.15
Industrial use of energy has also experienced changes in recent years, but not to the same degree
as electric power generation. Energy in transportation remains dominated by petroleum, which
made up 90% of the fuel used in transportation in 2022, compared with 97% in 2000 and 96% in
2005.16
Crude Oil and Petroleum Products:
Increased Production and Exports17
Access to crude oil and petroleum products (e.g., gasoline, diesel fuel, heating oil, and jet fuel) at
reasonable prices has been an element of U.S. energy, national security, and economic policy for
decades. Geopolitical events, along with domestic price and allocation control policies, in the
1970s resulted in reduced U.S. access to world oil supplies, rapidly escalating prices, mandatory
rationing, and localized shortages. Combined with an outlook at that time for increasing U.S. oil
demand, decreasing domestic production, and high import dependency, these circumstances
facilitated enactment of landmark legislation such as the Energy Policy and Conservation Act
(EPCA, P.L. 94-163) in 1975.18 EPCA policies that have affected the oil sector include the
Strategic Petroleum Reserve (SPR),19 which still exists, and a crude oil export prohibition that
was repealed in 2015.20
Petroleum product consumption in the United States, which has been relatively stable since 2000,
was approximately 20.0 million barrels per day (bpd) during 2022, roughly 20% of global
demand and more than any other country. The transportation sector, which accounts for
approximately 68% of U.S. petroleum consumption, is largely dependent on oil.
Notable changes in the U.S. oil sector since 2000 include a doubling of crude oil production,
expansion of U.S. refining capacity, and nearly balanced petroleum trade (imports minus exports;
13 In this report, renewables refer to hydropower, biofuels, wood biomass, wind, waste, solar, and geothermal energy.
14 EIA, Monthly Energy Review, March 28, 2023, Table 7.2a, “Electricity Net Generation: Total (All Sectors).”
15 Data for 2000-2010 from EIA, Electric Power Annual 2010, Table 2.1.A, November 2011; and data for 2011-2019
from EIA, Electric Power Monthly, Table 1.1, July 2020. For comparison, in 2000, coal accounted for approximately
52%; natural gas, 16%; nuclear, 20%, and renewables, 9%.
16 EIA, Monthly Energy Review, October 26, 2023, Table 2.5, “Transportation Sector Energy Consumption.”
17 Phillip Brown, CRS Specialist in Energy Policy, is the author of this section.
18 EPCA, as amended, is available at 42 U.S.C. §6201 et seq.
19 For additional information, see CRS Insight IN12110, Strategic Petroleum Reserve Crude Oil Sales: Buyers and
Exports, by Phillip Brown and Claire Mills; and DOE, “Strategic Petroleum Reserve,” https://www.energy.gov/ceser/
strategic-petroleum-reserve.
20 For additional information, see CRS Report R44403, Crude Oil Exports and Related Provisions in P.L. 114-113: In
Brief, by Phillip Brown, John Frittelli, and Molly F. Sherlock.
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see Figure 3). Oil production in the United States for 2022 was larger than in any other country.21
U.S.-based oil refining capacity increased by 8.7%,22 with these assets generally recognized as
some of the most sophisticated and cost-competitive in the world. Annualized petroleum
exports—crude oil and products—from the United States increased by a factor of nine over the
last 22 years. These developments have affected global oil supply and prices, and at times
leveraged to impose economic sanctions on certain oil producing countries with the goal of
achieving foreign policy objectives.23
Crude Oil and Natural Gas Liquids Production
During 2022, companies operating in the United States produced approximately 11.9 million bpd
of crude oil. Combined with 5.9 million bpd of natural gas liquids (NGLs; see the “Natural Gas
Liquids” section, below), total production during the year was roughly 17.8 million bpd for these
petroleum liquids (see Figure 2).24 Oil production in the United States had been in general
decline for nearly 40 years (1970-2008). However, that downward trend reversed, primarily
through the application of horizontal drilling and hydraulic fracturing technology to access tight
oil (see shaded box on “Unconventional Shale Resources Make the Difference” above). Between
2008 and 2022, annual production of U.S. tight oil increased by nearly 8 million bpd. Tight oil
represented the largest portion of domestic production volume in 2022.25
21 Energy Institute, Statistical Review of World Energy 2023, 2023. (Before 2023, this report was published by BP.)
22 EIA, Refinery Utilization and Capacity, September 30, 2023, https://www.eia.gov/dnav/pet/
PET_PNP_UNC_A_(NA)_YRL_MBBLPD_A.htm.
23 For additional information, see CRS Report R46213, Oil Market Effects from U.S. Economic Sanctions: Iran, Russia,
Venezuela, by Phillip Brown.
24 For additional information about NGLs, see CRS Report R45398, Natural Gas Liquids: The Unknown
Hydrocarbons, by Michael Ratner.
25 EIA, Tight Oil Production Estimates by Play, https://www.eia.gov/energyexplained/oil-and-petroleum-products/data/
US-tight-oil-production.xlsx, accessed October 10, 2023.
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Figure 2. U.S. Crude Oil Production, NGL Production, and WTI Spot Price
Calendar Years 2000-2022
Source: CRS analysis of U.S. Energy Information Administration oil production, NGL production, and price data.
Notes: Production numbers represent annual averages. Prices reflect calendar monthly averages. WTI = West
Texas Intermediate. Bpd = barrels per day. NGLs = Natural Gas Liquids. RHS = Right Hand Side. Numbers may
not sum due to rounding.
Oil Transportation and Storage
Produced and imported crude oil is moved using various transportation modes (e.g., pipeline, rail,
barge, tanker, and truck) and is delivered to either oil refineries or commercial storage facilities
located throughout the United States.26 The majority of U.S. storage capacity is located in the
Gulf Coast region and the Midwest region, which includes nearly 78 million barrels of working
storage capacity in Cushing, OK.27 Cushing is the pricing location for West Texas Intermediate
(WTI) oil futures contracts frequently reported by news media. Most crude oil—both
domestically produced and imported—is delivered to refineries using pipeline infrastructure.
While relatively small volumes of crude oil are transported using the rail system, the rapid growth
26 For information about crude oil transportation modes, see EIA, Refinery Receipts of Crude Oil by Method of
Transportation, https://www.eia.gov/dnav/pet/pet_pnp_caprec_dcu_nus_a.htm, accessed March 7, 2022.
27 EIA, Working and Net Available Shell Storage Capacity as of March 31, 2023, https://www.eia.gov/petroleum/
storagecapacity/, accessed October 10, 2023.
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of this transportation mode between 2011 and 2014 resulted in increased congressional interest
and oversight of crude oil movements by rail.28
Oil Refining
Refineries convert crude oil into various intermediate and finished products (e.g., gasoline, diesel
fuel, jet fuel, heating oil, marine fuel, and asphalt), some of which are blended with other
petroleum liquids. Since 2000, the number of operable refineries in the United States declined by
approximately 18%, while operable capacity increased by approximately 9%. As of January 1,
2023, 129 refineries located in 30 U.S. states have capacity to process nearly 18 million barrels of
crude oil per calendar day.29 During 2022, U.S. refineries processed approximately 16.5 million
bpd.30 Since 2019, U.S. crude oil refining capacity and processing trended lower due to refinery
closures motivated by accidents and refining economics, as well as facility conversions to
produce renewable fuels. Approximately 45% of U.S. refining capacity is located along the Gulf
Coast areas of Texas and Louisiana. Refined petroleum products are stored, blended, transported
by various modes, and ultimately delivered and sold to consumers.
Many U.S. refineries have technically sophisticated configurations and equipment that allow for
upgrading low-quality crude oils with high sulfur content into high-value, low-sulfur petroleum
products. U.S. refineries have also enjoyed an operational cost benefit in the form of relatively
low-cost natural gas, which they use for process heat and sulfur removal. These configuration and
cost advantages contribute to the global competitiveness of the U.S. refining sector.
Petroleum Trade
U.S. petroleum trade balances—imports and exports—since 2000 have changed from large net
imports to a small net exports (see Figure 3). This trade balance shift is the result of increased
petroleum product exports combined with increasing crude oil exports enabled by legislation
enacted in 2015 (P.L. 114-113) that repealed crude oil export restrictions.31 While overall
petroleum trade is at a nearly balanced level, the United States continues to be one of the largest
crude oil importing countries and remains integrated with the global petroleum market.32 This
import trend could continue should sophisticated U.S. refiners choose to source crude oil with
quality characteristics that support optimized refining operations and petroleum product yields.
28 For additional information, see CRS Report R43390, U.S. Rail Transportation of Crude Oil: Background and Issues
for Congress, by John Frittelli et al.
29
EIA, Refinery Capacity Report, June 21, 2023, https://www.eia.gov/petroleum/refinerycapacity/. Refining capacity is
also reported in barrels per stream day, which represents maximum oil input without any downtime. Additional
information is available at https://www.eia.gov/tools/glossary/index.php?id=b.
30 EIA, Refinery Utilization and Capacity, https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_a.htm, accessed
October 10, 2023.
31 For additional information about repeal of the U.S. crude oil export prohibition, see CRS Report R44403, Crude Oil
Exports and Related Provisions in P.L. 114-113: In Brief, by Phillip Brown, John Frittelli, and Molly F. Sherlock. For
additional information about the U.S. crude oil export debate, see CRS Report R43442, U.S. Crude Oil Export Policy:
Background and Considerations, by Phillip Brown et al.
32 In 2019, the United States was the second-largest crude oil importing country. China was the largest. For additional
information, see EIA, China’s Crude Oil Imports Surpassed 10 Million Barrels per Day in 2019, March 23, 2020.
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Figure 3. U.S. Petroleum Imports, Exports, and Trade Balance
Calendar Years 2000-2022
Source: CRS analysis of U.S. Energy Information Administration petroleum import and export data.
Notes: “Other” includes hydrocarbon gas liquids, oxygenates, renewable fuels, blending components, and
unfinished oils. Bpd = barrels per day.
Oil and Petroleum Product Prices
Crude oil (see Figure 2) and petroleum product prices can exhibit volatile and erratic movements.
Numerous factors (e.g., global economic growth, Organization of the Petroleum Exporting
Countries production policies and compliance, geopolitical events, and natural disasters) can
affect petroleum market supply and demand balances, storage levels, futures prices, and
ultimately the price of physical oil commodities.33 Oil market characteristics—generally inelastic
supply and demand in the short term—can contribute to market conditions that could result in
volatile price movements (both up and down) when supply and demand are imbalanced by as
little as 1% to 2% for a brief or sustained period. Apart from a release of SPR crude oil to address
supply disruptions and associated economic dislocations, non-emergency statutory authorities that
could quickly affect global oil markets and prices are limited. Congressional interest in statutory
and legislative options tends to increase when crude oil and petroleum product (e.g., gasoline)
prices are deemed either too low for producers or too high for consumers.34
33 For additional information, see EIA, “What Drives Crude Oil Prices?,” https://www.eia.gov/finance/markets/
crudeoil/, accessed September 15, 2020.
34 During periods of low oil prices, policy options such as acquiring oil for the SPR, loans and loan guarantees, and
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Natural Gas: The United States Is a Global Player35
Russia’s war against Ukraine has brought to
the fore the strategic importance of natural
gas and the rising role of the United States. In
2022, the United States was the largest
producer, consumer, and exporter of natural
gas.36 This is, in part, because Russian
pipeline exports to Europe were largely
curtailed. The United States continues to
import relatively small amounts of natural gas
by pipeline from Canada and as liquefied
natural gas (LNG) from Trinidad & Tobago to
balance its regional demand.37 Globally, 2022
saw natural gas prices hit highs never before
reached. U.S. prices rose significantly (see
Figure 4), but not to the same heights as in
Europe and Asia.38 TTF, one of Europe’s
benchmark natural gas prices, and JKM,
Asia’s benchmark, reached $90.77 per million
British thermal unit (mmBtu) and $70.57
mmBtu in 2022, respectively, both record
highs. In February 2023, U.S. prices fell
below $3.00 and remained below that level
for the rest of the year.
Figure 4. Monthly U.S. Natural Gas Prices
Selected Years 2010-2023
Source: CRS analysis of U.S. Energy Information
Administration, Natural Gas Spot and Futures Prices
(NYMEX), updated December 15, 2023,
http://www.eia.gov/dnav/ng/ng_pri_fut_s1_m.htm.
Note: Prices are spot prices and in nominal dollars. Units
= dollars per million British thermal unit ($/mmBtu).
In response to the high prices, and in particular Europe’s need to replace Russian imports because
of the war, U.S. companies increased their exports of LNG. Additionally, U.S. government
officials sought to encourage LNG producers domestically and internationally to export as much
natural gas as possible to Europe. U.S. officials also asked LNG importers to forgo LNG cargos,
so that the cargos could be sent to Europe.
Since the advent of shale gas in the mid-2000s, U.S. natural gas production increased and prices
fell, while U.S. consumption of natural gas grew, rising about 38% from 2010 to 2022 (see
Figure 5). In many years, the rise in consumption did not keep pace with production, so
companies turned to exports, first by pipeline to Mexico and then as LNG to other parts of the
world. (See “U.S. Exports,” below.) As shown in Figure 5, domestic production and imports
(supply) of natural gas were greater than consumption and exports (demand) in several years.
imposing trade tariffs have been explored. For additional information, see CRS Insight IN11246, Low Oil Prices and
U.S. Oil Producers: Policy Considerations, by Phillip Brown and Michael Ratner. During periods of high oil and
petroleum product prices, legislation such as the No Oil Producing and Exporting Cartels (NOPEC) Act has been
introduced and debated. For additional information, see CRS In Focus IF11186, No Oil Producing and Exporting
Cartels (NOPEC) Act of 2019, by Phillip Brown.
35 Michael Ratner, CRS Specialist in Energy Policy, is the author of this section.
36 Energy Institute, Statistical Review of World Energy 2023, 2023. (Before 2023, this report was published by BP.)
37 Liquefied natural gas (LNG) is primarily methane that has been cooled to negative 260 degrees Fahrenheit. When
natural gas is cooled to this temperature its volume contracts by 600 times, making it economical to transport on a ship.
38 The spike in prices in February 2021 was caused by an extreme cold weather snap in the southern part of the United
States. Natural gas production was temporarily halted, causing a shortage of supply and prices to skyrocket.
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Figure 5. U.S. Natural Gas Supply and Demand, 2010-2022
Billion Cubic Feet
BCF
2020
2015
CONSUMPTION
Exports
Consumption
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
-
2010
2020
2015
2010
SUPPLY
Imports
Production
Source: CRS analysis of U.S. Energy Information Administration, http://www.eia.gov/naturalgas/data.cfm.
Note: Difference between the two columns for a given year in each chart is the volume of natural gas held in
storage.
U.S. Supply
The United States is the world’s largest producer of natural gas. Since 2010, U.S. natural gas
production rose almost every year through 2022, even as prices declined. Production resumed
growing in 2021 after a decline in demand because of the COVID-19 pandemic. It reached a new
high in 2022. The increase in natural gas production between 2010 and 2022 is mostly attributed
to the development of shale gas resources, specifically in the Marcellus and Utica formations in
the northeastern United States (primarily Pennsylvania, New York and West Virginia). Overall,
shale gas production accounted for 79% of total U.S. natural gas production in 2022;39 the
Marcellus and Utica formations in the northeast accounted for 40% of the U.S. shale gas
production.
U.S. Consumption
The United States is the largest consumer of natural gas in the world, using more than 29,000
billion cubic feet (BCF) in 2022. Electric power generation made up 42% of U.S. natural gas
consumption in 2022; industrial use accounted for 29%, residential use for 17%, and commercial
use for 12%.40 (See Figure 6.) Low natural gas prices, due to the growth of domestic gas
resources, contributed to a significant rise in the use of natural gas for electric power generation.
Additionally, some federal and state policies promote the use of fuels with lower greenhouse gas
39 EIA, Dry Shale Gas Production Estimates by Play, https://www.eia.gov/naturalgas/weekly/img/
202309_monthly_dry_shale.png, accessed October 10, 2023.
40 EIA, Natural Gas Consumption by End Use, https://www.eia.gov/dnav/ng/ng_cons_sum_dcu_nus_a.htm, accessed
September 30, 2023.
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(GHG) emissions. Consumption of natural gas for power generation grew about 64% between
2010 and 2022.41
The U.S. industrial sector increased its consumption of natural gas by 25% between 2010 and
2022.42 As the United States continues to expand its natural gas resource base, the industrial
sector will see a wider array of fuel and feedstock choices, and manufacturing industries could
also experience further growth.
U.S. Exports43
Between 2000 and 2008, the United States
prepared to increase imports of LNG based on
forecasts of growing consumption and flat
supply, and companies began constructing
LNG import terminals. However, the rise in
natural gas prices gave the industry incentive
to bring more domestic gas to market,
reducing the need for imports. From 2010 to
2022, U.S. natural gas imports declined
19%.44 Production surpassed consumption of
natural gas in 2011, negating the need for
growing imports.
The first U.S. LNG shipments from the lower
48 states occurred in February 2016 from the
Sabine Pass LNG Terminal in Louisiana.45 In
2017, the United States became a net exporter
of natural gas, the first time since 1957.
Natural Gas Liquids
Figure 6. U.S. Natural Gas Consumption
by Sector, 2022
Source: CRS analysis of U.S. Energy Information
Administration, Natural Gas Consumption by End Use,
http://www.eia.gov/dnav/ng/
ng_cons_sum_dcu_nus_a.htm, accessed December
15, 2023.
Note: Vehicle fuel represents roughly 0.2% of
consumption.
Most oil and gas wells produce a variety of hydrocarbons, including natural gas, oil, and natural
gas liquids (NGLs),46 as well as other gases and liquids (e.g., nitrogen, hydrogen sulfide, and
water) and particulate matter. NGLs have taken on a greater prominence as the price for “dry”
gas47 dropped, primarily because of the increase in natural gas supply. In response to the price
drop, the natural gas industry produced more “wet” gas48 in order to bolster the value it receives
41 EIA, Natural Gas Consumption by End Use, “U.S. Natural Gas Deliveries to Electric Power Consumers (Million
Cubic Feet),” https://www.eia.gov/dnav/ng/hist/n3045us2a.htm, accessed September 30, 2023.
42 EIA, Natural Gas Consumption by End Use, https://www.eia.gov/dnav/ng/ng_cons_sum_dcu_nus_a.htm, accessed
September 30, 2023.
43 For additional information on U.S. LNG exports, see CRS Report R42074, U.S. Natural Gas Exports: New
Opportunities, Uncertain Outcomes, by Michael Ratner et al.; and CRS In Focus IF10878, U.S. LNG Trade Rising, But
No Domestic Shipping, by Michael Ratner and John Frittelli.
44 EIA, U.S. Natural Gas Imports, https://www.eia.gov/dnav/ng/hist/n9100us2a.htm, accessed September 30, 2023.
45 The United States has exported LNG from Alaska since 1969.
46 NGL is a general term for all liquid products separated from the natural gas stream at a gas processing plant and
includes ethane, propane, butane, and pentanes. When NGLs are present with methane, which is the primary
component of natural gas, the natural gas is referred to as either “hot” or “wet” gas. Once the NGLs are removed from
the methane the natural gas is referred to as “dry” gas, which is what most consumers use.
47 Natural gas without associated liquids.
48 Natural gas with associated liquids.
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per well. Historically, individual NGL products prices, except for ethane, have been linked to oil
prices. When oil prices were high relative to dry gas, it drove an increase of wet gas production,
thereby maintaining production of dry gas as a “byproduct” despite its low price.
Pipelines: The Backbone of U.S. Oil and
Gas Supply49
The U.S. pipeline network is integral to the nation’s energy supply and provides vital links to
other critical infrastructure, such as power plants, refineries, airports, and military bases. These
pipelines are geographically widespread, running alternately through remote and densely
populated regions—from Arctic Alaska to the Gulf of Mexico and nearly everywhere in between.
The siting of interstate natural gas pipelines and U.S. pipeline border crossings is under federal
jurisdiction. The siting of all other pipelines, including interstate crude oil and refined products
pipelines, is under the jurisdiction of the states—although individual projects may still require
federal approval for specific segments, such as water crossings or routes through federal lands.
Figure 7. U.S. Natural Gas Transmission and Hazardous Liquid Pipelines
Source: National Pipeline Mapping System (NPMS), “Gas Transmission and Hazardous Liquid Pipelines,”
September 15, 2023, https://www.npms.phmsa.dot.gov/Documents/NPMS_Pipelines_Map.pdf.
Notes: Hazardous liquids primarily include crude oil, gasoline, jet fuel, diesel fuel, home heating oil, propane, and
butane. Other hazardous liquids transported by pipeline include anhydrous ammonia, carbon dioxide, kerosene,
liquefied ethylene, and some petrochemical feedstocks.
49 Paul Parfomak, CRS Specialist in Energy Policy, is the author of this section.
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The onshore U.S. energy pipeline network is composed of approximately 3.3 million miles of
pipeline transporting natural gas, oil, and other hazardous liquids (Figure 7 and Table 1). Of the
nation’s approximately half-million miles of long-distance transmission pipeline, roughly 230,000
miles carry hazardous liquids—over 80% of the nation’s crude oil and refined products—along
with other products.50 It also contains some 47,000 miles of crude oil gathering pipeline, which
connects extraction wells to processing facilities prior to long-distance shipment. The U.S. natural
gas pipeline network consists of around 301,000 miles of transmission and 434,000 miles of
gathering lines. The natural gas transmission pipelines feed around 2.3 million miles of regional
pipeline mains in some 1,500 local distribution networks serving over 70 million customers.51
Table 1. U.S. Hazardous Liquid and Natural Gas Pipeline Mileage, 2022
Category
Miles
Hazardous Liquids Transmission
229,374
Hazardous Liquids Gathering (2021)
47,126
Natural Gas Transmission
300,796
Natural Gas Gathering (2021)
434,076
Natural Gas Distribution Mains and Service Lines
2,321,509
TOTAL
3,332,881
Source: Hazardous liquids transmission, natural gas transmission, and natural gas distribution mains and service
lines mileage is from PHMSA, “Annual Report Mileage Summary Statistics,” web tables, October 2, 2023,
http://www.phmsa.dot.gov/portal/site/PHMSA/menuitem.7c371785a639f2e55cf2031050248a0c/?vgnextoid=
3b6c03347e4d8210VgnVCM1000001ecb7898RCRD&vgnextchannel=
3b6c03347e4d8210VgnVCM1000001ecb7898RCRD&vgnextfmt=print. Hazardous liquids and natural gas
gathering lines mileage is from Environmental Protection Agency, “Inventory of U.S. Greenhouse Gas Emissions
and Sinks 1990-2020: Updates Under Consideration for Activity Data,” memorandum, September 2021, p. 3,
https://www.epa.gov/system/files/documents/2021-09/2022-ghgi-update-activity-data_sept-2021.pdf. PHMSA also
estimates “that there are over 400,000 miles of onshore gas gathering lines throughout the U.S.” See 86 Federal
Register 2017, November 15, 2021.
Notes: Hazardous liquids gathering mileage is for crude oil pipelines. The most recent comprehensive data for
gathering pipelines comes from 2021; these data have not been updated. See note on hazardous liquids in
Figure 7.
Natural gas pipelines also connect to 173 active liquefied natural gas storage sites, as well as
underground storage facilities, both of which can augment pipeline gas supplies during peak
demand periods.52
The oil pipeline infrastructure of the United States is fully integrated with that of Canada. Six
major pipeline systems link oil-producing regions, refineries, and intermediate storage and
transportation hubs in both countries. Although Canada-U.S. cross-border oil pipelines have been
in place since the 1950s, pipeline capacity from Canada to the United States experienced a period
of rapid growth between 2010 and 2015. During this time several cross-border pipelines were
constructed and others were rebuilt or significantly expanded to provide increased takeaway
50 Bureau of Transportation Statistics, “Crude Oil and Petroleum Products Transported in the United States by Mode,”
https://www.bts.gov/content/crude-oil-and-petroleum-products-transported-united-states-mode, accessed January 10,
2022.
51 PHMSA, “Annual Report Mileage for Gas Distribution Systems,” October 2, 2023, https://www.phmsa.dot.gov/dataand-statistics/pipeline/annual-report-mileage-gas-distribution-systems.
52 PHMSA, “Liquefied Natural Gas (LNG) Facilities and Total Storage Capacities,” October 2, 2023,
https://www.phmsa.dot.gov/data-and-statistics/pipeline/liquefied-natural-gas-lng-facilities-and-total-storage-capacities.
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capacity from the growing crude oil production in the Canadian oil sands. By comparison, U.S.
liquid fuel pipeline connections to Mexico are limited, with several small-diameter pipelines
between the two countries used primarily for U.S. refined product exports. Unlike oil, which is
readily moved by vessels, railcars, and trucks, natural gas is transported among the United States,
Canada, and Mexico almost entirely by pipeline. There are over 50 individual gas pipelines
linking the United States and its neighbors at 24 border crossings to Canada and 19 border
crossings to Mexico.
Pipeline Network Expansion from the Shale Boom
The rapid growth of U.S. natural gas and crude oil production from shale in the mid-2000s has
led to a corresponding realignment and expansion of the nation’s pipeline system. Developers and
operators have invested billions of dollars to connect major new production regions, such as the
Marcellus (Pennsylvania) and Bakken (North Dakota) shale basins, to traditional oil and gas
markets. They have converted, reversed, and expanded existing pipelines; added relatively short
laterals to supply new wholesale customers; and developed entirely new long-haul pipelines to
fundamentally reconfigure oil and natural gas flows throughout North America.
Between 2005 and 2021, developers added nearly 63,000 miles of hazardous liquids transmission
pipeline in the United States, an increase of approximately 38% in total reported mileage, not
counting the expansion of capacity on existing pipelines.53 During roughly the same period, total
mileage for U.S. natural gas transmission grew 1%, in part due to retirements and conversions
(i.e., to transport crude oil), but there were major investments to expand the capacity of existing
lines and to construct major new connections to key markets. Altogether, developers expanded or
constructed over 38,000 miles of interstate natural gas transmission between 2005 and 2022, most
of it in the years immediately after the initial commercialization of shale gas resources (Figure
8).
53 PHMSA, “Annual Report Mileage for Hazardous Liquid or Carbon Dioxide Systems,” web table, October 2, 2023,
https://www.phmsa.dot.gov/data-and-statistics/pipeline/annual-report-mileage-hazardous-liquid-or-carbon-dioxidesystems.
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Figure 8. Annual U.S. Natural Gas Transmission Capacity Expansion and New
Construction
Pipeline Mileage
Source: CRS analysis of U.S. Energy Information Administration (EIA), “U.S. Natural Gas Pipeline Projects,”
online spreadsheet, accessed February 24, 2023, https://www.eia.gov/naturalgas/pipelines/EIANaturalGasPipelineProjects.xlsx. EIA’s figures are based on its analysis of regulatory filings and industry reports.
Notes: Capacity expansion may include adding a parallel line, increasing pipeline diameter, or adding additional
compressor stations along a pipeline route to increase carrying capacity.
Although changes in the U.S. economy due to the COVID-19 pandemic and the war in Ukraine
have temporarily disrupted global and domestic demand for gas, if long-term trends continue,
some industry analysts expect continued expansion of U.S. gas pipeline infrastructure. A 2018
analysis by the INGAA Foundation, a pipeline industry research organization, projected the need
for approximately 26,000 miles (1,400 miles annually) of new natural gas transmission pipeline
between 2018 and 2035; in 2018, INGAA reported that total capital expenditure for these projects
could range from $154 billion to $190 billion.54
Challenges to Pipeline Network Expansion
Over the last decade, proposals for new oil and natural gas transmission pipelines at both the
federal and state levels have been subjected to greater public scrutiny and have become
increasingly controversial. Many pipeline permit applications have faced significant challenges in
permit application review and are the subject of protracted litigation. Pipeline proponents have
based their support primarily on increasing the diversity of the U.S. energy supply and on
expected economic benefits, including oil and gas production jobs and near-term job creation
associated with pipeline construction and operation. Opponents, primarily environmental groups
and affected communities along pipeline routes, have objected to these projects principally on the
grounds that pipeline development has negative environmental impacts, disproportionately
impacts disadvantaged communities, and promotes continued U.S. dependency on fossil fuels. As
a result, major pipeline projects, especially natural gas projects in the Northeast and Mid-Atlantic,
54 INGAA Foundation, “North American Midstream Infrastructure Through 2035: Significant Development
Continues,” June 18, 2018, p. 48. The INGAA Foundation is affiliated with the Interstate Natural Gas Association of
America (INGAA), the interstate gas pipeline industry trade association.
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have been denied permits or have been cancelled by their developers due to regulatory
uncertainty, cost overruns, and unfavorable economics. Others, such as the Dakota Access
Pipeline and the Spire STL Pipeline, have been constructed but have been subject to permit
challenges and litigation. These complexities, and the potential for changing environmental
policies to address the climate impacts of fossils fuels, make the trajectory for future pipeline
development uncertain.
Coal: An Industry in Decline55
The U.S. coal industry has been declining for decades in part because of other fuels’
technological improvements and more competitive prices. The Trump Administration rolled back
or initiated reversing several coal-related regulations that were finalized under the Obama
Administration. This effort coincided with the emergence of three of the largest coal producers
from Chapter 11 bankruptcy, higher coal prices, lower inventories, and higher natural gas prices
(which have reverted in 2023)—factors that could improve coal’s competitiveness as a fuel for
electricity generation. However, in May 2023 the Biden Administration proposed new carbon
dioxide emission standards from fossil fuel power plants that could require coal plants to install
carbon capture technology, or to employ other emissions-reduction strategies such as co-firing
with natural gas or hydrogen.56 Coal will likely remain an essential component in the U.S. energy
picture, but how big a role it will play remains an open question.
Coal Reserves and Production
The United States has the largest coal reserves and resources in the world.57 EIA estimated in
2022 that there were about 12 billion short tons of recoverable domestic coal reserves, down from
15 billion short tons in 2018 and 17 billion short tons in 2001.58 The total demonstrated U.S.
reserve base (DRB) in 2022 was estimated at about 470 billion short tons, down from 499 billion
short tons in 2000.59 The majority of coal from Western states60 is produced from surface mines
(91%), while the majority of coal from Appalachian and Interior states is produced from
underground mines (82% and 67%, respectively).61
55 Lexie Ryan, Analyst in Energy Policy, and Brent Yacobucci, Section Research Manager, are the authors of this
section.
56 Environmental Protection Agency, Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants,
updated November 15, 2023, https://www.epa.gov/stationary-sources-air-pollution/greenhouse-gas-standards-andguidelines-fossil-fuel-fired-power.
57 BP, Statistical Review of World Energy, London, July 2021, p. 44. For something to be categorized a reserve, it must
be reasonably certain that it can be recovered in the future from known resources under existing economic and
operating conditions. It must also be able to reach a market. Reserves are a subset of resources, which is a broader
estimation.
58
A short ton, a measurement of weight often used in the United States, is 2,000 pounds. A metric ton, commonly used
internationally, is about 2,200 pounds (1,000 kilograms).
59 EIA, Annual Coal Report 2022, Washington, DC, October 2023, p. 25, https://www.eia.gov/coal/annual/pdf/acr.pdf,
and EIA, Coal Data Browser, Washington, DC, October 2023, https://www.eia.gov/coal/data/browser/#/topic/31?agg=
0,1&mntp=g&geo=vvvvvvvvvvvvo&linechart=COAL.RECOVER_RESERVE.TOT-US.A&columnchart=
COAL.RECOVER_RESERVE.TOT-US.A&map=COAL.RECOVER_RESERVE.TOT-US.A&freq=A&start=2001&
end=2022&ctype=linechart<ype=pin&rtype=s&maptype=0&rse=0&pin=.
60 Ibid. “The Western coal region includes Alaska, Arizona, Colorado, Montana, New Mexico, North Dakota, Utah,
Washington, and Wyoming.”
61 Ibid. “The Appalachian coal region includes Alabama, Eastern Kentucky, Maryland, Ohio, Pennsylvania, Tennessee,
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U.S. coal production and reserves are highly concentrated. EIA statistics show that more than half
of U.S. coal reserves are located in the West, with Montana and Wyoming together accounting for
42%. According to EIA, 41% of U.S. coal in 2021 was produced in Wyoming, while 14% came
from West Virginia.62 The top five producing states—Wyoming, West Virginia, Pennsylvania,
Illinois, and Kentucky—accounted for 73% of U.S. coal production in 2021.63
Even though U.S. coal production reached its highest level of production in 2008 (1.17 billion
short tons) and remained strong until 2014 (at or near 1 billion short tons per year), coal is losing
its share of overall U.S. energy production and consumption, primarily to natural gas in electricity
generation. Coal production declined 41% between 2014 and 2022 (see Table 2). EIA projections
show coal production continuing a steady decline through the 2020s, and remaining around 300
million short tons through the 2030s.64 The softening of demand for coal has been attributed to
utilities opting for low-cost natural gas, declining costs for renewable energy options, increasing
regulatory costs associated with coal-fired power plants, and lower demand for U.S. coal exports
(see Table 2). EIA projects long-term demand growth in the Asian coal market, but long-term
penetration of U.S. coal exports into this market remains uncertain.65
Coal mining employment declined from roughly 174,000 in 1985 to roughly 72,000 in 2000 (a
58% decline), then rose to a recent high of about 87,000 in 2011 before falling to roughly 40,000
in 2022 (see Figure 9).66 A similar pattern was true for the number of coal mines, as the majority
of the decline occurred between 1985 and 2000, when the number of coal mines fell by 55%
(from 3,355 to 1,513) before declining further by 64% from 2000 to 2022 (from 1,513 to 548).67
The number of coal mining firms has decreased in the United States, while the size of the average
mine and output per mine and per worker have increased.
Virginia, and West Virginia.... The Interior coal region includes Arkansas, Illinois, Indiana, Kansas, Louisiana,
Mississippi, Missouri, Oklahoma, Texas, and Western Kentucky.”
62 EIA, Coal Explained, October 19, 2022, https://www.eia.gov/energyexplained/coal/where-our-coal-comes-from.php.
63 Ibid.
64 EIA, Annual Energy Outlook 2023, Washington, DC, March 16, 2023, https://www.eia.gov/outlooks/aeo/. Based on
EIA’s reference case scenario.
65 EIA, Quarterly Coal Report, October-December 2017, April 2018, p. 11.
66 Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics Survey
(National), https://data.bls.gov/pdq/SurveyOutputServlet, accessed October 3, 2023.
67 EIA, Annual Coal Report 2022, Washington, DC, October 2023, p. 27, https://www.eia.gov/coal/annual/pdf/acr.pdf.
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Figure 9. Coal Mining Employment, 1985-2022
Source: Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics survey
(National), accessed October 3, 2023, https://data.bls.gov/pdq/SurveyOutputServlet.
Notes: Series title: all employees, thousands, coal mining, seasonally adjusted. Monthly data averaged over each
year.
Coal Consumption
Coal consumption in the United States was consistently near or over 1 billion short tons per year
from 2000 (peaking in 2007 at 1.128 billion short tons) until 2012, when demand fell below 900
million short tons (pre-1990 levels). As shown in Table 2, consumption has declined further since
2012, reaching 513 million short tons in 2022. EIA projects annual coal consumption to fall
below 200 million short tons by 2050. Power generation is the primary market for coal,
accounting for over 90% of total consumption. Other end uses for coal include production of iron
and steel.68 With the retirement of many coal-fired power plants and the building of new gas-fired
plants, there has been a structural shift in demand for U.S. coal. A structural shift would mean
long-term reduced capacity for coal-fired electric generation.69 Thus, coal could likely be a
smaller portion of total U.S. energy consumption for years to come. As noted earlier, in 2016,
natural gas overtook coal as the number-one energy source for power generation.
68 EIA, Monthly Energy Review, October 26, 2023, Section 6, https://www.eia.gov/totalenergy/data/monthly/pdf/
sec6.pdf.
69 The costs of modernizing older power plants to meet new regulatory requirements can be relatively high. When the
cost of upgrades to meet new environmental requirements is considered along with (perhaps increasing) operation and
maintenance expenses, many older coal power plants are likely to face retirement. EIA projects many more U.S. coalfired plants to be retired and replaced with natural gas and renewable energy facilities as coal plants become too
expensive to maintain or upgrade. Another consideration is the capacity factor (utilization) of coal plants. As they are
used less regularly (because renewables and natural gas outcompete them on cost), their revenue and profits decrease.
Operators may choose to retire an underutilized plant rather than maintain it.
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Table 2. U.S. Coal Production, Consumption, and Exports, 2000-2022
Million short tons
Year
Total Production
Total Consumption
Total Exports
2000
1,073.6
1,084.1
58.5
2001
1,127.7
1,060.1
48.7
2002
1,094.3
1,066.4
39.6
2003
1,071.8
1,094.9
43.0
2004
1,112.1
1,107.3
48.0
2005
1,131.5
1,126.0
49.9
2006
1,162.8
1,112.3
49.6
2007
1,146.6
1,128.0
59.2
2008
1,171.8
1,120.5
81.5
2009
1,075.0
997.5
59.1
2010
1,084.4
1,048.5
81.7
2011
1,095.6
1,002.9
107.3
2012
1,016.5
889.2
125.7
2013
984.8
924.4
117.7
2014
1,000.0
917.7
97.3
2015
896.9
798.1
74.0
2016
728.4
731.1
60.3
2017
774.1
716.9
96.9
2018
756.2
688.1
116.2
2019
706.3
586.5
93.8
2020
535.4
476.7
69.1
2021
577.4
545.7
85.1
2022
594.2
512.6
86.0
Source: EIA, Monthly Energy Review, July 2023, Table 6.1, https://www.eia.gov/totalenergy/data/monthly/pdf/
mer.pdf.
Notes: U.S. Coal production peaked in 2008 at 1,171.8 million short tons.
Coal Exports
One of the big questions for the industry is how to penetrate the overseas coal market, particularly
for steam coal,70 to compensate for declining domestic demand. EIA forecasts coal exports to
decline to 74 million short tons in 2021, before rising to about 100 million short tons per year out
to 2050.71 Exports to the Asian market are expected to increase, but there are potential bottlenecks
such as infrastructure (e.g., port development and transportation) that could slow export growth.
70 Steam coal is used to generate steam for electrical power plants, while metallurgical coal is used for steel production.
71 EIA, Annual Energy Outlook 2023, February 3, 2021, p. 13, https://www.eia.gov/outlooks/aeo/pdf/
AEO2023_Narrative.pdf.
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Several key factors are likely to influence how much coal will be exported from the United States
in the future, one of which is whether new export terminals are built, particularly for coal from
the Powder River Basin (PRB) in Wyoming and Montana. Another major factor is the level of
global demand for metallurgical (met) coal, which is used to make steel. Historically, met coal
has represented the majority of coal exported by the United States, accounting for as much as
two-thirds of exports in some years.72 Some PRB coal is exported from Canadian terminals at
Roberts Bank (near Vancouver, British Columbia) and Ridley Terminal at Prince Rupert, British
Columbia. PRB coal is transported to both facilities for export via railway.
PRB coal producers have sought to export via the Pacific Northwest to supply growing Asian
market, without success. For example, three port terminal projects for exporting coal in
Washington and Oregon had permit applications before state regulators and the U.S. Army Corps
of Engineers (the Corps), although none were successful.73
U.S. Coal-Producing Industry
The U.S. coal industry is highly concentrated, with a handful of major producers operating
primarily in five states―Wyoming, West Virginia, Pennsylvania, Illinois, and Kentucky, in order
of volume. In 2022, the top five coal mining companies were responsible for 51% of U.S. coal
production, led by Peabody Energy Corp., with 17.2%, and Arch Resources, Inc., with 13.2% (see
Table 3). Other major producers include the Navajo Transitional Energy Co., ACNR Holdings,
Inc., and Alliance Resource Partners.
Three of the top five coal producers filed for Chapter 11 bankruptcy protection between 2015 and
2016: Alpha Natural Resources, LCC (August 2015), Arch Coal (February 2016), and Peabody
Energy Corp. (April 2016). Other major producers, such as Patriot Coal, Walter Energy, James
River Coal, Armstrong Energy, and FirstEnergy Solutions have filed as well. All told, over 50
coal producers have filed for bankruptcy since 2015, with more than $19.3 billion in debt being
reorganized. The top-two largest producers, both of which filed for bankruptcy, accounted for
nearly 33% of U.S. coal production in 2016.
Arch Coal, ANR Inc.,74 and Peabody Energy emerged from Chapter 11 bankruptcy with plans to
move forward, all three shedding substantial debt. Opponents are critical of the plans and of the
long-term viability and reliability of the U.S. coal industry.75 Major challenges for the U.S. coal
industry will be to obtain the level of financing needed for new or expanded projects and to
become profitable in a market with declining domestic demand.
72 EIA, Coal Data Browser, https://www.eia.gov/coal/data/browser/.
73 A permit from the Corps is needed for any project that discharges dredge or fill material in waters of the United
States or wetlands, pursuant to provisions in Section 404 of the Clean Water Act; and for the construction of any
structure in, over, or under navigable waterways of the United States, including excavation, dredging, or deposition of
these materials in these waters, pursuant to Section 10 of the Rivers and Harbors Act of 1899. The proposed projects in
Washington and Oregon would involve such activities and must obtain either or both a Section 404 and Section 10
permit from the Corps before the projects can proceed. Discussion of the Corps permit requirements is beyond the
scope of this report.
74 Alpha Natural Resources, LLC, emerged from bankruptcy as two distinct entities: ANR, Inc., and Contura Energy
Inc.
75 Heather Richards, “Does the Sale of Contura Coal Mines Herald a Change in the Northeast Wyoming? Depends on
Who You Ask,” Casper Star Tribune, December 16, 2017, https://trib.com/business/energy/does-the-sale-of-conturacoal-mines-herald-a-change/article_2322fa81-d1b7-5c0b-8de9-d048156fa255.html.
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Table 3. Leading U.S. Coal Producers and Percentage of U.S. Coal Production
2022
Producer
2010
Percentage
of Total
Producer
2000
Percentage
of Total
Producer
Percentage
of Total
Peabody Energy Corp.
17.2
Peabody Coal
Co.
17.7
Peabody Coal
Co.
13.1
Arch Resources, Inc.
13.2
Arch Coal, Inc.
16.0
Arch Coal, Inc.
10.1
Navajo Transitional
Energy Co.
8.6
Cloud Peak
Energy
8.6
Kennecott
Energy
9.9
ACNR Holdings, Inc.
6.1
Alpha Natural
Resources
7.4
CONSOL
Energy, Inc.
6.9
Alliance Resource
Partners
6.0
CONSOL
Energy, Inc.
5.7
RAG
5.9
Source: U.S. Energy Information Administration (EIA), Annual Coal Report 2022, released October 5, 2023,
https://www.eia.gov/coal/annual/. EIA, Annual Coal Report 2010. EIA, Coal Industry Annual 2000.
Notes: In 2020, Arch Coal, Inc., changed its name to Arch Resources, Inc. In 2021, Peabody Coal Company
changed its name to Peabody Energy Corporation.
The Electric Power Sector: In Transition76
The electric power industry is in the process of transition, with a shift in energy sources used to
generate electricity and a growing presence of customer-sited generation sources. At the same
time, the electricity infrastructure of the United States is aging, and uncertainty exists around how
best to modernize the grid to reliably accommodate the changes in generation. Unresolved
questions about electricity reliability also are arising due to the changing energy mix, as well as
cybersecurity threats and recent high profile physical attacks. Electricity supply chains, including
the source of some critical minerals used in electricity system equipment, are growing areas of
congressional interest. Congress has played a role already in this transition (e.g., with tax credits
for renewable energy), and may continue to be faced with policy issues regarding this industry.
States have also played major roles in this area through renewable portfolio standards (RPS),77
and regional carbon pricing programs, such as the Regional Greenhouse Gas Initiative (RGGI),
among other programs.78
Supply and Demand
The U.S. electric power sector consists of all the power plants generating electricity, together with
the transmission and distribution lines, and their associated transformers and substations which
bring power to end-use customers. Electricity must be available upon demand, is rarely stored in
bulk, and is generally consumed as soon as it is produced. Approximately two-thirds of U.S.
electricity consumers are in regions of the country served by competitive wholesale electricity
markets, where companies compete to supply electricity to consumers generally at the lowest cost
(considering reliability and environmental requirements). The remaining third of consumers are
76 Ashley Lawson, Specialist in Energy Policy, is the author of this section.
77 CRS Report R45913, Electricity Portfolio Standards: Background, Design Elements, and Policy Considerations, by
Ashley J. Lawson.
78 CRS Report R41836, The Regional Greenhouse Gas Initiative: Background, Impacts, and Selected Issues, by
Jonathan L. Ramseur.
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served by electric utilities that operate under what is sometimes called a “cost-of-service model,”
where rates for electricity are established by a state regulatory body based on the utility’s cost of
providing electric power to customers (i.e., its cost-of-service).79
Electric power generation in the United States is currently dominated by the use of combustible
fossil fuels, mostly natural gas and coal. These fuels are burned to produce steam in boilers that
turn steam turbine-generators or, in the case of natural gas, burned directly in a combustion
turbine to produce electricity.80 Another major source of electricity is nuclear power (see “Nuclear
Power: Federal Support for Advanced Reactors”), which uses heat from the fission of radioactive
elements such as uranium and plutonium to produce steam to turn a generator. Electricity can also
be generated mechanically by wind turbines and hydropower, or by solar photovoltaic panels
(PV), which convert light directly into electricity. Geothermal energy power plants use natural
underground steam to run turbine generators or may use the heat from hot underground rock
formations to make steam for that purpose.
The choice of power generation technology in the United States is heavily influenced by the cost
of fuel. Historically, the use of fossil fuels has provided some of the lowest prices for generating
electricity. As a result, fossil fuels (coal and natural gas) have accounted for about two-thirds of
electricity generation since 2000.81 However, while some renewable sources of electricity
(notably wind and solar PV power) do not require a fuel, the electricity they produce varies with
the wind and available sunlight. Prices for wind turbines and solar panels have fallen in the last
decade, resulting in increased use of these sources (see “Renewable Electricity”).
Figure 10 illustrates the changing mix of fuels used for U.S. electric power generation from 2000
to 2022. Beginning in 2016, natural gas overtook coal as the largest percentage of net electricity
generation. In 2020, renewable energy sources (including hydropower) surpassed nuclear as the
third largest contributor to total generation.
79 “Cost-of-service” is a ratemaking concept used for the design and development of rate schedules to ensure that the
filed rate schedules recover only the cost of providing the electric service, including a reasonable rate of return to the
provider, at issue. This concept attempts to correlate the utility’s costs and revenue with the service provided to each of
the various customer classes.
80 The exhaust heat from gas combustion turbines is typically used to make steam for additional electricity generation
(in natural gas combined-cycle power plants).
81 In most years since 2000, the share of U.S. net electricity generation from coal and natural gas ranged from 60% to
70%. The exception was 2020, when the combined share was 59%. The U.S. generation profile that year was affected
by overall reductions in electricity demand caused in large part by responses to the COVID-19 pandemic.
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Figure 10. U.S. Net Electricity Generation by Fuel, 2000-2022
Sources: Data for 2000-2010 from U.S. Energy Information Administration (EIA), Electric Power Annual 2010,
Table 2.1.A, November 2011, and data for 2011-2021 from EIA, Electric Power Annual 2021, Table 3.1.A,
November 2022. Data for 2022 from EIA, Monthly Energy Review, March 2023.
Notes: “Other” includes petroleum liquids, petroleum coke, pumped storage (which tends to be a negative
value), blast furnace gas and other manufactured and waste gases derived from fossil fuels, non-biogenic
municipal solid waste, batteries, hydrogen, purchased steam, sulfur, tire-derived fuel, and other miscellaneous
energy sources. “Non-hydro Renewables” includes wood, black liquor, other wood waste, biogenic municipal
solid waste, landfill gas, sludge waste, agricultural byproducts, other biomass, geothermal, solar thermal, solar
photovoltaic, and wind. Beginning in 2014, EIA reported net generation from small-scale solar photovoltaic
facilities which are also included in Non-hydro Renewables.
The shift in the share of coal and natural gas reflects a range of factors, predominantly the
changing economics of power generation. Historically, since coal was readily available across a
large part of the United States, coal power plants were able to dominate electricity production for
many decades. However, increased natural gas supply and lower prices, improvements in natural
gas combined-cycle generation technology, and the costs of compliance with environmental
regulations for coal plants have led to older, less-efficient coal plants being used less or retired
from service.
U.S. Consumption
For many years, the growth in sales of electricity was closely related to growth in the economy.
However, a decoupling of growth in electricity demand from growth in gross domestic product
(GDP) has occurred, mostly because of efficiency improvements across the economy. According
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to EIA, the linkage has been declining over the last 60 years, as U.S. economic growth is
outpacing electricity use.82 U.S. electricity generation (an approximate measure of consumption)
has been relatively flat since the mid-2000s, as shown in Figure 10.
Action by the 117th Congress to promote greater electrification across the economy could
potentially change electricity consumption patterns. For example, the Infrastructure Investment
and Jobs Act (IIJA; P.L. 117-58) provided $2.5 billion for alternative fuel infrastructure, such as
electric vehicle charging equipment. P.L. 117-169, commonly known as the Inflation Reduction
Act of 2022, includes additional incentives for electric vehicles, such as a tax credit of up to
$7,500 for the purchase of qualifying vehicles. The IRA also funds a rebate program for purchase
of qualifying electric products, such as heat pumps and electric stoves.83 These laws also include
provisions aimed at promoting energy efficiency (see “Energy Efficiency: An Untapped
Resource”), which generally counteracts increased electricity demand from greater electrification
of energy end uses. On net, most analysts expect electricity consumption to increase moving
forward, in part because of electrification incentives in these laws. Of note: It may take a decade
or more for electrification to affect national trends in energy consumption, because of the
turnover time in certain sectors. For example, vehicle stocks turn over relatively slowly.84
Nuclear Power: Federal Support for Advanced
Reactors85
Nuclear power has supplied about one-fifth of annual U.S. electricity generation during the past
three decades. In 2022, nuclear reactors generated 18% of U.S. electricity supply, behind natural
gas, coal, and renewable energy (including conventional hydropower).86 Ninety-three reactors are
currently operating at 54 plant sites in 28 states.87 They generated electricity at 92.7% of their
total capacity in 2022, the highest rate of any generation source.88 Total net generation of nuclear
power in 2022 was 772 billion kilowatt-hours.89
One new reactor, at the Vogtle nuclear power plant in Georgia, began operation in June 2023, and
a twin unit was connected to the grid on March 1, 2024, with commercial operation scheduled for
82 “Total annual U.S. electricity consumption increased in all but 11 years between 1950 and 2021, and 8 of the years
with year-over-year decreases occurred after 2007.” EIA, Electricity Explained: Use of Electricity, updated May 3,
2022, https://www.eia.gov/energyexplained/electricity/use-of-electricity.php.
83 CRS In Focus IF12258, The Inflation Reduction Act: Financial Incentives for Residential Energy Efficiency and
Electrification Projects, by Martin C. Offutt.
84 “The transportation-related provisions [of the IRA] are likely to take longer to yield [greenhouse gas] emissions
reductions than the provisions affecting the electric power sector due to the duration of vehicle stock turnover cycles.
For instance, the Princeton study indicates that the emissions reductions in 2035 in the transportation sector are almost
double the reductions in 2030.” CRS Report R47385, U.S. Greenhouse Gas Emissions Trends and Projections from the
Inflation Reduction Act, by Jonathan L. Ramseur. Transportation sector greenhouse gas emissions reductions are
closely associated with the pace of transportation electrification.
85 Mark Holt, CRS Specialist in Energy Policy, is the lead author of this section.
86 EIA, “Net Generation for All Sectors, Annual,” Electricity Data Browser, online database, http://www.eia.gov/
electricity/data/browser/, accessed October 27, 2023.
87 EIA, Nuclear Explained: U.S. Nuclear Energy Industry, accessed October 27, 2023.
88 EIA, Electric Power Monthly with Data for August 2023, Tables 6.7.A and 6.7.B, https://www.eia.gov/electricity/
monthly. Other 2022 capacity factors for major generation sources were coal, 48.4%; natural gas combined-cycle,
56.6%; geothermal, 69.0%; hydropower, 36.3%; solar photovoltaic, 24.4%; and wind power, 35.9%.
89 Ibid., Table 1.1. Net generation excludes electricity used to operate the power plant.
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the second quarter of 2024.90 Six additional new reactors have received licenses from the Nuclear
Regulatory Commission (NRC), but construction of those projects is uncertain; other projects that
were issued licenses have subsequently been terminated.91 Aside from the Vogtle units, two other
reactors, at the Watts Bar plant in Tennessee, have begun operation during the past three decades,
while several nuclear plants have permanently closed.
Although existing U.S. reactors have operated well, economic factors have been the main source
of stress for the U.S. nuclear power industry. Thirteen reactors have permanently closed since the
beginning of 2013.92 Construction of two new reactors at the Summer plant site in South Carolina
was cancelled following a bankruptcy filing in 2017 by the project’s lead contractor,
Westinghouse Electric Company.93 Most of the closed nuclear power plants sold their electricity
at competitive market prices, in contrast to plants that recover their costs (including a reasonable
rate of return) through regulated rates. Nuclear plants that rely on power markets have seen low
average wholesale power prices and stagnant demand (see “U.S. Consumption” above), combined
with relatively high operating and capital costs in some cases, particularly at plants with a single
reactor.94
Congress has recently enacted sharply higher funding and tax credits to support new reactor
construction, largely because of nuclear power’s low carbon emissions. Much of this interest in
new nuclear power plants is focused on “advanced” reactors, which would use different
technology from that of existing plants. Proponents contend that advanced reactors would be
smaller and cheaper than existing commercial reactors, although the economics of these proposed
designs have yet to be demonstrated. There is also considerable interest in “small modular
reactors,” which would be smaller than today’s commercial reactors and could use a variety of
technologies.
Some contend that electricity markets are undervaluing the reliability of nuclear generation, its
role in diversifying the nation’s power supply, and its importance in reducing greenhouse gas
emissions.95 Nuclear power accounted for 48% of U.S. sources considered to be zero-carbon
electricity generation in 2021.96 Several states have established programs to preserve nuclear
power as a non-direct carbon emitting electricity source.97
At the federal level, as part of the IIJA (P.L. 117-58), Congress enacted a new Civil Nuclear
Credit Program. Under this program, existing nuclear reactors that face closure because of
economic factors may be eligible for credits from DOE. DOE announced a final Civil Nuclear
Credit award totaling up to $1.1 billion to the two-unit Diablo Canyon plant in California on
90 Georgia Power, Vogtle Unit 4 Connects to Electric Grid for the First Time, March 1, 2024,
https://www.georgiapower.com/company/news-center/2024-articles/vogtle-unit-4-connects-to-electric-grid-for-thefirst-time.html.
91 Nuclear Regulatory Commission (NRC), “Combined License Applications for New Reactors,” updated July 3, 2023,
https://www.nrc.gov/reactors/new-reactors/col.html.
92 NRC, Information Digest 2022-2023, Appendix C, https://www.nrc.gov/docs/ML2304/ML23047A378.pdf.
93 Brad Plumer, “U.S. Nuclear Comeback Stalls as Two Reactors Are Abandoned,” New York Times, January 20, 2018,
sec. Climate, https://www.nytimes.com/2017/07/31/climate/nuclear-power-project-canceled-in-south-carolina.html.
94 For more information, see CRS Report R44715, Financial Challenges of Operating Nuclear Power Plants in the
United States, by Phillip Brown and Mark Holt.
95 For example, see “Electricity Markets: Markets Must Value Clean, Reliable, Sustainable Energy,” Nuclear Energy
Institute, https://www.nei.org/advocacy/preserve-nuclear-plants/electricity-markets.
96 EIA, “U.S. Energy-Related Carbon Dioxide Emissions, 2019,” Figure 6, December 14, 2022, https://www.eia.gov/
environment/emissions/carbon/.
97 CRS Report R46820, U.S. Nuclear Plant Shutdowns, State Interventions, and Policy Concerns, by Mark Holt and
Phillip Brown.
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January 2, 2024.98 P.L. 117-169, the IRA, established two new tax credits that would support new
and existing nuclear power plants. The zero-emission nuclear power production credit applies to
existing power plants, while the clean electricity production tax credit would apply to any new
zero-emission power plant, including new nuclear. (See text box below.)
Recently Enacted Support for Nuclear Power
Section 40323 of the IIJA (P.L. 117-58) established a new Civil Nuclear Credit Program. Under this program,
existing nuclear reactors that sell their electricity in competitive wholesale markets are eligible for credits if the
Secretary of Energy certifies that the reactors are likely to close because of economic factors, that such closure
would result in increased pollution, and that the Nuclear Regulatory Commission (NRC) has reasonable assurance
that the reactor will operate safely. Owners or operators of reactors certified by the Secretary can submit bids to
receive credits for four years. The IIJA appropriated $6 billion for the program. In November 2022, DOE
announced a conditional award of $1.1 billion for the Diablo Canyon Power Plant in California and finalized the
award in January 2024. A second award cycle closed May 31, 2023.
Section 41002 of the IIJA appropriated $2.5 billion over four years for the Advanced Reactor Demonstration
Program established in the Energy Act of 2020 (P.L. 116-260).
Section 13105 of the IRA (P.L. 117-169) established a tax credit (I.R.C. §45U) per kilowatt-hour of electricity
produced at nuclear plants in operation before August 4, 2022. The credit is reduced based on the amount of
electricity produced and wholesale electricity rates in a given year. Producers may qualify for a bonus credit five
times the base amount if certain wage requirements are met.
Section 13701 of the IRA established a new clean electricity production tax credit (I.R.C. §45Y) that replaces the
existing renewable electricity production tax credit for facilities placed in service after December 31, 2024. The
new credit applies to facilities with greenhouse gas emissions rates no greater than zero, including new nuclear
facilities. Like the nuclear tax credit, the credit is increased if certain prevailing wage requirements are met. There
is a further bonus credit if the facility is placed in an “energy community,” generally defined as a brownfield site or
an area with a history of fossil fuel industries in decline.
Reactors funded by DOE’s Advanced Reactor Demonstration Program are intended to be safer,
more efficient, and less expensive to build and operate than today’s conventional light water
reactors (LWRs), which use ordinary water as a coolant and for moderating (slowing) the
neutrons in the nuclear chain reaction. Some of the designs are also intended to produce less longlived radioactive waste than existing reactors. Nearly all advanced designs currently under
development would be far smaller than conventional reactors, which typically have around 1,000
megawatts (MW) of electric generating capacity. Most proposed advanced reactors would have
less than 300 MW of electrical capacity, typically classified as small modular reactors (SMRs).
Some have less than 20 MW of electrical capacity, which DOE classifies as microreactors.99
Some express doubts that new nuclear plants, even with advanced technology, can overcome such
drawbacks as accident risk, high costs, and disposal of radioactive waste. Focusing on renewable
energy and energy efficiency would be far more effective in reducing carbon emissions, they
argue.100 Remaining in question is whether these alternatives can provide sufficient baseload
power supplies to replace nuclear, at least in the near term.
98 DOE, “Record of Decision for the Final Environmental Impact Statement for the Civil Nuclear Credit Program
Proposed Award of Credits to Pacific Gas and Electric Company for Diablo Canyon Power Plant,” Federal Register,
January 2, 2024, https://www.federalregister.gov/documents/2024/01/02/2023-28808/record-of-decision-for-the-finalenvironmental-impact-statement-for-the-civil-nuclear-credit-program; DOE, “Biden-Harris Administration Announces
Major Investment to Preserve America’s Clean Nuclear Energy Infrastructure,” November 21, 2022,
https://www.energy.gov/articles/biden-harris-administration-announces-major-investment-preserve-americas-cleannuclear.
99 Department of Energy (DOE), Office of Nuclear Energy, “What Is a Nuclear Microreactor?,” October 23, 2018,
https://www.energy.gov/ne/articles/what-nuclear-microreactor.
100 Nuclear Information and Resource Service, “Nukes and Climate Change,” https://www.nirs.org/climate/, accessed
August 13, 2020.
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All but 6 of today’s 93 nuclear power reactors (Figure 11) began operating before 1990, and most
started commercial operation before 1980. They were initially licensed by NRC to operate for 40
years, a period that for more than half of U.S. reactors expired before 2020. However, most
reactors have been issued 20-year license renewals, pushing back the license expiration of almost
all nuclear plants at least to the 2030s. Subsequent 20-year renewals, for a total operating life of
80 years, are also allowed. NRC has issued six such subsequent license renewals for up to 80
years of operation. Another 11 subsequent license renewal applications are currently under
review, and at least 8 more have been announced.101
Figure 11. U.S. Operating Commercial Nuclear Power Reactors
As of November 2023
Source: CRS analysis of U.S. Energy Information Administration, U.S. Total Nuclear and Uranium Data and Map,
updated November 2023, https://www.eia.gov/beta/states/data/dashboard/nuclear-uranium.
Renewable Energy: Continued Growth102
Federal policies that support the use of renewable energy date mainly back to the mid-1970s—the
years following the 1973 oil embargo and the ensuing gasoline price volatility. At that time,
support for renewable energy was generally oriented towards achieving energy security goals
(e.g., steady, independent access to domestic energy sources). While energy security remains a
policy objective, much of the current debate regarding renewable energy relates to the
environment (e.g., GHG emission reduction) and the economy (e.g., affordability).
101 NRC, “Status of Subsequent License Renewal Applications,” updated October 25, 2023, https://www.nrc.gov/
reactors/operating/licensing/renewal/subsequent-license-renewal.html.
102 Kelsi Bracmort, Specialist in Natural Resources and Energy Policy, and Ashley Lawson, Analyst in Energy Policy,
are the lead authors of this section.
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Renewable energy is a relatively small portion of the total U.S. energy portfolio, constituting
around 9% of total U.S. energy consumption in 2022.103 Renewable energy consumption has
increased since 2000, approximately doubling between 2000 and 2022, as illustrated in Figure
12.104 Most of this growth was due to increased use of wind and solar for electric power
generation and biofuels for transportation.
Figure 12. Renewable Energy Consumption in the United States, 2000-2022
Source: CRS analysis of U.S. Energy Information Administration, Monthly Energy Review, October 2023,
https://www.eia.gov/totalenergy/data/monthly/.
Renewable energy is available in a variety of distinct forms that use different conversion
technologies to produce usable energy products (e.g., heat, electricity, and liquid fuels). Each
energy product derived from a renewable source has unique market and policy considerations.
For example, renewable electricity generation is supported by state-level renewable portfolio
standards—where enacted—in addition to federal-level tax incentives for certain renewable
energy sources. Biofuels, on the other hand, are supported by the federal-level Renewable Fuel
Standard (RFS) that requires a specified volume of renewable fuels to be included in the national
fuel supply each year.
Renewable energy is consumed within the electric power, industrial, transportation, residential,
and commercial sectors. As indicated in Table 4, the contribution of the different renewable
energy sources to each sector varies. For example, nearly all hydropower is consumed in the
electric power sector and most of the industrial sector renewable energy use is in the form of
biomass energy generation.
103 EIA, Monthly Energy Review, Table 1.1, “Primary Energy Overview,” October 2023. Renewable energy sources
include hydropower, geothermal, solar, wind, and biomass (including biofuels).
104 Ibid.
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Table 4. U.S. Renewable Energy Consumption by Sector and Source, 2022
Trillion Btu
Residential
Commercial
Industrial
Transportation
Electric
Power
Total
Hydropower
0
1
3
0
890
894
Geothermal
40
22
4
0
56
122
Solar
192
61
15
0
493
761
Wind
0
1
0
0
1,483
1,484
Biomass
423
147
2,266
1,579
413
4,827
Total
654
231
2,288
1,579
3,335
8,088
Source: U.S. Energy Information Administration, Monthly Energy Review, Table 10.2a, “Consumption: Residential
and Commercial Sectors,” Table 10.2b, “Consumption: Industrial Sector,” and Table 10.2c, “Consumption:
Transportation and Electric Power Sectors,” October 2023.
Notes: Values may not sum due to independent rounding. Biomass includes wood, waste, fuel ethanol, and
biodiesel.
Renewable energy consumption has grown over the last couple of decades. The electric power
sector was the largest renewable energy consumer in 2022, accounting for 41% of total renewable
energy consumption that year (see Table 4). Following the trend for renewable energy overall,
electric power renewable energy consumption approximately doubled between 2000 and 2022.105
The industrial sector was the second-largest renewable energy consumer in 2022, with
consumption levels increasing approximately 20% between 2000 and 2022.106
The following sections discuss renewable transportation fuels and renewable electricity
generation trends from 2000 to the present, and provide some context about the policy and market
dynamics that have contributed to the growth of these separate and distinct markets, as well as a
brief discussion about recent legislative action. It is beyond the scope of this report to include
either detailed descriptions or analysis of each renewable energy source or a comprehensive
assessment of each consumption sector.
Renewable Transportation Fuels
Renewable energy production and consumption in the transportation sector comes in the form of
two primary types of renewable fuels: ethanol and biodiesel. The primary use of ethanol is as a
blending component of motor gasoline. Although it can vary by vehicle type and access to highlevel ethanol-gasoline blends, ethanol content generally represents approximately 10% of
gasoline by volume (i.e., E10). Biodiesel is a direct substitute for diesel fuel, and can be blended
at various volume amounts, including 5% (i.e., B5) and 20% (i.e., B20).
U.S. ethanol and biodiesel production and consumption in the United States have experienced
growth over the last two decades. Significant growth occurred following the establishment and
expansion of the Renewable Fuel Standard—a mandate that U.S. transportation fuel contain a
minimum volume of biofuel.107 U.S. ethanol production has steadily increased from
105 EIA, Monthly Energy Review, Table 10.2c, “Renewable Energy Consumption: Transportation and Electric Power
Sectors,” October 2023.
106 EIA, Monthly Energy Review, Table 10.2b, “Renewable Energy Consumption: Industrial Sector,” October 2023.
107 For more information, see CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview, by Kelsi
Bracmort.
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approximately 1.6 billion gallons in 2000 to approximately 15 billion gallons in 2022.108 Ethanol
consumption increased from 1.7 billion gallons to 14 billion gallons over the same time period.109
From 2001 to 2022, biodiesel production increased from 9 million gallons to approximately 1.6
billion gallons.110 Including imported fuel, biodiesel consumption increased from 10 million
gallons in 2001 to approximately 1.7 billion gallons in 2022.111
Legislative Action in the 117th Congress
The 117th Congress supported renewable transportation fuels with laws such as the Inflation Reduction Act of
2022 (IRA; P.L. 117-169) and the CHIPS and Science Act (P.L. 117-167). The IRA provides the U. S. Department
of Agriculture with $500 million for grants to increase the sale and use of agricultural commodity-based fuels
through infrastructure improvements for blending, storing, supplying, or distributing biofuels, and it provides the
U.S. Environmental Protection Agency with $10 million for new grants to support investment in advanced biofuels.
The IRA also establishes a sustainable aviation fuel tax credit and extends the biodiesel and renewable diesel tax
credit. The CHIPS and Science Act authorizes the U.S. Department of Energy to carry out a research and
development program in the areas of biological systems science and climate and environmental science “relevant
to the development of new energy technologies and to support the energy, environmental, and national security
missions of the Department” including the cost-effective and sustainable production of advanced biofuels, and
authorizes up to six bioenergy research centers “to accelerate advanced research and development of advanced
biofuels,” among other things. Advanced biofuel is generally defined as a renewable fuel, other than corn starch
ethanol, with lifecycle greenhouse gas emissions of at least 50% less than lifecycle greenhouse gas emissions of its
gasoline or diesel counterpart. Lastly, the 117th Congress started deliberations for the next farm bill—an omnibus,
multiyear law. Since 2002, the farm bill has contained an energy title which incentivizes research, development, and
adoption of renewable energy, including renewable fuels, among other things.
CRS Written Products:
•
CRS Insight IN11978, Inflation Reduction Act: Agricultural Conservation and Credit, Renewable Energy, and Forestry,
by Jim Monke et al.
•
CRS Report R47171, Sustainable Aviation Fuel (SAF): In Brief, by Kelsi Bracmort and Molly F. Sherlock
•
CRS In Focus IF10639, Farm Bill Primer: Energy Title, by Kelsi Bracmort
Renewable Electricity
U.S. electricity generation from renewable sources more than doubled between 2000 and 2022.112
The contribution of renewable energy to the U.S. power sector increased from 9% in 2000 to 23%
in 2022.113 While hydropower generation has represented 6% to 8% of total U.S. electric power
generation since 2000, essentially all of the growth in renewable electricity generation during this
period was from non-hydro renewables, particularly wind and solar. Due to the established nature
of hydropower, and a lack of significant change in the amount of hydroelectric generation over
the last 20 years, this section limits the remaining discussion of renewable electricity to nonhydro renewables.
108 EIA, Monthly Energy Review, Table 10.3, October 2023.
109 Ibid.
110 EIA, Monthly Energy Review, Table 10.4, October 2023. The Monthly Energy Review reports biodiesel data starting
in 2001.
111 Ibid.
112 Data for 2000-2010 from EIA, Electric Power Annual 2010, Table 2.1.A, November 2011. Data for 2012-2021 from
EIA, Electric Power Annual 2021, Table 3.1.A, November 2022. Data for 2022 from EIA, Monthly Energy Review,
March 2023.
113 Ibid.
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Non-Hydro Renewables
Non-hydro renewable energy sources (i.e., wind, solar, geothermal, and biomass) for electricity
generation have been supported by policies at both the state and federal level. Renewable
portfolio standard policies instituted in many states have been a demand catalyst for these
renewables, especially wind and solar.114 Federal tax incentives—in the form of investment and
production tax credits,115 as well as accelerated depreciation—have provided a federal-level
financial incentive that has resulted in renewable electricity being financially attractive to both
project investors and power purchasers. These policies, along with declining technology costs for
wind and solar, have contributed to growth in the use of non-hydro renewable energy sources to
generate electric power in the United States.116 In 2022, non-hydro renewable energy sources
provided 17% of total U.S. electric power generation, up from 2% in 2000 (see Figure 13).
Wind and solar have dominated growth in non-hydro renewables for electricity generation, while
generation from biomass and geothermal has remained essentially flat. Electricity generation
from wind energy increased from less than 5 terawatt-hours (TWh) in 2000 to 434 TWh in 2022.
Electricity generation from solar energy increased from 0.5 TWh in 2000 to 205 TWh in 2022
(see Figure 13).
U.S. electricity demand has been relatively flat since 2000, as discussed in the section “The
Electric Power Sector: In Transition.” As a result, electricity from non-hydro renewables has
grown in both absolute terms and as a share of the total.
114 For additional information about Renewable Portfolio Standard policies, see CRS Report R45913, Electricity
Portfolio Standards: Background, Design Elements, and Policy Considerations, by Ashley J. Lawson; and the
Database of State Incentives for Renewables and Efficiency (DSIRE) summary map of state renewable policies
available at https://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2023/11/RPS-CES-Nov2023-1.pdf.
115 For additional information about investment tax credits for renewable electricity generation technologies, see CRS
In Focus IF10479, The Energy Credit or Energy Investment Tax Credit (ITC), by Molly F. Sherlock. For additional
information about production tax credits for renewable electricity production, see CRS Report R43453, The Renewable
Electricity Production Tax Credit: In Brief, by Molly F. Sherlock. Congressional offices interested in follow-up may
contact Donald J. Marples, Specialist in Public Finance, or Nicholas E. Buffie, Analyst in Public Finance.
116 For a discussion of factors contributing to the increase use of solar energy, see CRS Report R46196, Solar Energy:
Frequently Asked Questions, coordinated by Ashley J. Lawson.
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Figure 13. Non-Hydro Renewable Electricity Generation, 2000-2022
Sources: U.S. Energy Information Administration (EIA), Electric Power Annual 2010, Table 2.1.A, November
2011, EIA, Electric Power Annual 2021, Table 3.1.A and Table 3.1.B, November 2022, and EIA, Electric Power Annual
2022, Table 3.1.A and Table 3.1.B, October 2023.
Notes: Solar includes utility-scale and small-scale solar. Biomass includes biomass, wood and wood-derived fuels,
landfill gas, biogenic solid municipal waste, and other waste biomass. Additional information about renewable
energy categories is in the EIA sources.
In terms of new electric power capacity additions, non-hydro renewables comprised more than
half of all additions every year since 2015 (except 2018; see Figure 14). The large majority of
non-hydro renewable capacity additions came from wind and solar. Battery additions, shown as
part of the Other category in Figure 14, have grown in recent years and are frequently associated
with solar facilities.
Figure 14. Electric Power Capacity Additions, 2000-2022
Source: CRS analysis of U.S. Energy Information Administration, Form EIA-860.
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Notes: Figure shows summer capacity for all capacity additions. Dataset covers new generators with capacity
greater than 1 megawatt. Non-hydro renewables includes biomass, geothermal, solar photovoltaic, solar thermal,
and wind.
Small-Scale Solar
Generation from small-scale solar has grown in recent years, albeit at a slightly slower pace than
larger projects.117 Some of the factors discussed above have also contributed to growth in smallscale solar. Other state policies, such as net metering, affect small-scale solar uniquely.118
Costs and benefits for small-scale solar differ from larger solar projects. Electricity generated
from small solar projects is several times more expensive on a per megawatt basis than electricity
generated from large ones.119 The cost difference arises in part from the fact that large solar
projects benefit from economies of scale. Another factor is that small projects may not be ideally
situated for electricity generation. For example, PV panels on rooftops may be partially shaded or
north-facing, thus receiving less sunlight throughout the year than more ideally situated panels
(e.g., a “solar farm,” which may be installed on an unshaded area).
Proponents of small-scale solar may value some characteristics that large projects do not have:
they can be installed on developed land in urban areas, minimizing impacts to the environment
and minimizing disruptions to other land uses; they rarely require new electricity transmission
infrastructure; and, under certain circumstances, they can lower electricity bills for individuals
and communities.120
Small-scale solar—typically rooftop installations at a residential, commercial, or industrial
location—represented 35% of all installed solar capacity in 2022.121 Generation from small-scale
solar (new and existing installations) made up 30% of generation from all solar in that same
year.122
Energy Efficiency: An Untapped Resource123
Similar to renewable energy policies, federal supports for energy conservation and efficiency date
mainly back to the mid-1970s, and were similarly oriented towards promoting energy security
goals, providing relief from high energy prices to low-income households, and encouraging
energy conservation. Energy conservation and energy efficiency are not synonymous. Energy
conservation is any action or behavior that results in consuming less energy (e.g., turning off a
lamp when leaving a room). Energy efficiency is providing the same or an improved level of
117 Solar photovoltaic (PV) panels—the most commonly used solar electricity technology today—can be assembled in
configurations of different sizes, ranging from large “solar farms” to small-scale installations such as those on rooftops.
Different organization use different definitions for “small-scale” solar. For more information, see CRS Report R46196,
Solar Energy: Frequently Asked Questions, coordinated by Ashley J. Lawson.
118 CRS Report R46010, Net Metering: In Brief, by Ashley J. Lawson.
119 Vignesh Ramasamy et al., U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, with Minimum
Sustainable Price Analysis: Q1 2022, National Renewable Energy Laboratory, September 2022, https://www.nrel.gov/
docs/fy22osti/83586.pdf.
120 One financial benefit comes through the policy of net metering, which is implemented in many states. For more
information, see CRS Report R46010, Net Metering: In Brief, by Ashley J. Lawson.
121 EIA, Electric Power Annual, Table 4.2.B, “Existing Net Summer Capacity of Other Renewable Sources by
Producer Type.”
122 EIA, Electric Power Annual, Table 3.1.B, “Net Generation from Renewable Sources: Total (All Sectors).”
123 Corrie Clark, CRS Specialist in Energy Policy, is the lead author of this section.
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service with less energy (e.g., replacing an incandescent light bulb with a light-emitting diode
[LED] light bulb).
Although energy security remains a policy objective, much of the current debate about supporting
energy efficiency is related to the benefits of reduced energy consumption (e.g., consumers saving
money, energy sector avoiding GHG emissions) and the costs to builders and manufacturers (e.g.,
investments in equipment or processes to meet mandatory or voluntary performance metrics).
Proponents of increased energy efficiency see an untapped “resource” that can mitigate the
demand for additional energy supplies. Perceived benefits of energy efficiency include lowered
energy bills, reduced demand for energy, improved energy security and independence, and
reduced air pollution and GHG emissions. Challenges to energy efficiency include market
barriers that do not incentivize builders or developers to invest in energy efficiency, customers’
lack of information or awareness of energy saving opportunities and investment returns, and
policy barriers that focus on energy supply rather than investment in energy use and efficiency.
Figure 15. U.S. Total Energy Consumption by Sector 2000-2022
Quadrillion Btu (Quads)
Source: Data compiled by CRS from U.S. Energy Information Administration, Monthly Energy Review, Tables 2.1a
and 2.1b, April 2023, https://www.eia.gov/totalenergy/data/monthly/.
Notes: Total energy consumption by end-use sectors in this chart includes electrical system energy losses,
which are allocated proportionally to the amount of electricity retail sales to each end-use sector.
According to the EIA, U.S. total energy consumption is about 100 quadrillion Btu (Quads).124 Of
that total, the buildings and industrial sectors collectively consume approximately 73% of U.S.
total energy, and the transportation sector consumes approximately 27% (see Figure 15).125
124 For 2022, EIA reported that energy consumption was approximately 100 Quads. In light of the COVID-19
pandemic, EIA reported that energy consumption declined to approximately 93 Quads in 2020. EIA, Monthly Energy
Review, Tables 2.1a and 2.1b, April 2023, https://www.eia.gov/totalenergy/data/monthly.
125 The building sector is an end-use energy consumption segment of the nation’s energy system that comprises
residential and commercial buildings. The industrial sector is an end-use energy consumption segment of the nation’s
energy system that comprises energy-intensive manufacturing, non-energy-intensive manufacturing, and
nonmanufacturing activities.
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Increased adoption of energy-efficiency technologies by these sectors could potentially realize
significant energy savings and reduce emissions to the environment.
Improvements in energy efficiency may not translate into overall energy consumption reductions.
If demand for energy services remained constant, then improving energy efficiency would reduce
energy consumption. However, demand for energy services can change. For example, consumers
could offset gains in appliance efficiency standards by buying larger appliances or multiple
appliances.126 This type of outcome is commonly referred to as the “rebound effect.”127
Efficiency in Buildings
The residential and commercial buildings sector accounts for 39% of U.S. total energy
consumption, with space heating being the largest single source of consumption within the sector
(Figure 16).128 DOE estimates that building energy use could be reduced by more than 20%
through implementation of technologies that are known to be cost-effective.129 Policy options to
increase energy efficiency in the building sector include building energy codes, mandatory
appliance and equipment energy conservation standards, and voluntary programs such as the
ENERGY STAR program.130
126 According to EIA, from 1978 to 1997, the percentage of households that reported a second refrigerator remained
consistently between 12% and 15% for every residential energy consumption survey cycle; however, between 1997 and
2015, the percentage of households increased to 30% of all housing units. EIA also found that households with multiple
refrigerators tended to have more rooms than those households with only one refrigerator. EIA, “What’s New in How
We Use Energy at Home,” May 2018, https://www.eia.gov/consumption/residential/reports/2015/overview/index.php.
127 S. Sorrell, J. Dimitropoulos, and M. Sommerville, “Empirical Estimates of the Direct Rebound Effect: A Review,”
Energy Policy, 2009, vol. 37, no. 4, pp. 1356-1371.
128 See EIA, Annual Energy Outlook, Reference Case Projection Table 2, “Energy Consumption by Sector and Source,”
2023, https://www.eia.gov/outlooks/aeo/excel/aeotab_2.xlsx.
129 DOE, “Chapter 5: Increasing Efficiency of Building Systems and Technologies,” Quadrennial Technology Review,
September 2015, p. 2, https://energy.gov/sites/prod/files/2017/03/f34/qtr-2015-chapter5.pdf.
130 For more information on building practices and building energy codes, see CRS Report R46719, Green Building
Overview and Issues, by Corrie E. Clark. For more information on appliance and equipment standards, see CRS Report
R47038, The Department of Energy’s Appliance and Equipment Standards Program, by Martin C. Offutt. For more
information on ENERGY STAR®, an internationally recognized voluntary labeling program for energy-efficient
products, homes, buildings, and manufacturing plants that is jointly administered by EPA and DOE, see CRS In Focus
IF10753, ENERGY STAR Program, by Corrie E. Clark.
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Figure 16. Estimated U.S. Delivered Building Energy Consumption by End Use, 2022
Quadrillion Btu (Quads)
Source: CRS using EIA, Annual Energy Outlook, Reference Case Projection Tables 4-A5, March 2023.
Notes: “Other uses” for residential buildings include (but are not limited to) dehumidifiers, ceiling fans, non-PC
rechargeables, smart speakers, smartphones, tables, microwaves, coffee makers, miscellaneous refrigeration
products, other small kitchen appliances, pool heaters, pool pumps, portable electric spas, outdoor grills, natural
gas- and propane-fueled lights, security systems, and backup electricity generators, as well as electric and
electronic devices, heating elements, and motors not listed above. Electric vehicles are included in the
transportation sector. “Other uses” for commercial buildings include (but are not limited to) miscellaneous uses
such as transformers, medical imaging and other medical equipment, elevators, escalators, off-road electric
vehicles, laboratory fume hoods, laundry equipment, coffee brewers, water services, emergency generators,
combined heat and power in commercial buildings, and manufacturing performed in commercial buildings, and
cooking (distillate). Also includes residual fuel oil, propane, coal motor gasoline, kerosene, and marketed
renewable fuels (biomass).
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Residential Building Energy Efficiency and Electrification Rebates131
P.L. 117-169, commonly known as the Inflation Reduction Act of 2022 (IRA), appropriated $9 billion for rebates
and training related to residential energy efficiency and electrification. The energy efficiency or HOMES (Home
Owner Managing Energy Savings) rebates are awarded according to the energy savings of the whole house. The
electrification rebates support a menu of projects, including replacing appliances, adding insulation, and upgrading
the in-home electrical delivery system itself. The two rebate programs have unique means-testing provisions and
cost recovery rates and caps.
For the HOMES rebates, applicants can demonstrate savings by comparing energy consumption before and after
the retrofits, either through use of building energy models that estimate the energy performance of the whole
house, or by measured performance. The energy savings requirements and the rebate calculation differ for the
two methods, but generally reimburse project costs at 50% or, for low and moderate income (LMI), 80%, up to
applicable caps.
For electrification, the IRA establishes point-of-sale rebates to eligible entities—generally households earning 150%
or less of area median income (AMI) for purchase and installation of specific appliances, including heat pumps for
water heating, up to $1,750; heat pumps for space heating/cooling, up to $8,000; and electric stoves or electric
heat pump clothes dryers, up to $840. Complementing these provisions are rebates for enabling electrification—
for example, up to $4,000 for an electric load service center upgrade. The total of all rebates is generally limited
to $14,000 per household, and new equipment generally must be ENERGY STAR certified (42 U.S.C. §6294a). The
IRA appropriated $4.5 billion for electrification rebates, and also appropriated $200 million for training and
education to contractors and organizations involved in the rebate programs.
The Infrastructure Investment and Jobs Act (IIJA, P.L. 117-58) establishes within the DOE Building Technologies
Office (BTO) a competitive grant program to implement updated building energy codes. IIJA also directs the
Secretary of Energy to provide grants to post-secondary institutions to establish building training and assessment
centers. The IIJA further provides grants to eligible entities to pay the federal share of career skills training
programs (50%) to train and certify students to install energy efficient building technologies. Lastly, Congress in
the IIJA directs the EIA and Environmental Protection Agency to enter into an information-sharing agreement on
their respective datasets on commercial building energy consumption.
Efficiency in Transportation
In 2022, the transportation sector consumed approximately 28 Quads of total U.S. energy,
accounting for 72% of all U.S. petroleum use.132 Of the total energy consumed, approximately
55% is attributable to light duty vehicles and commercial light trucks, 21% is attributable to
freight trucks, and 10% is attributable to aircraft (see Figure 17). Two agencies establish fuel
standards for passenger vehicles: the Corporate Average Fuel Economy (CAFE) standards are
promulgated by the National Highway Traffic Safety Administration (NHTSA), and the LightDuty Vehicle GHG Emission Standards are promulgated by the U.S. Environmental Protection
Agency (EPA; see shaded box below on “Fuel Efficiency Standards for Vehicles”).133 In addition
to policy options such as mandatory standards, other energy efficiency considerations for the
transportation sector include procurement goals for federal fleets and potential expansion of
alternative fuel and electric vehicle recharging infrastructure.134
131 For more information, see CRS In Focus IF12258, The Inflation Reduction Act: Financial Incentives for Residential
Energy Efficiency and Electrification Projects, by Martin C. Offutt.
132 EIA, Annual Energy Outlook, Reference Case Projection Table A2, “Energy Consumption by Sector and Source,”
2023, https://www.eia.gov/outlooks/aeo/excel/aeotab_2.xlsx.
133 For more information on fuel economy standards and greenhouse gas standards, see CRS In Focus IF10871, Vehicle
Fuel Economy and Greenhouse Gas Standards, by Richard K. Lattanzio, Linda Tsang, and Bill Canis.
134 For more information on electrification issues, see CRS Report R47675, Federal Policies to Expand Electric
Vehicle Charging Infrastructure, by Melissa N. Diaz and Corrie E. Clark; CRS Report R46231, Electric Vehicles: A
Primer on Technology and Selected Policy Issues, by Melissa N. Diaz; and CRS Report R46420, Environmental Effects
of Battery Electric and Internal Combustion Engine Vehicles, by Richard K. Lattanzio and Corrie E. Clark.
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Figure 17. U.S.Transportation Sector Energy Use by Mode in 2022
Quadrillion Btu
Source: CRS using EIA, Annual Energy Outlook, Reference Case Projection Table A7, March 2023.
Notes: Shipping includes domestic and international shipping. Rail includes passenger and freight. Other includes
recreational boats, military uses, lubricants, pipeline fuel, and natural gas liquefaction for export.
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Fuel Efficiency Standards for Motor Vehicles135
Light-duty vehicles, commercial light trucks, and freight trucks comprise approximately 78% of delivered energy
used by the transportation sector.136 Two key federal statutes regulate the fuel efficiency of these vehicles. First,
the Energy Policy and Conservation Act (EPCA, P.L. 94-163, see specifically 49 U.S.C. §§32901-32919) requires the
U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA), to administer
Corporate Average Fuel Economy (CAFE) standards for passenger cars starting in model year (MY) 1978 and light
trucks in MY1979. Over time, Congress has amended the statute to modify the structure of the program, require
tighter standards, and include heavy-duty trucks. Second, the Clean Air Act (CAA, 42 U.S.C. §7521 et seq.)
provides authority to EPA to regulate greenhouse gas (GHG) emissions—which are closely linked to fuel
consumption. In addition to the federal requirements, the State of California, which has authority to set its own
vehicle emissions standards under CAA,137 has established a set of low-emission and zero-emission vehicle
programs, which some other states have adopted. (EPCA preempts states from setting their own fuel economy
standards; and CAA generally preempts states from setting their own emissions standards, except that they may
adopt the California emission standards under certain conditions.138)
EPA promulgated the most recent set of light-duty vehicle GHG emission standards for MY2023-2026 in
December 2021 (86 Federal Register 74434); NHTSA promulgated the most recent set of light-duty fuel economy
standards for MY2024-2026 in May 2022 (87 Federal Register 25710). The agencies estimate that the final CAFE
standards would produce a fleet-wide, sales-weighted, fuel economy of roughly 49 miles per gallon (mpg) in
MY2026 and avoid the consumption of about 234 billion gallons of petroleum between MY2030 and MY2050.
Further, in August 2021, President Biden signed Executive Order 14037, “Strengthening American Leadership in
Clean Cars and Trucks,” which (1) sets a nonbinding electrification goal that “50 percent of all new passenger cars
and light trucks sold in 2030 be zero-emission vehicles, including battery electric, plug-in hybrid electric, or fuel
cell electric vehicles,” and (2) requires EPA and NHTSA to begin work on rulemakings for multipollutant and fuel
efficiency standards for both light-duty vehicles and heavy-duty vehicles and engines that would take effect
beginning in MY2027. In April 2023, EPA proposed new standards that would cut per-mile emissions roughly in
half from the MY2021 standards by MY2032. In July 2023, NHTSA proposed new CAFE standards estimated to
reach 58 miles per gallon in MY2032. On January 23, 2024, 120 Senators and Representatives sent a letter to the
Deputy Administrator of NHTSA expressing their concern over the proposal and challenging its legality.139
135 For more information, see CRS In Focus IF12433, Light-Duty Vehicles, Air Pollution, and Climate Change, by
Richard K. Lattanzio; CRS Report R40506, Cars, Trucks, Aircraft, and EPA Climate Regulations, by James E.
McCarthy and Richard K. Lattanzio; and CRS In Focus IF10871, Vehicle Fuel Economy and Greenhouse Gas
Standards, by Richard K. Lattanzio.
136 Data for 2022 in terms of million barrels per day oil equivalent from EIA, Annual Energy Outlook 2023, Reference
Case Projection Table 7, https://www.eia.gov/outlooks/aeo/tables_ref.php.
137 42 U.S.C. §7543.
138 42 U.S.C. §7507. As of January 2024, 17 other states and the District of Columbia had adopted California’s GHG
emission standards under the provisions of Section 177 of the CAA; the states account for approximately 40% of all
U.S. new vehicle sales.
139 Letter from Senator Mike Crapo et al. to Ms. Sophie Shulman, Deputy Administrator, National Highway Traffic
Safety Administration, January 23, 2024, https://www.crapo.senate.gov/download/nhtsacafestandards01242024.
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Efficiency in Industry and Manufacturing
Figure 18. U.S. Industrial Sector Energy Consumption in 2022
Quadrillion Btu (Quads)
Source: CRS using EIA, Annual Energy Outlook, Reference Case Projection Tables 24-34, March 2023.
Notes: Nonmanufacturing (in red) includes mining, agriculture, and construction sectors. Manufacturing includes
other sectors (in blue). Energy consumption for manufacturing includes energy for combined heat and power
plants that have a nonregulatory status and small on-site generating systems.
According to the EIA, the industrial sector consumed about 34% of U.S. total energy in 2022.140
Approximately three-quarters of the energy consumption from this sector is associated with
manufacturing (Figure 18). The bulk chemicals subsector consumes the most energy of 16
140 See EIA, Annual Energy Outlook, Reference Case Projection Table 2, “Energy Consumption by Sector and Source,”
2023, https://www.eia.gov/outlooks/aeo/excel/aeotab_2.xlsx.
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manufacturing subsectors, with an estimated 8.3 Quads in 2022.141 In 2010, the National
Academies estimated that implementing existing, cost-effective efficiency technologies in the
industrial sector could reduce energy consumption by 14%-22%.142 A more recent study by EIA
estimated that industrial sector energy intensity could be reduced by 44% globally between 2018
and 2040.143 Policy options to increase energy efficiency in the industrial sector include
mandatory equipment energy conservation standards and voluntary programs such as the Better
Plants program or ENERGY STAR program.144
Possible Transition to Hydrogen145
Hydrogen currently fulfills important applications in chemical plants and oil refineries, with
roughly 1% of primary energy used towards its manufacture, but does not deliver energy services
to firms and consumers other than in demonstration-scale quantities. Possible uses of hydrogen
include a reimagined transportation system operating on hydrogen fuel cells; industrial process
where hydrogen is burned for heat; and provision of thermal comfort in buildings using fuel cells
or combustion appliances. Nonetheless, cost and performance of hydrogen-utilizing technologies
and their technological readiness are not yet on par with current energy technology, and any
transition would have its own costs.
Hydrogen Production Pathways
Approximately 99% of hydrogen produced in the United States today (10 million metric tons
annually) is sourced from fossil fuels, mostly natural gas.146 Although cost can fluctuate based on
the price of feedstock, hydrogen produced from fossil fuels without carbon capture and storage is
generally the least expensive production pathway in the United States.147 Steam methane
reforming (SMR) of natural gas is the most widespread production pathway, producing 95% of
U.S. hydrogen and 76% of global hydrogen. Coal gasification produces around 4% of hydrogen
in the United States, and 22% of hydrogen globally.148 Ethanol, bio-oils or other liquid biomass
can be converted to hydrogen through a process similar to SMR called biomass-derived liquid
reforming, although biomass-derived liquids are more difficult to reform than natural gas.149
141 EIA, Annual Energy Outlook, Reference Case Projection Table 27, “Bulk Chemical Industry Energy Consumption,”
2023, https://www.eia.gov/outlooks/aeo/tables_ref.php.
142 National Academy of Sciences, National Academy of Engineering, and National Research Council, Real Prospects
for Energy Efficiency in the United States, 2010, p. 15, https://doi.org/10.17226/12621.
143 Energy intensity refers to energy use per unit of gross value added. The projection is for International Energy
Agency (IEA) countries and other major economies as determined by IEA. IEA, Energy Efficiency 2018: Analysis and
Outlooks to 2040, 2018, p. 101, https://www.iea.org/reports/energy-efficiency-2018.
144 Better Plants is a voluntary program administered by DOE for industrial scale energy users (e.g., manufacturers)
who voluntarily set a goal such as reducing energy intensity by 25% over a 10-year period. For more information on
Better Plants, see https://betterbuildingssolutioncenter.energy.gov/better-plants.
145 Martin Offutt, Analyst in Energy Policy, and Lexie Ryan, Analyst in Energy Policy, were the authors of this section.
146 DOE, Office of Fossil Energy (renamed to the Office of Fossil Energy and Carbon Management), Hydrogen
Strategy: Enabling A Low-Carbon Economy, July 2020, p. 5, https://www.energy.gov/sites/prod/files/2020/07/f76/
USDOE_FE_Hydrogen_Strategy_July2020.pdf; DOE, Hydrogen and Fuel Cell Technologies Office, “Hydrogen
Production,” https://www.energy.gov/eere/fuelcells/hydrogen-production, accessed November 22, 2023.
147 Ibid., Hydrogen Strategy, Figure 5, “Current Hydrogen Production Cost Ranges and Averages by Technology and
Equivalent Prices for Fossil Sources with CO2 Capture and Storage.”
148 Ibid.
149 DOE, Hydrogen and Fuel Cell Technologies Office, “Hydrogen Production: Biomass-Derived Liquid Reforming,”
(continued...)
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Producing hydrogen from fossil fuels emits greenhouse gases.150 According to one presentation
by DOE, methane SMR can emit up to 10 kg CO2 equivalent per kg of hydrogen produced.151 In
the future, fossil fuel production pathways could be paired with carbon capture and storage,
which may capture as high as 90% of carbon emissions.152
Approximately 1% of hydrogen produced in the United States, and 2% globally, is produced via
electrolysis, in which electricity splits water in an electrolyzer.153
Other mid- to long-term pathways, including waste streams, direct solar energy, and
algae/cyanobacteria, are not yet commercially viable but offer long-term potential for hydrogen
production with low or no greenhouse gas emissions.154
Hydrogen “Colors”
Some hydrogen producers, marketers, governments, and other organizations refer to hydrogen
using an emblematic color spectrum. Although the labels are not standardized, hydrogen
produced via electrolyzers using renewable electricity is generally referred to as “green
hydrogen”; some organizations view “green hydrogen” as the only acceptable form of
hydrogen.155 Some refer to hydrogen produced from fossil fuels as “blue hydrogen,” if the
separated carbon is captured and sequestered. If no carbon capture is used, hydrogen produced
from coal may be “brown hydrogen” and hydrogen produced from natural gas or petroleum may
be referred to as “gray hydrogen.”156 “Pink hydrogen” may refer to hydrogen produced with
nuclear energy. “Turquoise hydrogen” may refer to pyrolysis of hydrocarbons to produce
hydrogen and solid carbon.
What Is “Clean” Hydrogen?
Congress, along with federal agencies, has used carbon intensity to define “clean” hydrogen. The Inflation
Reduction Act of 2022 (P.L. 117-169) defines hydrogen that qualifies for a new tax credit as “hydrogen which is
produced through a process that results in a lifecycle greenhouse gas emissions rate of not greater than 4
kilograms of carbon dioxide equivalent (CO2e) per kilogram of hydrogen.” Clean hydrogen is not limited to a
specific production pathway. Through the regional clean hydrogen hubs program established by the Infrastructure
Investment and Jobs Act (IIJA, P.L. 117-58), Congress called for the establishment of clean hydrogen hubs that use
a variety of pathways: fossil fuels (paired with carbon capture), renewable energy, and nuclear energy. IIJA defines
https://www.energy.gov/eere/fuelcells/hydrogen-production-biomass-derived-liquid-reforming, accessed November 22,
2023.
150 For hydrogen, these include CO , CH and N O. DOE, Hydrogen and Fuel Cell Technologies Office, Learn to Use
2
4
2
the GREET Model for Emissions Life Cycle Analysis, November 2021, Slide 8, https://www.energy.gov/sites/default/
files/2021-11/h2iq-hour-10282021.pdf.
151 Ibid., Slide 12.
152 Thomas Koch Blank and Patrick Molly, “Hydrogen’s Decarbonization Impact for Industry,” Rocky Mountain
Institute, January 2020, https://rmi.org/wp-content/uploads/2020/01/hydrogen_insight_brief.pdf.
153
DOE, Office of Fossil Energy, Hydrogen Strategy: Enabling A Low-Carbon Economy, July 2020, p. 5,
https://www.energy.gov/sites/prod/files/2020/07/f76/USDOE_FE_Hydrogen_Strategy_July2020.pdf; DOE, Hydrogen
and Fuel Cell Technologies Office, “Hydrogen Production: Electrolysis,” https://www.energy.gov/eere/fuelcells/
hydrogen-production-electrolysis, accessed November 22, 2023.
154 DOE, Office of Energy Efficiency and Renewable Energy, “Hydrogen Production Pathways,”
https://www.energy.gov/eere/fuelcells/hydrogen-production-pathways, accessed November 22, 2023.
155 For example, “The Sierra Club only supports the use of green hydrogen—hydrogen made through electrolysis that is
powered by renewable energy.” Cara Bottoff, “Hydrogen: Future of Clean Energy or a False Solution?,” Sierra Club,
January 4, 2022, https://www.sierraclub.org/articles/2022/01/hydrogen-future-clean-energy-or-false-solution.
156 CRS Report R46436, Hydrogen in Electricity’s Future, by Richard J. Campbell; EIA, “Hydrogen Explained,”
https://www.eia.gov/energyexplained/hydrogen/production-of-hydrogen.php, last updated June 23, 2023.
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clean hydrogen as “hydrogen produced with a carbon intensity equal to or less than 2 kilograms of carbon
dioxide-equivalent produced at the site of production per kilogram of hydrogen produced.” DOE’s Clean
Hydrogen Production Standard (CHPS), developed to meet the IIJA requirements, establishes a target of 4.0
kgCO2e/kgH2 for lifecycle greenhouse emissions.157 CHPS is not a regulatory standard, but hydrogen hubs funded
through the IIJA are required by the law to “demonstrably aid achievement” of the CHPS by mitigating emissions
as much as possible.
What a Hydrogen Economy Might Look Like
In a hydrogen economy (i.e., replacing the current system of fossil fuel-consuming devices that
provide modern energy services), there could be potential applications in all sectors of energy
consumption—transportation, industry, and buildings (residential and commercial).158 Some
advocates of a hydrogen economy focus on established energy applications and target the
replacement of the fuels currently in use—for example, the replacement of petroleum-fueled
internal combustion engines with hydrogen-consuming fuel cell vehicles. Further examples
include the use of hydrogen in steelmaking and, in manufacturing, for high-temperature heat to
support various processes; as an energy storage medium in electric power; and as a substitute for
natural gas in residential buildings.
Potential Benefits
Many multi-national and international commitments and goals refer to a hydrogen economy and
its potential in energy transitions. Examples of such commitments include the 2030 Climate
Target Plan of the European Union, the U.S. goal of net-zero greenhouse gas emissions by 2050,
and the Paris Agreement.159
For industrial applications, hydrogen is a viable alternative to fossil fuels as it burns with
characteristics favorable to providing high-temperature heat, with a flame temperature of about
2,100 degrees Celsius (°C) and emissions of water vapor and potentially nitrogen oxides (NOx).160
Four industry subsectors responsible for roughly half of industrial greenhouse gas (GHG)
emissions—ethylene, ammonia, cement, and steel manufacture combined—generate roughly one157 DOE, “Clean Hydrogen Production Standard Guidance,” https://www.hydrogen.energy.gov/library/policies-acts/
clean-hydrogen-production-standard, accessed November 22, 2023.
158 For statistical purposes, analysts generally organize final consumption or “end use” of energy—the point at which it
performs a useful service and is not merely being extracted, refined, packaged, or transported—into three sectors:
transportation, industry, and buildings (residential and commercial). K. Riahi, F. Dentener, and D. Gielen, et al.,
“Chapter 17: Energy Pathways for Sustainable Development,” in Global Energy Assessment—Toward a Sustainable
Future (Cambridge, UK and New York, NY, USA: Cambridge University Press, 2012), p. 1228; T. Bruckner, I.A.
Bashmakov, and Y. Mulugetta, et al., “Energy Systems,” in Climate Change 2014: Mitigation of Climate Change.
Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change,
ed. O. Edenhofer, R. Pichs-Madruga, Y. Sokona (Cambridge, UK and New York, NY, USA: Cambridge University
Press, 2014).
159 European Commission, EU Climate Target Plan 2030: Building a Modern, Sustainable and Resilient Europe,
September 2020, https://ec.europa.eu/clima/eu-action/european-green-deal/2030-climate-target-plan_en; U.S.
Department of State and Executive Office of the President, The Long-Term Strategy of the United States: Pathways to
Net-Zero Greenhouse Gas Emissions by 2050, Washington, DC, November 2021, https://www.whitehouse.gov/wpcontent/uploads/2021/10/US-Long-Term-Strategy.pdf; Paris Agreement to the United Nations Framework Convention
on Climate Change, adopted by Conference of Parties No. 21, Decision 1/CP.21, U.N. Doc. FCCC/CP/2015/10/Add.1
(December. 12, 2015), annex 1, http://unfccc.int/resource/docs/2015/cop21/eng/10a01.pdf.
160 Combustion of hydrogen might necessitate use of NO reduction technologies. See U.S. EPA, Technology Transfer
x
Network, Nitrogen Oxides (NOx): Why and How They Are Controlled, https://www3.epa.gov/ttncatc1/cica/
other7_e.html.
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third of their CO2 emissions using high-temperature heat (i.e., above 500°C in that study), some
of which could be replaced with hydrogen.161
Hydrogen has been envisaged as a way to decarbonize the transportation sector.162 Most current
passenger vehicles operate off-grid of any energy supply, such as the electric power grid, with
fuel stored on board the vehicle, usually in the form of gasoline or diesel fuel. With on-board fuel
storage, fuel cell electric vehicles (FCEVs) and other hydrogen vehicles can provide personal
mobility without the need to recharge like electric vehicles. The hydrogen to fuel those vehicles
can, depending on the primary resource and its method of conversion, reduce the carbon
intensity163 per passenger mile of mobility.
Combustion of hydrogen can provide space conditioning (thermal comfort), hygienic services
(hot water and clothes drying), and cooking services for occupants of architectural spaces. In such
applications, hydrogen gas could in principle be blended into natural gas transmission and
distribution infrastructure to reach end-users. A second strategy would involve electrifying the
appliances and using a hydrogen fuel cell to provide the necessary electric power on site.
Direct CO2 emissions from combustion of fuel in buildings amounted to 8.2% of global CO2
emissions from all energy-related sources in 2022.164 Hydrogen combustion can reduce CO2
emissions in proportion to the amount of natural gas it replaces; blending in green hydrogen at
5% to 20% by volume would reduce the greenhouse gas emissions of this application by 2% to
7% (the reduction in percentage is because the same volume of hydrogen at environmental
conditions has lower energy than methane).165
Potential Challenges
A transition to a hydrogen economy would require adapting or replacing large parts of today’s
energy system. Hydrogen-consuming appliances, vehicles, and devices are, however, at various
stages of development, and some hydrogen applications may be more feasible than others. The
large build-out that would be needed to establish a hydrogen economy can only occur with
technologies that are sufficiently mature and can be manufactured in volume. One evaluation of
the so-called technology readiness level (TRL) of the component parts of a hydrogen economy
finds that fuel cells and the refueling stations are at a high level of readiness, but short of that
needed for widespread deployment.166 Hydrogen to provide high-temperature heat for industrial
applications is at a lower level of readiness, consistent with prototypes. For applications in
buildings, the TRL is similarly prototype-level for blending hydrogen into natural gas supply
161 Arnout de Pee, Dickon Pinner, and Occo Roelofsen, et al., Decarbonization of Industrial Sectors: The Next
Frontier, McKinsey Sustainability, Amsterdam, The Netherlands, June 2018, p. 7, https://www.mckinsey.com/
business-functions/sustainability/our-insights/how-industry-can-move-toward-a-low-carbon-future.
162 N.P. Brandon and Z. Kurban, “Clean Energy and the Hydrogen Economy,” Philosophical Translations of the Royal
Society A, vol. 375, June 12, 2017; National Research Council and National Academy of Engineering, The Hydrogen
Economy: Opportunities, Costs, Barriers and R&D Needs, Washington, DC, 2004.
163 Carbon intensity can be measured in tons of carbon dioxide equivalent per megawatt-hour (tCO2-eq/MWh) or other
unit of energy, for example, tCO2-eq per Joule (tCO2-eq/J).
164 Direct CO emissions from buildings were 3 gigatons and total CO emissions were 36.8 gigatons in 2022.
2
2
International Energy Agency, Tracking Buildings: CO2 Emissions, July 11, 2023, https://www.iea.org/energy-system/
buildings; IEA, CO2 Emissions in 2022: Key Messages, March 2023, https://www.iea.org/reports/co2-emissions-in2022.
165 Energy Transitions Commission, Making the Hydrogen Economy Possible: Accelerating Clean Hydrogen in an
Electrified Economy, Version 1.2, April 2021, p. 21.
166 IEA, ETP Clean Energy Technology Guide, September 21, 2022, https://www.iea.org/articles/etp-clean-energytechnology-guide.
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pipelines, but is at a higher level, comparable to fuel cell vehicles, for arrangements that use
hydrogen directly.
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Appendix A. Selected U.S. Government Entities and
Their Energy-Related Roles
U.S. Army Corps of Engineers (Corps, USACE)—part of the Department of Defense, the
Army Corps of Engineers manages both federal water resource development projects and
regulated activities affecting certain waters and wetlands, including activities associated with
infrastructure. Corps permits are required where energy infrastructure crosses certain waters,
Corps projects, or Corps-controlled lands.
Bureau of Land Management (BLM)—part of the Department of the Interior, BLM has
oversight of federal lands and manages onshore oil, natural gas, and renewable energy permitting
and operations.
Bureau of Ocean Energy Management (BOEM)—part of the Department of the Interior,
BOEM oversees the safe and environmentally responsible development of energy and mineral
offshore resources.
Bureau of Safety and Environment Enforcement (BSEE)—part of the Department of the
Interior, BSEE oversees offshore worker safety, environmental stewardship, and resource
conservation.
U.S. Coast Guard—part of the Department of Homeland Security, the Coast Guard has oversight
of marine terminals used for the import and export of oil and natural gas as well as the security of
certain hazardous fuel shipments by water.
U.S. Commodity Futures Trading Commission (CFTC)—CFTC has oversight of futures
markets, including those for energy. CFTC was given additional oversight responsibilities for
futures and derivatives under Dodd-Frank legislation.
U.S. Department of Energy (DOE)—a Cabinet-level agency responsible for developing and
implementing national energy policy, energy research and development, basic science, energy
emergency preparedness and security, and defense-related nuclear activities.
U.S. Energy Information Administration (EIA)—an agency within DOE, it provides
independent data and analysis on the U.S. energy sector.
U.S. Environmental Protection Agency (EPA)—EPA has a broad range of authorities and
responsibilities that may impact energy production, transportation, and consumption, particularly
as the agency enforces environmental statutes and regulations and sets national standards. EPA
has oversight/enforcement of all or part of the Clean Water Act; Clean Air Act; Comprehensive
Environmental Response, Compensation, and Liability Act; and the Oil Pollution Act, among
other laws.
Federal Energy Regulatory Commission (FERC)—an independent federal agency which
regulates the interstate transmission of electricity, natural gas, and oil. FERC also issues permits
for LNG terminals and interstate natural gas pipelines as well as licensing nonfederal hydropower
projects.
U.S. Fish and Wildlife Service—Fish and Wildlife has responsibilities for environmental
oversight on energy issues such as wind and hydropower production, and pipeline rights-of-way
through jurisdictional lands.
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U.S. Forest Service—part of the Department of Agriculture, the Forest Service is responsible for
managing energy and mineral resources, and infrastructure development on federal onshore areas
that it owns.
Maritime Administration (MARAD)—an agency within the Department of Transportation that
regulates offshore LNG and oil terminals, and oversees programs that incentivize the offshore
wind industry, including the Port Infrastructure Development (PID) grant program and the
Federal Ship Financing Program (Title XI of the Merchant Marine Act of 1936).
National Highway Traffic Safety Administration (NHTSA)—part of the Department of
Transportation, NHTSA regulates vehicle fuel economy through the CAFE program in
coordination with EPA’s vehicle GHG program.
National Oceanic and Atmospheric Administration (NOAA)—part of the Department of
Commerce, NOAA has jurisdiction over pipeline project construction in coastal and/or ocean
areas.
U.S. Nuclear Regulatory Commission (NRC)—an independent regulatory commission
responsible for licensing and regulation of nuclear power plants and other nuclear facilities.
Office of Energy Efficiency and Renewable Energy (EERE)—part of the Department of
Energy that focuses on energy efficiency, such as appliance standards, and renewable energy.
Office of Fossil Energy and Carbon Management (FECM)—part of the Department of Energy
focusing advancing technologies to reduce the climate and environmental effects from fossil fuel
use, including carbon capture, utilization, and storage, and U.S. oil and gas production. It also has
input into the construction of liquefied natural gas import and export terminals.
Office of Nuclear Energy—part of the Department of Energy responsible for nuclear energy
research and federal nuclear waste storage and disposal facilities.
Pipeline and Hazardous Materials Safety Administration (PHMSA)—part of the Department
of Transportation, PHMSA administers the regulatory program, through the Office of Pipeline
Safety (OPS), to assure the safe transportation of natural gas, petroleum, and other hazardous
materials by pipeline. OPS develops regulations and other approaches to risk management to
assure safety in design, construction, testing, operation, maintenance, and emergency response of
pipeline facilities.
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Appendix B. Selected Energy Laws
Table B-1. Selected
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