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 21^st 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 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 116^th 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 116^th Congress. Provisions from those bills (S. 2657 and H.R. 4447) were incorporated into 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

117^th Congress: Expanded Appropriations and Incentives

The 117^th 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.

118^th Congress, 1^st Session: IIJA/IRA Implementation, Permitting Reform, Critical Minerals/Materials, and Nuclear Energy

Fewer energy-related laws have been enacted in the 1^st Session of the 118^th Congress, although Congress has continued to demonstrate interest in energy policy. As noted above, legislation in the 117^th 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 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).

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%.

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.

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; 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

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 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.

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

Natural Gas: The United States Is a Global Player³⁵

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. Notes: Prices are spot prices and in nominal dollars. Units = dollars per million British thermal unit ($/mmBtu).

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.

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.

Figure 5. U.S. Natural Gas Supply and Demand, 2010-2022 Billion Cubic Feet

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 (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.

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.

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

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 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.

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

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 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).

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/EIA-NaturalGasPipelineProjects.xlsx. EIA's figures are based on its analysis of regulatory filings and industry reports. Note: 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, 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

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.

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.

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.

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.

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 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.

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 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 117^th 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 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 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.)

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 long-lived 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.

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).

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.

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 high-level 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 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

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 non-hydro renewables.

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.

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. 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 small-scale 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 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/. Note: 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 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

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).

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 Light-Duty 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

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.

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 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

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 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 (NO_x).¹⁶⁰ Four industry subsectors responsible for roughly half of industrial greenhouse gas (GHG) emissions—ethylene, ammonia, cement, and steel manufacture combined—generate roughly one-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 pipelines, but is at a higher level, comparable to fuel cell vehicles, for arrangements that use hydrogen directly.

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.

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.

Appendix B. Selected Energy Laws

Appendix C. U.S. Energy Consumption

Figure C-1. Estimated U.S. Energy Consumption in 2022: 100.3 Quadrillion British Thermal Units (Quads)

Source: Department of Energy and Lawrence Livermore National Laboratory, https://flowcharts.llnl.gov/commodities/energy. Notes: "Primary energy" consists of the energy inputs on the left side of the figure. "Rejected Energy," on the left, is the portion of energy that goes into a process and comes out, usually as waste heat, to the environment.

Appendix D. List of Abbreviations

Btu—British thermal unit

CAFE—Corporate Average Fuel Economy standards

CCUS—carbon capture, utilization, and storage

CHPS – clean hydrogen production standard

DRM—demonstrated reserve base

GDP—gross domestic product

GHG—greenhouse gas

IIJA—Infrastructure Investment and Jobs Act

IRA—Inflation Reduction Act

LED—light-emitting diode

LNG—liquefied natural gas

LWR—light water reactor

MTE—CAFE midterm evaluation

MW—megawatts

NGL—natural gas liquids

OCS—outer continental shelf

PHMSA—Pipeline and Hazardous Materials Safety Administration

RES—renewable electricity standard

RGGI—Regional Greenhouse Gas Initiative

RPS—renewable portfolio standard

PRB—Powder River Basin

PV—photovoltaic

Quad—quadrillion Btu

ROWs—rights-of–way

SAF—sustainable aviation fuel

SMR—small modular reactor

SPR—Strategic Petroleum Reserve

TWh—Terawatt-hours

ZEC—zero-emission credit