Last Updated: November 21, 2024

Overview

Alabama is an energy-rich state with reserves of coal, crude oil, and natural gas, as well as renewable energy resources.^1,2 Located along the Gulf of Mexico, southern Alabama consists of a coastal plain with a humid, subtropical climate. The state's north includes the southern edge of the Appalachian Mountains, where below-zero temperatures occur every few years and measurable snow is common.^3,4 Alabama's many rivers flow from the Appalachian highlands toward the Gulf of Mexico, and dams along those rivers generate hydroelectric power. The Tennessee River that runs through north Alabama has several hydroelectric dams operated by the TVA.^5,6,7 Forests cover about 70% of Alabama, and the state has the third-largest timberland acreage in the nation, which gives the state ample biomass resources.^8,9,10

Alabama ranks among the 10 states with the highest total industrial sector energy use, and its industrial sector accounts for two-fifths of the state's total energy consumption.¹¹ Alabama is among the top five states in the energy-intensive manufacture of cars and light trucks, with a production capacity of 1.3 million vehicles annually. Vehicles are Alabama's top export, and it is the largest auto-exporting state.^12,13 The manufacture of automobiles and other transportation equipment; primary metal and fabricated metal products; chemicals; paper; food and beverages; and mining and oil and natural gas extraction are all major contributors to Alabama's economy.¹⁴ The transportation sector accounts for almost three-tenths of the state's total energy consumption. Despite high energy use for cooling during the state's hot, humid summers and widespread home heating in the winter, the residential sector makes up less than one-fifth of state energy use. The commercial sector represents about one-eighth of energy consumption.^15,16,17 Overall, Alabama consumes over 80% more energy than it produces.¹⁸

Electricity

Alabama ranks sixth among the states in the production of electricity.¹⁹ Natural gas has fueled the largest share of electricity in Alabama since 2014 and accounted for 44% of the state's net generation in 2023.²⁰ Of the 10 largest power plants in Alabama by capacity and by actual yearly electricity generation, 7 are natural gas-fired.²¹

Alabama is the nation's fourth-largest producer of electricity from nuclear power.²² Alabama's two nuclear power plants, with a total of five reactors, produced 33% of the electricity generated in the state in 2023. The three reactors at TVA's Browns Ferry nuclear power plant in north Alabama have nearly 3,700 megawatts of combined generating capacity. Browns Ferry is the third-largest U.S. nuclear power plant, after Georgia's Vogtle nuclear power plant with nearly 5,000 megawatts of capacity and Arizona's Palo Verde nuclear power plant with 4,210 megawatts.^23,24,25

Coal historically fueled the largest share of electric power generation in Alabama, but many of the state's older coal-fired generating plants have shut down. Nearly 4,900 megawatts of the state's coal-fired generating capacity have retired since 2013.^26,27 The contribution of coal-fired power plants to Alabama's net generation dropped by more than half since 2013, declining to 14% of the state's total generation in 2023.²⁸

Twenty-three hydroelectric dams on Alabama's rivers and lakes provided 6% of the state's net generation in 2023.^29,30 Alabama is the fifth-largest U.S. conventional hydroelectric power producer and second-largest east of the Rocky Mountains, after New York.³¹ Although only about 2% of the state's total generation is fueled by biomass, Alabama ranks fifth among the states in electricity generation from biomass. Almost all of that generation comes from burning wood and wood-derived fuels from the state's substantial forest products industry.^32,33

Alabama's electricity production exceeds its consumption, and about one-third of the electricity generated in the state is sent to neighboring states over the regional electric grid.³⁴ In 2023, Alabama's residential sector and industrial sector each accounted for 37% of the electricity sold in the state. The commercial sector made up the remaining 26% of the state's electricity sales.³⁵ Total electricity consumption per capita in Alabama is seventh-highest in the nation and per capita electricity use in the residential sector ranks third, due in part to the high demand for air conditioning in the hot summers and the widespread use of electricity for home heating in the winter.^36,37 About 7 out of 10 Alabama households heat with electricity.³⁸

Alabama had about 440 public electric vehicle charging locations in late 2024. Most of these charging locations are in and around the state's major cities of Birmingham, Huntsville, Montgomery, and Mobile.^39,40 Alabama plans to invest about $79 million in federal funds over five years to build charging locations along its designated Alternative Fuel Corridors, spaced no more than 50 miles apart and within one mile off the exits of the state's interstate highways.⁴¹

Coal

Coal has been mined commercially in Alabama since the 1850s and supported development of the state's iron and steel industry.⁴² Alabama holds 1% of U.S. economically recoverable coal reserves. The state ranked 11th in the nation in total coal production and 6th in bituminous coal output, the second most abundant type of coal found in the United States. Bituminous coal is used to generate electricity and to make steel.^43,44 About 92% of the coal produced in Alabama comes from 7 underground mines, and the rest comes from 13 surface mines.⁴⁵ Nearly 90% of the coal mined in Alabama is exported to other countries.⁴⁶ During 2023, the Mobile seaport ranked first in the nation for receiving U.S. coal imports, handling almost two-fifths of total coal imports, and fourth in shipping U.S. coal exports.⁴⁷

About 10% of the coal mined in Alabama is used in the state, and nearly three-fifths of that coal is burned at power plants to generate electricity. Minor amounts of Alabama coal are also delivered to coking plants and other industrial plants in Alabama and several other states.^48,49 Wyoming supplies more than three-fifths of the domestically mined coal consumed in Alabama. All of the Wyoming coal is delivered to power plants, which are the largest coal consumers in Alabama. The rest of the domestic coal consumed in Alabama arrives by train, river barge, and truck from half a dozen other states.⁵⁰

Petroleum

Alabama's economically recoverable crude oil reserves are small—only about 0.1% of the U.S. total.⁵¹ Oil was discovered in west-central Alabama in the mid-1940s a few miles from the border with Mississippi.⁵² Today, a small amount of crude oil is produced from fields in the northwestern and southwestern parts of the state.^53,54 Since reaching a peak of about 22 million barrels in 1980, the state's annual crude oil production has generally declined during the last four decades. Although the state's crude oil production increased slightly between 2010 and 2013, output has fallen every year since then. Production in 2023 dropped to 3.6 million barrels, the lowest since 1956.^55,56,57

Alabama has three petroleum refineries with a combined processing capacity of about 142,000 barrels of crude oil per calendar day. The state's largest refinery is located near Mobile. The second-largest refinery is in Tuscaloosa on the Black Warrior River, and the third and smallest refinery is in Atmore, located northeast of Mobile near the Florida Panhandle border.⁵⁸ The refineries can process a range of domestic and imported crude oils into refined products that include feedstocks for chemical plants, motor gasoline, jet fuel, diesel fuel, residual fuel, and asphalt for local and regional markets. The Mobile refinery began producing diesel fuel from renewable sources in 2023.^59,60,61,62 Alabama receives additional petroleum products from Texas and Louisiana refineries via two major interstate pipelines—the Colonial Pipeline and the PPL Pipeline (formerly known as the Plantation Pipeline). These pipelines move gasoline and other petroleum products through Alabama to supply half a dozen other southern and eastern states.^63,64,65

In 2022, nearly nine-tenths of the petroleum used in Alabama was consumed as transportation fuels, mainly motor gasoline and diesel fuel.^66,67 Conventional gasoline without ethanol can be sold throughout the state, although almost all U.S. gasoline is blended with at least 10% ethanol.^68,69 Alabama has the fourth-lowest average gasoline prices among the states, but it is highest in the nation in gasoline expenditures per capita.⁷⁰ Alabama does not have any ethanol production plants, but the state consumes about 333 million gallons of fuel ethanol per year.^71,72 Alabama has one biodiesel production plant, which can produce 20 million gallons a year, about one-fourth less than the 26 million gallons of biodiesel the state consumes annually.^73,74 The industrial sector consumes about 10% of the state's petroleum, the commercial sector accounts for about 3%, and the residential sector makes up 1% of petroleum use.⁷⁵ About 6 out of 100 Alabama households heat with petroleum products, mainly propane.⁷⁶

Natural gas

Alabama produces natural gas both onshore and offshore in state waters, including in Mobile Bay. The state's proved reserves of natural gas have fallen to about one-fourth of their peak estimate in the early 1990s and now comprise about 0.2% of U.S. total natural gas reserves.^77,78,79 Alabama's annual marketed natural gas production has steadily declined during the past two decades. In 2023, the state's natural gas output fell to its lowest level since the early 1980s and contributed about 0.2% to the nation's total marketed natural gas production.^80,81 About three-fifths of Alabama's natural gas production comes from onshore wells, and most of that onshore production is in the form of coalbed methane—a natural gas produced from coal seams. The state's coalbed methane wells are located primarily in the Black Warrior Basin in northwestern Alabama.^82,83,84

Alabama's natural gas production meets about one-eighth of the state's gas demand.^85,86 The state receives additional natural gas through interstate pipelines, mainly from Mississippi, but large volumes are also shipped south through Tennessee from Pennsylvania and Ohio natural gas fields in the Marcellus and Utica shales. More than four-fifths of the natural gas that enters Alabama continues on to other states, primarily Georgia, Florida, and Mississippi.⁸⁷

An increasing amount of the natural gas consumed in Alabama goes to power plants as fuel for electricity generation. Since 2007, the electric power sector has been the largest natural gas-consuming sector in the state. It received 62% of total natural gas deliveries in 2023. The industrial sector consumed the second-largest amount of natural gas in that year—about 31% of the state's total.^88,89 Although one-fourth of Alabama households use natural gas for heating, the residential sector accounted for about 4% of the state's natural gas consumption. The commercial sector represented about 3% of the state's natural gas use.^90,91

Renewable energy

In 2023, renewable energy sources generated almost one-tenth of Alabama's total in-state electricity. Hydroelectric facilities accounted for 66% of the state's renewable electricity generation. About 25% of Alabama's renewable generation came from biomass, mostly from wood and wood-derived fuels at industrial facilities, and 10% was provided by solar energy.⁹² Alabama's biomass resources also provide feedstock for the state's three commercial wood pellet plants, which have a combined annual production capacity of 683,000 tons—about 5% of the nation's total.⁹³

Alabama's total solar power generation is small, but has increased in recent years.⁹⁴ The state's best solar resources are located in the southeast corner of Alabama and along the state's short Gulf Coast shoreline.⁹⁵ Alabama's first commercial solar farm, with 75 megawatts of solar photovoltaic (PV) generating capacity, began operating in 2016. A 227-megawatt solar farm in northwest Alabama, which is the state's largest, came online in late 2021 to supply power to a large computer data center. The state had 634 megawatts of installed utility-scale (1 megawatt or larger) solar power generating capacity as of mid-2024.^96,97,98 The state currently has little customer-sited, small-scale (less than 1 megawatt) solar generating capacity, such as residential rooftop solar panels.⁹⁹ Alabama has the least installed small-scale solar generating capacity among the states.¹⁰⁰

Alabama has no utility-scale wind generation, but there are a few areas along its Gulf coastline and along stretches of the Appalachian mountain ridges in the northeastern part of the state that have modest wind energy resources.^101,102 In 2021, the U.S. Department of the Interior published a request for proposals to see if there was any interest among energy companies in leasing tracts to develop wind power in federal Gulf of Mexico waters that begin three miles off the Alabama coast. However, the Department later determined there was not sufficient commercial interest in developing Alabama's offshore wind resources, and instead leased areas to develop wind resources in the Gulf of Mexico off the Louisiana and Texas coastlines.^103,104,105

Alabama does not have a renewable portfolio standard or a voluntary renewable energy goal or have a state-wide net metering policy to encourage residential development of renewable-sourced electricity. However, the state does encourage energy savings and efficiency.^106,107 The state has an energy building code for commercial and residential buildings.¹⁰⁸ The state also provides tax incentives to households that convert their primary heating system from natural gas or electricity to a wood-burning system.¹⁰⁹

Endnotes

¹ U.S. Energy Information Administration (EIA), Annual Coal Report (October 30, 2024), Table 15, Recoverable Coal Reserves at Producing Mines, Estimated Recoverable Reserves, and Demonstrated Reserve Base by Mining Method, 2023.
² U.S. EIA, State Profile and Energy Estimates, Alabama, Profile Data, Reserves, Supply & Distribution, Environment, accessed October 21, 2024.
³ University of Alabama, Department of Geography, Physiographic Regions, accessed October 21, 2024.
⁴ Christy, John, "Alabama's Climate, It's the Humidity!," Community Collaborative Rain, Hail & Snow Network, State Climate Series, accessed October 21, 2024.
⁵ Geology.com, Alabama Lakes, Rivers and Water Resources, accessed October 21, 2024.
⁶ Alabama Power, Lakes and Dams, accessed October 21, 2024.
⁷ Tennessee Valley Authority, TVA in Alabama, accessed October 21, 2024.
⁸ USDA Forest Service, Forests of Alabama, 2021.
⁹ Alabama Forestry Commission, Alabama Forest Facts, p. 2, accessed October 21, 2024.
¹⁰ Alabama Forestry Commission, Forest Resource Report 2023, p. 4.
¹¹ U.S. EIA, State Energy Data System, Table C11, Total Energy Consumption Estimates by End-Use Sector, Ranked by State, 2022.
¹² Alabama Department of Commerce, Made in Alabama, Automotive, accessed October 21, 2024.
¹³ The Office of Alabama Governor Kay Ivey, "Governor Ivey Announces Alabama Exports Total $27.4 Billion in 2023, Eclipsing Previous Annual Record for State," Press Release, February 12, 2024.
¹⁴ U.S. Bureau of Economic Analysis, Interactive Data, Regional Data, GDP and Personal Income, Annual Gross Domestic Product (GDP) by State, SAGPD2 GDP in current dollars, Alabama, All statistics in table, 2023.
¹⁵ U.S. EIA, State Energy Data System, Table C11, Total Energy Consumption Estimates by End-Use Sector, Ranked by State, 2022.
¹⁶ U.S. Census Bureau, House Heating Fuel, Table B25040, 2023 ACS 1-Year Estimates Detailed Tables, Alabama.
¹⁷ U.S. EIA, Residential Energy Consumption Survey, 2020 RECs Survey Data, State Data, Housing characteristics, Highlights for air conditioning in U.S. homes by state, 2020, and Highlights for space heating in U.S. homes by state, 2020.
¹⁸ U.S. EIA, State Energy Data System, Table P3, Total Primary Production and Total Energy Consumption Estimates in Trillion Btu, 2022.
¹⁹ U.S. EIA, Electric Power Monthly (February 2024), Table 1.3.B.
²⁰ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
²¹ U.S. EIA, State Electricity Profiles, Alabama Electricity Profile 2023, Tables 2A, 2B.
²² U.S. EIA, Electric Power Monthly (February 2024), Table 1.9.B.
²³ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
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²⁸ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
²⁹ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
³⁰ U.S. EIA, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Operating Generators as of September 2024, Plant State: Alabama, Technology: Conventional Hydroelectric.
³¹ U.S. EIA, Electric Power Monthly (February 2024), Table 1.10.B.
³² U.S. EIA, Electric Power Monthly (February 2024), Table 1.15.B.
³³ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
³⁴ U.S. EIA, State Electricity Profiles, Alabama Electricity Profile 2023, Table 10, Supply and disposition of electricity, 1990 through 2024.
³⁵ U.S. EIA, Electricity Data Browser, Retail sales of electricity (million kilowatthours), annual, Alabama, 2001-23.
³⁶ U.S. EIA, Residential Energy Consumption Survey, 2020 RECs Survey Data, State Data, Housing characteristics, Highlights for air conditioning in U.S. homes by state, 2020, and Highlights for space heating in U.S. homes by state, 2020.
³⁷ U.S. EIA, State Energy Data System, Table C17, Electricity Sales to Ultimate Customers, Total and Residential, Total and per Capita, Ranked by State, 2022.
³⁸ U.S. Census Bureau, House Heating Fuel, Table B25040, 2023 ACS 1-Year Estimates Detailed Tables, Alabama.
³⁹ U.S. EIA, Monthly Energy Review (October 2024), Appendix F monthly state file, XLS, Public ports only, Public & Private ports.
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⁴⁴ U.S. EIA, Energy Explained, Coal explained, Types of coal, Bituminous, updated October 24, 2023.
⁴⁵ U.S. EIA, Annual Coal Report (October 30, 2024), Table 2, Coal Production and Number of Mines by State, County, and Mine Type, 2023.
⁴⁶ U.S. EIA, Annual Coal Distribution Report (October 30, 2024), Domestic and foreign distribution of U.S. coal by origin State.
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⁴⁹ U.S. EIA, Annual Coal Distribution Report (October 30, 2024), Domestic Distribution of U.S. coal by origin State, consumer, destination and method of transportation, Table OS-1, Alabama, 2023.
⁵⁰ U.S. EIA, Annual Coal Distribution Report (October 30, 2024), Domestic Distribution of U.S. coal by destination State, consumer, destination and method of transportation, Table DS-1, Alabama, 2023.
⁵¹ U.S. EIA, U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2022 (April 29, 2024), Table 6.
⁵² Hall, Douglas R., and David E. Bolin, The Petroleum Industry in Alabama, 1999-2007, Oil and Gas Report 3U, Geological Survey of Alabama (2009), p. 1-2.
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⁵⁷ State of Alabama Oil & Gas Board, State of Alabama Calendar Year Oil and Gas Production, 1944-2022.
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⁶² Brelsford, Robert, "Vertex Energy's Mobile refinery begins renewable diesel production," Oil & Gas Journal (May 1, 2023).
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⁶⁶ U.S. EIA, State Energy Data System, Table F16, Total Petroleum Consumption Estimates, 2022.
⁶⁷ U.S. EIA, State Energy Data System, Table C2, Energy Consumption Estimates for Selected Energy Sources in Physical Units, 2022.
⁶⁸ Southern States Energy Board, Gardner, K. W., U.S. Gasoline Requirements, (January 2018).
⁶⁹ U.S. EIA, "Almost all U.S. gasoline is blended with 10% ethanol," Today in Energy (May 4, 2016).
⁷⁰ U.S. EIA, Table E20, Motor Gasoline Price and Expenditure Estimates, Ranked by State, 2022.
⁷¹ U.S. EIA, U.S. Fuel Ethanol Plant Production Capacity (August 15, 2024), Detailed annual production capacity by plant is available in XLSX format.
⁷² U.S. EIA, State Energy Data System, Table F25, Fuel Ethanol Consumption Estimates, 2022.
⁷³ U.S. EIA, U.S. Biodiesel Plant Production Capacity (August 15, 2024), Detailed annual production capacity by plant is available in XLSX format.
⁷⁴ U.S. EIA, State Energy Data System, Table F30, Biodiesel Consumption Estimates, 2022.
⁷⁵ U.S. EIA, State Energy Data System, Table F16, Total Petroleum Consumption Estimates, 2022.
⁷⁶ U.S. Census Bureau, House Heating Fuel, Table B25040, 2023 ACS 1-Year Estimates Detailed Tables, Alabama.
⁷⁷ U.S. EIA, Natural Gas Gross Withdrawals and Production, Gross Withdrawals, Annual, 2018-23.
⁷⁸ U.S. EIA, Natural Gas Reserves Summary as of Dec. 31, Wet NG, 2016-21.
⁷⁹ U.S. EIA, U.S. Crude Oil and Natural Gas Proved Reserves, Year-end 2022 (April 29, 2024), Table 8.
⁸⁰ U.S. EIA, Alabama Natural Gas Marketed Production, 1967-2023.
⁸¹ U.S. EIA, Natural Gas Gross Withdrawals and Production, Marketed Production, Annual, 2018-23.
⁸² U.S. EIA, Natural Gas Gross Withdrawals and Production, Marketed Production, Annual, 2018-23.
⁸³ U.S. EIA, Natural Gas Gross Withdrawals and Production, Gross Withdrawals from Coalbed Wells, Annual-Million cubic feet, 2018-23.
⁸⁴ Encyclopedia of Alabama, Alabama Oil and Gas Regions, accessed October 24, 2024.
⁸⁵ U.S. EIA, Natural Gas Gross Withdrawals and Production, Marketed Production, Annual, 2018-23.
⁸⁶ U.S. EIA, Natural Gas Consumption by End Use, Alabama, Annual, 2018-23.
⁸⁷ U.S. EIA, International and Interstate Movements of Natural Gas by State, Alabama, Annual, 2018-23.
⁸⁸ U.S. EIA, Alabama Natural Gas Deliveries to Electric Power Customers, 1997-2023.
⁸⁹ U.S. EIA, Natural Gas Consumption by End Use, Alabama, Annual, 2018-23.
⁹⁰ U.S. Census Bureau, House Heating Fuel, Table B25040, 2023 ACS 1-Year Estimates Detailed Tables, Alabama.
⁹¹ U.S. EIA, Natural Gas Consumption by End Use, Alabama, Annual, 2018-23.
⁹² U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
⁹³ U.S. EIA, Monthly Densified Biomass Fuel Report (October 1, 2024), Table 1, Densified biomass fuel manufacturing facilities in the United States by state, region, and capacity, July 2024.
⁹⁴ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
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⁹⁶ Smith, Tom, "River Bend Solar Energy Center operational, selling solar power," Times Daily (November 20, 2016).
⁹⁷ Sylvia, Tim, "Project enters service in Alabama, nearly doubling the state's installed solar capacity," PV Magazine (September 20, 2021).
⁹⁸ U.S. EIA, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Operating Generators as of September 2024, Plant State: Alabama, Technology: Solar Photovoltaic.
⁹⁹ U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
¹⁰⁰ U.S. EIA., Electric Power Monthly (October 24, 2024) Table 6.2.B, Net Summer Capacity Using Primarily Renewable Energy Sources and by State, August 2024 and 2023 (Megawatts), Small Scale Capacity, Estimated Solar Photovoltaic.
¹⁰¹ U.S. Department of Energy, Energy Efficiency and Renewable Energy, WINDExchange, Wind Energy in Alabama, Maps & Data, accessed October 25, 2024.
¹⁰² U.S. EIA, Electricity Data Browser, Net generation for all sectors, annual, Alabama, 2001-23.
¹⁰³ U.S. Department of the Interior, "Interior Department to Explore Offshore Wind Potential in the Gulf of Mexico," Press Release (June 8, 2021).
¹⁰⁴ U.S. Department of the Interior, "BOEM Designates Two Wind Energy Areas in Gulf of Mexico Press Release," (October 31, 2022).
¹⁰⁵ U.S. Department of the Interior, "Biden-Harris Administration Holds First-Ever Gulf of Mexico Offshore Wind Energy Auction," Press Release (August 29, 2023).
¹⁰⁶ National Council of State Legislatures, State Renewable Portfolio Standards and Goals, updated August 13, 2021.
¹⁰⁷ NC Clean Energy Technology Center, DSIRE, Programs, accessed October 25, 2024.
¹⁰⁸ NC Clean Energy Technology Center, DSIRE, Alabama Energy Code, updated March 10, 2023.
¹⁰⁹ NC Clean Energy Technology Center, DSIRE, Wood-Burning Heating System Deduction, updated February 14, 2024.