API: The State of American Energy Report 2015

TheAmerican Petroleum Institute
The American Petroleum Institute (API) is a
national trade association that represents
all segments of America’s innovation-driven
oil and natural gas industry. Its more than
600 members — including large integrated
companies, exploration and production,
refining, marketing, pipeline, marine shipping
and support businesses, and service and
supply firms — provide most of the nation’s
energy and are backed by a growing
grassroots movement of more than 27 million
Americans. The industry also supports 9.8
million U.S. jobs and 8 percent of the U.S.
economy, delivers $85 million a day in
revenue to our government1
and, since
2000, has invested more than $3 trillion
in U.S. capital projects to advance all
forms of energy.2
Table of Contents
Our Energy Tomorrow.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Jack Gerard, The American Petroleum Institute
America’s Petroleum Renaissance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The American Petroleum Institute
Nuclear Energy Reliably Powers America.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Nuclear Energy Institute
Hydropower | A Wave of Potential for a Renewable Energy Future.. . . . . . . . . . . . . . . . . . . . . . 13
The National Hydropower Association
Solar Energy in America Shines Bright. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Solar Energy Industries Association
Geothermal Power | Renewable Energy from the Earth’s Warmth. . . . . . . . . . . . . . . . . . . . . . . 21
The Geothermal Energy Association
Special Section | Infrastructure — The Essential Link to a Secure Energy Future. . . . . . . . . 25
Natural Gas | America’s Abundant, Clean Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
The Attributes of Wind Energy are Adding Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The American Wind Energy Association
Electricity from Coal is a Vital, But Threatened, Energy Source.. . . . . . . . . . . . . . . . . . . . . . . . . 37
The American Coalition for Clean Coal Electricity
Biomass Power | Ready, Proven and Cost-Effective Energy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
The Biomass Power Association
Energy Efficiency | A Great American Success Story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
The American Council for an Energy-Efficient Economy
Conclusion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

America now occupies a position of energy
leadership that was unthinkable a short
time ago. Gone are the days of uncertainty
and concern over having the supply of
energy we need, when we need it. Today,
the United States is the world’s top producer
of natural gas,3
the world’s leading refiner
of petroleum products,4
and very soon
could be the leading producer of oil.5
These
developments are strengthening America’s
energy and economic security and benefiting
tens of millions of individuals, from current
and future workers in the industry to those
who have pension plans or 401(k) retirement
accounts that invest in oil and natural gas
companies,6
and for every American every
day in maintaining a high quality of life.
But this is only part of America’s larger energy
story.The United States is in the midst of
a new era in domestic energy abundance
characterized by rising use of renewable
energy7
and increased oil and natural gas
production that is strengthening our economic
outlook8
and enabling America to emerge as a
global energy superpower.9
It is a remarkable
transformation that has been made possible
because America is uniquely rich in energy
resources, a talented workforce and cutting-
edge energy technologies. Nuclear energy,
fossil fuels and renewable energy sources
alike are vital components of the larger
energy portfolio working to keep our economy
moving.10
And with both world and U.S.
energy demand expected to increase in the
future,11
the continued availability of the full
range of America’s energy resources will grow
in importance.
Today, different sectors of the economy rely
on certain forms of energy. Transportation
is largely fueled by oil, while electricity
generation is powered by coal, nuclear,
natural gas and renewables.12
Looking
ahead a quarter century from now, this is
not expected to change,13
which means each
energy source — from oil and natural gas to
solar and wind energy; from coal and nuclear
to hydropower, geothermal and biomass —
will remain essential to successfully meet
America’s future energy needs.
Such is the current State of American
Energy, and hence, the emphasis of API’s
2015 report. Rather than focus solely on the
oil and natural gas industry, API this year
is pleased to partner with organizations
representing various energy sectors to
highlight the contributions of each toward
America’s current and future economic well-
being, and collectively stress the importance
of adopting a lasting “all of the above”
energy strategy.
Energy is inseparable from America’s
economic growth and job creation, upon
which rests a thriving quality of life and secure
future for generations to come.The constant
pursuit of innovation, driven by both robust
competition and entrepreneurial spirit, has
enabled the United States to safely develop
a spectrum of energy resources.With smart
public policy choices and a regulatory system
that supports domestic energy opportunities,
the United States can realize a prosperous
energy tomorrow characterized by energy
abundance and economic security.
Jack N. Gerard
President and CEO
API
OUR ENERGY TOMORROW | 3
U.S. Energy Consumption by Sector, 2012
U.S. Energy Consumption by Sector, 2040
Source: AEO 2014, Tables A2 and A17, May 2014
Source: AEO 2014, Tables A2 and A17, May 2014
Primary Energy Consumption by Sector and Fuel TypeTotal Energy Consumption by Fuel
Transportation
Industrial
Renewable
Energy
12%
Nuclear
Power
8%
39% 44% 12% 5%
81%
38% 19% 25% 16%
7% 6%
14% 5%
Oil
32%
Natural Gas
30%
Coal
18%
Residential and Commercial
Electric Power
87%
Oil Natural Gas Coal Renewable Energy Nuclear Power
Primary Energy Consumption by Sector and Fuel TypeTotal Energy Consumption by Fuel
Transportation
Industrial
Renewable
Energy
9%
Nuclear
Power
8%
40% 43% 7% 10%
76%
41% 21% 25% 12%
1%
3% 5%
17% 6%
Oil
37%
Natural Gas
28%
Coal
18%
Residential and Commercial
Electric Power
92%
Oil Natural Gas Coal Renewable Energy Nuclear Power
2 |
Energy is
inseparable
from America’s
economic growth
and job creation,
upon which
rests a thriving
quality of life
and secure future
for generations
to come.
Our Energy Tomorrow

Oil has been the foundation of the expansion
and modernization of America’s economy
for more than a century.While the United
States in recent history largely looked to
foreign nations to satisfy its demand for oil,
new cutting-edge technologies now enable
America to capitalize on abundant domestic
petroleum resources to increasingly meet its
own current and future energy needs.
The results are striking. Since 2008,America’s
crude oil production has surged by 70 percent,
rising from an average of 5 million barrels per
day in 2008 to 8.6 million barrels per day in
August 2014.14
At its current production rate,
the United States is anticipated to surpass
both Saudi Arabia and Russia, historically two
top energy producers, to become the world’s
largest producer of oil this year.15
Not surprisingly, America’s new era in oil
production has reverberated throughout the
economy. The oil and natural gas industry
contributed $1.2 trillion to U.S. Gross
Domestic Product (GDP) in 2011, and
at a time when other industries have
been slow to add jobs in the wake of the
recent recession, the oil industry supports
9.8 million jobs across the nation, up
600,000 from just two years earlier.16
Looking to tomorrow, petroleum will continue
to be fundamental to America’s economic
growth and prosperity. Oil represents the
lifeblood of the U.S. economy, providing for
more than one-third of our current energy
needs, and this is not expected to change
significantly over the next quarter century.17
With smart policies that encourage the safe
production, transport and refining of North
America’s abundant oil supplies, the United
States can continue to be a global economic
and energy leader well into the future.
A Foundation for America’s
Economic Recovery
The oil industry has been a steady source of
growth and job creation in a still-struggling
economy, and families and local communities
are reaping the benefits. The industry
supports 8 percent of the U.S. economy.18
The refining industry alone, which plays
a critical role in powering America’s
economic engine by producing fuels and
petrochemicals, supports $289 billion in
U.S. GDP and another 529,000 jobs.19
At the
height of the recession when the economy
was losing jobs, direct employment in
extraction grew by more than 300,000 jobs
between 2009 and 2011, according to two
reports from consulting firm PwC US.20
Jobs in the industry span a number of
specialized fields, and workers earn
higher-than-average wages — in fact,
nearly double the national average wage
across all industries.21
Career opportunities
will continue to grow with the industry,
particularly among women and minorities.
Of the nearly 1.3 million new job
opportunities expected to be created by
2030, 408,000 of them are projected to
be held by African-American and Hispanic
workers, and women are expected to fill
185,000 of them.22
AMERICA’S PETROLEUM RENAISSANCE | 54
SE
CU
RE
America’s Petroleum Renaissance
Looking to
tomorrow,
petroleum will
continue to be
fundamental
to America’s
economic growth
and prosperity.

requirements for vehicles have changed to
make them more efficient and produce up
to 99 percent fewer emissions, the refining
industry has successfully met the need for
these cleaner-burning fuels. In fact, meeting
new vehicle emission requirements are
largely possible through fuel advancements
achieved at refineries.25
Just as important is oil’s substantial
contribution to specific industry sectors
that factor significantly into U.S. economic
growth. The transportation sector, which
accounts for nearly 28 percent of energy
demand today,26
relies on oil to meet
92 percent of its energy needs.27
The
industrial sector uses oil for 40 percent of its
primary energy requirements. In 25 years,
this is projected to change very little. The
transportation sector will still rely on oil for
87 percent of its energy needs in 2040,
and the industrial sector will need oil for
39 percent of its primary energy requirements.28
Oil is an essential energy resource that
plays a crucial role in the economy today,
and it will be equally indispensable to our
economic future. No other transportation
fuel provides more energy by volume than
gasoline and diesel or is more easily stored
as an energy source in cars and trucks.29
Like all of America’s energy sources, it must
be encouraged if the economy is to thrive.
Ensuring the Availability of Petroleum
Oil can continue to be an affordable,
abundant and readily available energy
source for consumers and businesses, and
help fuel the economy well into the future,
but public policies must keep pace with our
energy revolution.
A strong domestic refining industry is
essential to America’s energy and economic
security. Cleaner-burning gasoline and diesel,
as well as biofuels, jet fuel and heating oil,
fuel our homes and businesses and enable
the movement of goods and people that is
essential to a growing economy. Thanks to
more efficient operations, U.S. refiners have
increased capacity by roughly 16 percent
over the past two decades30
and today are
refining near record amounts of crude oil.31
America became a net exporter of petroleum
products in 2011,32
demonstrating the
economic advantages of a robust domestic
refining base that has access to overseas
markets while meeting U.S. demand.
We must also support vital infrastructure
projects, such as the Keystone XL pipeline.
This much-needed addition to America’s
energy infrastructure would have the
capacity to transport up to 830,000
barrels of oil a day.33
Adding to the already
operational southern leg, Keystone would
bring both Canadian and U.S. oil to refineries
for processing. Additionally, about 10 percent
of the pipeline’s capacity could also be
used to bring oil produced in remote areas
of North Dakota and Montana to market.34
Approving Keystone will enable the U.S. to
make significant strides toward meeting all
of its liquid fuel needs from
North American oil by 2024,35
and create and
enhance efficiencies between the production
and refining sectors.
Also, federal lands and offshore resources
must be opened for development. Developing
oil and natural gas resources that have been
kept off-limits by Congress could result
in more than $1.85 trillion in government
revenue over the life of the resource.36
Recent
studies by Quest Offshore estimated that
opening up offshore regions in the Atlantic,
Pacific and the eastern Gulf of Mexico for
development could result in 839,000 new jobs
and generate $38 billion per year for state and
federal governments by 2035.37
Finally, with the United States on the verge
of becoming the world’s largest oil producer,
eliminating trade restrictions dating back
to the 1970s that prohibit crude oil exports
would strengthen America’s position as
an energy resource to the world and its
economic outlook. A recent study concluded
that allowing crude oil exports could save
consumers as much as $5.8 billion a year
in lower fuel costs and add up to 300,000
jobs.38
In fact, the 2014 U.S. trade deficit
through August, all else equal, was nearly
18 percent lower due to petroleum product
exports, according to data from the U.S.
Census Bureau.39
Oil is vital to sustaining our economy now
and in the decades to come. By making
sound decisions today, America can continue
to reap the benefits of this vast domestic
resource and ensure a prosperous future.
As the industry expands, its strong
commitment to safe operations remains
unwavering. The API Standards Program
has developed more than 600 industry
standards, and more than 100 of them have
been cited in existing federal regulations.23
These standards, along with the creation
of the Center for Offshore Safety and
development of the API Process Safety Site
Assessment Program to conduct safety
systems assessments at refineries, help the
industry continue its strong safety record.
An Essential Source of Energy Tomorrow
The rise in U.S. oil production has provided
needed economic stimulus and been
a valuable source of job creation, but
petroleum’s importance to the economy is
much more profound. As America engages
in important discussions about future energy
use, oil’s strong connection to our economic
prosperity cannot be overstated.
Simply put, sustaining even modest
economic growth in the years to come
will require significantly more energy
production. U.S. energy demand through
2040 is expected to increase by 12 percent,
according to the U.S. Energy Information
Administration.24
Oil will play a fundamental
role in meeting our future energy demand
and fueling America’s economic growth and
prosperity in decades to come.
For consumers, U.S. refineries will continue
to produce cleaner gasoline and diesel
fuel for use in cars and trucks. As fuel
AMERICA’S PETROLEUM RENAISSANCE | 76 |
America’s Petroleum Renaissance

Nuclear energy’s contributions to the
U.S. economy extend beyond being
a dependable source of clean power
generation. Construction of new facilities
is driving job growth and economic
development in numerous communities,
providing valuable stimulus today and
positioning nuclear energy to meet America’s
growing demand for power in the future.
Later this year, the Tennessee Valley
Authority is expected to begin generating
electricity at a new Watts Bar reactor in
east Tennessee — the first nuclear energy
project in America since the company started
producing electricity at its first Watts Bar
reactor nearly 20 years ago.
Five reactors are now under construction
in the Southeast and all projects in this
$30 billion expansion are more than halfway
completed and tracking well relative to
budget and schedule.
These are among the largest construction
projects in the United States. Two advanced-
design reactors being built at the Vogtle site
near Augusta, Ga., represent the largest
construction project in Georgia history —
creating 5,000 jobs and driving vigorous
economic development. A typical U.S.
reactor contributes $470 million a year to
the local economy40
and typically is the
most significant taxpayer in the region.
Moreover, the construction of new reactors
in the United States and globally has created
thousands of new jobs throughout the
American nuclear energy sector.
It’s an enterprising time for the nuclear
industry; lessons learned from these projects
will help streamline the development of
subsequent reactors that reinforce nuclear
energy’s prominent role in America’s
balanced energy portfolio.
A diversified portfolio of fuel and technology
to supply power is fundamental to a reliable
and affordable electricity system, and
low-carbon sources will become ever-more
valuable. One hundred nuclear energy
facilities in 30 states produce nearly
790 billion kilowatt-hours of electricity
each year41
— more electricity than used
by all but four countries from all power
sources in the same period.42
As the energy industry and policymakers
alike manage one of the most transformative
periods in the electric sector, nuclear energy
assets continue to provide a unique blend
of valuable attributes: 24/7 large-scale
electricity at sector-leading efficiency and
reliability without producing greenhouse
gases or other air pollution. In fact, this value
proposition is why 72 new reactors are under
construction worldwide43
and another 174
nuclear projects are being planned.44
At the same time, some operating reactors
are economically challenged in competitive
markets due to price pressure from
renewable portfolio standards and other
market factors. In 2013, the Kewaunee
nuclear plant in Wisconsin, a highly efficient
reactor that produced affordable electricity,
closed due to a confluence of market factors.
Late in 2014, Vermont Yankee closed under
similar circumstances.
Other nuclear facilities are at risk, including
top-performing plants boasting 90-plus
percent capacity factors and exceptional
safety levels. As policymakers map the
transition to a next-generation energy
grid, they must systematically inventory
the attributes of electricity sources that
have value and then recognize that value
in market designs, policies and operating
practices. Absent this valuation, America
runs the risk of losing valuable assets in its
electricity grid and, in the process, reducing
a central attribute of the American power
delivery system: its diversity.
America’s Leading Low-Carbon
Power Source
Nuclear energy generates 63 percent of
America’s carbon-free electricity. It prevents
carbon emissions and provides clean air
compliance value, which the industry
believes will have significant value as
the U.S. Environmental Protection Agency
develops a program to reduce CO2 by
30 percent by 2030. Analyses by EPA,45
the Energy Information Administration46
and others clearly demonstrate that nuclear
energy must play a significant role to meet
national or regional carbon-reduction goals.
Nuclear plants provide large-scale electricity
production, clean air, price stability and the
highest reliability of any electricity-generating
source. However, current market policies
NUCLEAR ENERGY RELIABLY POWERS AMERICA | 9
Nuclear Energy Reliably Powers America

The emergency response centers are
fully operational and capable of delivering
equipment to any U.S. location within 24 hours.
Maximizing Today’s Reactors, Building
for the Future
The NRC last year finalized the process for
companies to apply for a second renewal
of nuclear power plant operating licenses
under existing regulations.This was critically
important to enable nuclear power to meet
future energy demand as initial licenses
allow plants to operate for 40 years; license
renewals allow for additional 20-year periods
of operation. More than 70 percent of existing
reactors have been approved for license
renewal,52
and many are beginning to explore
the feasibility of operating for up to 80 years,
as long as they continue to meet stringent
federal safety regulations.
Without a second license renewal period,
more than 36,000 megawatts of nuclear
energy will close by 2036. For electric
system planning purposes, that’s not far into
the future. Maintaining nuclear energy at
20 percent of America’s electricity supply
will require 54,000 megawatts of new
nuclear generation coming online in the next
25 years — or two large reactors each year.
To provide additional options for electric system
planners, the industry is developing small
modular reactor designs.Two designs are being
advanced in a cost-share program with the U.S.
Department of Energy.53
Small, scalable nuclear
energy facilities will be an important addition to
the global nuclear energy market, particularly
for emerging economies. Here at home, they
will enhance energy security and expand
nuclear energy’s important role in reducing
carbon emissions from the electric sector.
Small reactors, generally less than
300 megawatts in electric-generating capacity,
are not a substitute for larger reactors.They
give electric utilities more options for cleanly
generating electricity at a lower capital outlay,
including potential replacements for coal-fired
plants that are closing.The industry expects
the NRC to begin reviewing small reactor
designs within two to three years.
The long-term prospects for nuclear energy
remain strong.Even with modest economic
growth over the next two decades,the Energy
Information Administration forecasts a 28 percent
increase in electricity demand by 2040.54
That will require approximately 400 new, large
power plants to meet increased 24/7 electricity
demand and replace closed power plants.
Many mainstream, independent analyses of
climate change conclude that nuclear energy
must be expanded to meet rising electricity
demand while reducing greenhouse gas
emissions.55
To succeed in this endeavor,
the United States must establish a
comprehensive and sustainable national
policy that supports the development of
technology-neutral, zero-carbon solutions
like solar, nuclear energy, hydropower and
wind. This policy must be implemented in the
near term and be affordable for consumers.
Therein lies the value of nuclear energy.
and practices do not accord value to these
attributes. The total value proposition of
nuclear energy is, unfortunately, not fully
recognized and realized.
The industry in 2014 launched a broad-
based awareness campaign47
— led
by former Governors and Senators
Evan Bayh and Judd Gregg — to ensure
that opinion leaders and the public
understand the strategic value of nuclear
plants and the fact that some nuclear
facilities are at risk of premature closure.
The aim is to begin a dialogue on the
evolving energy landscape and potential
policy solutions that will maintain these
baseload assets, and create an environment
that can lead to the necessary policy
changes at the state and regional levels.
Global Leader in Safety
The U.S. nuclear industry is the global
leader in nuclear energy safety, due to the
combined efforts of the industry’s workforce
and the independent Nuclear Regulatory
Commission (NRC). This commitment to
safety is fundamental to the industry’s future.
The NRC is recognized as the global leader in
safety regulation, and the agency is building
on this record and evolving its priorities and
practices along with the changing industry.
The NRC is in the formative stages of
transitioning to a modern, disciplined and
efficient regulatory system that maintains
its commitment to safety, but with a greater
focus on regulatory efficiency and discipline
for prioritizing regulations and requirements
that have a direct benefit to safety.48
The
challenge is to continually prioritize regulatory
initiatives and, in some cases, eliminate those
actions that have minimal or no safety benefit.
During the past three years, the industry has
spent approximately $3 billion on nuclear
plant upgrades as a result of lessons learned
from the Fukushima accident in Japan49
and
NRC requirements for enhancing protective
strategies against extreme natural events.50
In response, the industry developed the FLEX
strategy, an effective and tailored approach
to providing layer upon layer of backup
power and reactor cooling at each U.S.
nuclear power plant.51
All U.S. companies are adding portable safety
equipment at their nuclear energy sites and
working together to manage additional portable
safety equipment at two national response
centers in Phoenix,Ariz. and Memphis,Tenn.
ONENUCLEAR
ENERGY FACILITY
POWERS
690,000
HOMES
EVERY DAY
EMITSLESS CARBON
THANONE
HYBRIDCAR
= <
NUCLEAR ENERGY RELIABLY POWERS AMERICA | 11
Nuclear Energy Reliably Powers America
(Source:Based on EIA data at EIA.gov/tools/faqs/faq.cfm?id=104&t=3)

EX
PA
ND
For well over a century, hydropower has
been a reliable, low-cost, clean component
of America’s electricity portfolio. It powered
the nation through the Great Depression
and helped fuel our war effort during World
War II, becoming a mainstay of economic
growth and national security. Today, it
continues to play an essential role in our
energy mix and promises to expand that role
with tens of thousands of untapped clean-
energy megawatts.
Hydropower is the nation’s largest source of
renewable electricity. With 80 gigawatts of
conventional and 20 gigawatts of pumped
storage, hydropower provides numerous
electrical, economic and environmental
benefits. In 2013, it provided enough electricity
for 25 million American homes to have access
to clean, reliable, low-cost electricity.56
Hydropower provides baseload power
critical to integrating greater amounts of
intermittent renewable energy sources like
wind and solar into the electricity grid. And
“pumped storage” — energy that is stored
by pumping water to a higher elevation
reservoir that can be released when energy
is needed — constitutes the vast majority
of the nation’s current energy storage
capacity, which is critical in balancing
other intermittent renewable resources and
ensuring grid reliability.
Hydropower facilities can quickly go from
zero power to maximum output, making
them exceptionally good at meeting rapidly
changing demands for electricity throughout
the day. Long project life spans and zero fuel
costs provide electricity at low-cost to tens
of millions of Americans from coast to coast.
Requiring nothing more than the flow of
moving water, hydropower does not produce
air pollution or toxic by-products.
Making an Economic Impact …
with Room to Grow
Hydropower’s positive economic impact is
felt all over the country. Keeping the more
than 2,000 hydropower facilities functioning
optimally employs approximately 300,00057
domestic workers and a supply chain of
more than 2,500 companies from coast
to coast. And every state in the country
gets electricity from hydropower. While
hydropower is certainly a critical resource in
the Northwest, states such as Alabama, New
York, North Carolina, Tennessee, and Arizona
are among the top ten hydropower producing
states in the nation.
Moreover, hydropower is a sustainable
resource, which, in an era of concern over
climate change and emissions, is an integral
part of the solution to address climate issues
and increase renewable energy generation.
It was responsible for avoiding nearly
200 million metric tons of carbon pollution
in 2013,58
and new technologies and
improved fish passage have helped reduce
the industry’s environmental footprint.
With its impressive remaining growth
potential, there is an important place
for hydropower in the nation’s energy
tomorrow. A 2010 study done by Navigant
Consulting found that 60,00059
megawatts
(MW) of new hydropower capacity could
be added in 15 years with the right policies
Hydropower
is the nation’s
largest source
of renewable
electricity.
HYDROPOWER | A WAVE OF POTENTIAL FOR A RENEWABLE ENERGY FUTURE | 13
Hydropower | A Wave of Potential for a Renewable Energy Future

in place. Much of this development would
not require the construction of new, large
water infrastructure. In fact, as much as
10,000 MW could be achieved from capacity
upgrades at existing plants.
Expanding hydropower would do more than
just create new clean energy generation.
It would create new job opportunities as
well. Navigant estimated that pursuing the
60,000 MW identified in the report could
support 1.7 million cumulative jobs.
Two recent reports from the U.S. Department
of Energy confirmed that hydropower still
has room to grow.
Though most people first think “dams”
when they hear “hydropower,” the two are
not one in the same. Only 3 percent of the
nation’s 80,000 dams currently generate
electricity. According to the U.S. Department
of Energy, the United States could increase
its generating capacity by over 12,000 MW
through the addition of power generation
to the nation’s nonpowered dams60
—
enough to power 4 million American
homes annually.61
Another U.S. Department of Energy
study released in 2014 found extensive
hydropower potential from new development
still exists at the nation’s stream reaches.
The study estimated more than 65,000 MW
of potential new hydropower development
is available across more than 3 million U.S.
rivers and streams — nearly equivalent to
current U.S. hydropower capacity.62
While not
all of these resources will be developed
for various reasons, it demonstrates
that hydropower can continue to play
an important role in the nation’s clean-
energy future.
Policies Can Enable Hydropower’s
Potential
America is entering an era where the
value of hydropower in an all-of-the-above
energy mix must be recognized in policy to
ensure that its contributions are maintained
and expanded.
Hydropower projects face a comprehensive
regulatory approval process that involves
many participants, including the Federal
Energy Regulatory Commission, federal and
state resource agencies, local governments,
tribes, NGOs and the public. The system
strives to promote development while
protecting important environmental values.
However, it can also contain redundancies
and inefficiencies that unnecessarily
slow the deployment of clean renewable
hydropower and delay much-needed
environmental enhancements and benefits.
Currently, it takes more than five years to
license even low-impact projects, such as
adding hydropower to existing nonpowered
dams. This delay adds costs and uncertainty
that can make developers discontinue
pursuing a hydropower project.
There have been some positive policy
developments. Recent legislation passed
unanimously by Congress and signed by the
president has the Federal Energy Regulatory
Commission examining how it can reduce
10
licensing for low-impact projects to just two
years.But,additional efficiencies in the regulatory
process that get projects off the drawing
board and put people to work are necessary
at a time when we need all the renewable,
affordable and reliable energy we can get.
The uncertainty and inequality in tax
incentives for hydropower development
has also created a financial barrier for
developers. Hydropower requires high capital
investment up front. Currently, the production
tax credit for hydropower is expired. Even
when it was in place, hydropower developers
received less than half the credit of other
renewable resources. Reinstating this, and
other renewable financing mechanisms,
such as the Clean Renewable Energy Bonds
for the tax-exempt sector, helps leverage
additional private dollars to meet the costs of
new development.
Finally, continued investment in research and
development of conventional and emerging
hydropower technologies is critical to the
continued growth of the industry. Gains
made over the past decade in developing
more environmentally friendly turbines and
bringing new technologies to market will be
in vain if the Water Power Program at the
U.S. Department of Energy is zeroed out again
as it was under the previous administration.
Hydropower brings tremendous electrical,
environmental and economic benefits to
the U.S. electricity grid and families and
businesses. As America’s largest renewable
electricity resource, it provides for affordable
electricity and a reliable power grid. These
benefits will grow in importance as more
and more renewable resources like wind
and solar are brought online. With plenty of
opportunity to unlock hydropower’s untapped
potential, hydropower will continue to play a
large role in our diverse energy mix. Policies
to support that growth are vital to reduce
the financial and regulatory barriers that
inhibit the development of this affordable,
sustainable resource in the future.
The hydropower industry employs approx.
300,000 workers. Here, employees at Grant
County PUD in Washington state oversee the
installation of a new advanced turbine at their
Wanapum facility. (Courtesy: Grant County PUD)
Maintaining existing hydropower and expanding
its contributions enjoys broad public support.63
U.S. Nonpowered Dams with Potential Capacity Greater than 1 Megawatt
Map Key
1 — 30
30 — 100
100 — 250
250 — 500
0 — 50
50 — 150
150 — 300
300 — 400
400 — 600
600 — 1,000
1,000 — 3,900
0 — 1,000
1,000 — 5,000
5,000 — 10,000
Major Lakes
Potential Capacity (MW) Runoff (mm/yr) Streamflow (cfs)
Note:This map has been generalized for cartographic purposes and
some streams associated with nonpowered dams are not displayed.
Author: Brenna Elrod, November 7, 2013.This map was produced by
Oak Ridge National Laboratory for the U.S. Department of Energy.
Support for Maintaining
Existing U.S. Hydropower …
… and Expanding Hydropower
in the United StatesExpand Hydropower in the U.S.
Favor Oppose No Response
75%
Maintain Existing U.S. Hydropower
81%
Favor Oppose No Response
HYDROPOWER | A WAVE OF POTENTIAL FOR A RENEWABLE ENERGY FUTURE | 1514 |
Hydropower | A Wave of Potential for a Renewable Energy Future

Few things threaten America’s future
prosperity more than climate change.
But there is growing hope. Every 2.5 minutes
of every single day, the U.S. solar industry
is helping to fight this battle by flipping the
switch on another completed solar project.
According to GTM Research and the Solar
Energy Industries Association (SEIA), the
United States installed an estimated
7.4 gigawatts (GW) of solar last year — a
42 percent increase over 2013 — making
it the best year ever for solar installations
in America. What’s more, solar accounted
for a record 53 percent of all new electric
generation capacity installed in the first
half of 2014, pushing solar to the front as
the fastest-growing source of renewable
energy in America.64
Today, the U.S. has an estimated 20.2 GW
of installed solar capacity, enough to
effectively power nearly 4 million homes in
the United States — or every single home
in a state the size of Massachusetts or New
Jersey — with another 20 GW in the pipeline
for 2015-2016.65
Additionally, innovative solar heating and
cooling systems (SHC) are offering American
consumers cost-efficient, effective options
for meeting their energy needs, while
lowering their utility bills. In fact, a report
prepared for SEIA outlines an aggressive
plan to install 100 million SHC panels in
the United States by 2050. This action
alone would create 50,250 new American
jobs and save more than $61 billion in
future energy costs.66
A Growing Source of Environmentally
Friendly Energy for Homes and Businesses
From an environmental perspective, solar
helped offset an estimated 20 million metric
tons of harmful CO2 emissions in 2014,
which is the equivalent of taking
4 million cars off U.S. highways or saving
2.1 billion gallons of gasoline.67
Simply put, when looking at America’s
energy future, solar can be a real game
changer, providing more and more homes,
businesses, schools and government entities
across the United States with clean, reliable
and affordable electricity while also helping
states to meet proposed new obligations
under Section 111(d) of the Clean Air Act.
Today, the U.S. solar market segments
include utility scale photovoltaic or PV
(48 percent); utility scale concentrating
solar power, also known as CSP (9 percent);
nonresidential PV (26 percent); and residential
PV (17 percent). All totaled, there are an
estimated 650,000 installed solar energy
systems in the United States, including
systems on more than half a million homes.68
In fact, the residential sector grew an
estimated 55 percent in 2014 — the largest
among the market segments in terms of annual
percentage growth. Last year’s rapid growth
in residential solar brings cumulative installed
residential capacity to 3.5 GW, which is more
than five times the amount of residential solar
that existed in 2010. In fact,when all of the 2014
numbers are in,five states — California,Arizona,
Hawaii, New Jersey and New York — are each
projected to have installed more residential
solar than the entire country did in 2006.69
The residential market has now grown by at
least 50 percent in each of the past three years,
largely due to continued decreases in the price
of solar installation.Through the midway point
of 2014, the price to install residential solar had
fallen to $3.92/watt — more than 41 percent
lower than 2010 and 6 percent lower than a
year ago. When combined with increased
BR
IG
HT
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E
Residential (PV) Nonresidential (PV) Utility (PV) Concentrating Solar Power (CSP)
InstalledSolarCapacity(MW)
Yearly U.S. Solar Installations and Forecast
Yearly U.S. Solar Installations and Forecast
SOLAR ENERGY IN AMERICA SHINES BRIGHT | 17
Solar Energy in America Shines Bright

market competition and new financing
options, solar has never been more cost-
effective for the residential consumer.70
U.S. businesses are also investing heavily
in solar. According to SEIA’s annual Solar
Means Business report, which identifies
major commercial solar projects and ranks
top corporate solar users, Walmart remained
America’s commercial solar leader for the
third year in a row with 105 megawatts (MW)
installed at 255 locations.71
Other blue chip companies with large solar
portfolios include Costco, Kohl’s, Apple,
IKEA, Macy’s, Johnson & Johnson, McGraw
Hill, Staples, Campbell’s Soup, U.S. Foods,
Bed Bath & Beyond, Kaiser Permanente,
Volkswagen, Walgreens, Target, Safeway,
FedEx, Intel, L’Oreal, General Motors, Toys
“R” Us, Verizon, Toyota and AT&T.72
Combined, these companies have deployed
569 MW of solar capacity — a 28 percent
increase over a year ago. Collectively, they’re
playing an increasingly important role in the
development, expansion and promotion of
solar nationwide, while also reducing their
operating expenses, benefiting customers
and shareholders alike.73
But the growth of solar in the United States
isn’t limited to commercial businesses — it’s
spread across all sectors.Today, there are nearly
15 GW of utility-scale, clean energy solar projects
under contract in the United States — utilizing
both PV and CSP technologies — which will
put thousands of electricians, steelworkers
and laborers to work, spurring the economy
while helping reduce carbon emissions.74
Additionally, more than 15 major solar power
plants (100 MW and above) have already
come online, including Ivanpah (392 MW),
Topaz (300 MW),Agua Caliente (290 MW),
Solana (280 MW) and Desert Sunlight (278
MW). Solana also features six hours of
thermal energy storage, enabling it to deliver
electricity long after the sun has gone down.75
America’s K–12 Schools Embracing Solar
Schools are investing heavily in solar, too.
According to a new, first-of-its-kind study,
America’s K-12 schools have shown
explosive growth in their use of solar
energy over the last decade, soaring from
303 kilowatts (kW) of installed capacity
to 457,000 kW, while reducing carbon
emissions by 442,799 metric tons annually.76
Brighter Future: A Study on Solar in U.S.
Schools was prepared by The Solar
Foundation (TSF) — with data and analysis
support from SEIA — and funded through
a grant provided by the U.S. Department of
Energy’s SunShot program.
The report is the first nationwide assessment
of how solar energy helps to power schools
in communities across America. Most
importantly, the report shows that thousands
of schools are already cutting their utility
bills by choosing solar, using the savings to
pay for teacher salaries and textbooks.
Here are the report’s key findings:
n There are 3,752 K-12 schools in the
United States with solar installations,
benefiting nearly 3 million students.
n Today, America’s K-12 schools have a
combined capacity of 490 MW, generating
642,000 megawatt-hours (MWh) of
electricity each year.
n Of the 125,000 schools in the country,
as many as 72,000 could “go solar”
cost-effectively.
Additionally, an analysis performed for the
report found that 450 individual school
districts could each save more than $1 million
over 30 years by installing a solar PV system.
10
New York City, alone, could save $209 million.
In a time of tight budgets and rising costs,
solar can be the difference between hiring
new teachers — or laying them off.
Effective Public Policies Paying Dividends
What’s spurring this rapid growth? For one
thing, solar energy is now more affordable
than ever. According to SEIA/GTM Research,
national blended average system prices have
dropped 53 percent since 2010.77
Today, the solar industry employs 143,000
Americans and pumps more than $15 billion a
year into the U.S. economy.78
This remarkable
growth is due, in large part, to smart and
effective public policies, such as the Solar
Investment Tax Credit (ITC), Net Energy
Metering (NEM) and Renewable Energy
Standards (RES). By any measurement, these
policies are paying huge dividends for both
the economy and environment.
The solar ITC is a 30 percent tax credit for solar
systems on residential (under Section 25D)
and commercial (under Section 48) properties.
As a stable, multiyear incentive, the ITC
encourages private-sector investment in solar
manufacturing and solar project construction.
As such, the solar ITC is the cornerstone of
continued growth of solar energy in the United
States. Under current law, the ITC will remain in
effect through December 31, 2016.
The ITC has fueled dramatic growth in
solar installations. The market certainty
provided by a multiple-year extension of the
residential and commercial solar ITC has
helped annual solar installations grow by
more than 70-fold, rocketing from 106 MW to
7,400 MW since the ITC was implemented in
2006 — a compound annual growth rate of
53 percent.79
Net metering is a billing mechanism that
credits solar energy system owners for the
electricity they add to the grid. For example,
if a residential customer has a PV system
on the home’s rooftop, it may generate
more electricity than the home uses during
daylight hours. If the home is net-metered,
the electricity meter will run backward to
provide a credit against what electricity is
consumed at night or other periods where
the home’s electricity use exceeds the
system’s output. Customers are only billed for
their “net” energy use. Exported solar electricity
serves nearby customers’ loads.
An RES requires utility companies to source
a certain amount of the energy they generate
or sell from renewable sources, such as wind
and solar, while also establishing incremental
targets that increase over time, helping reduce
pollution and fight climate change.They are
sometimes called renewable portfolio standards
(RPS).These standards have proven to be one
of the most effective policy mechanisms for
driving demand of solar and other renewables.
Currently, 29 states, plus the District of
Columbia, have effective RPS policies.
The importance of establishing and maintaining
effective public policies was highlighted in two
reports issued last year by the International
Energy Agency (IEA), which predicted solar
could be the world’s largest source of electricity
by 2050 — so long as policymakers provide
“clear, credible and consistent signals.”80
Workers installing solar panels on the roof of the
Deutsche Bank headquarters in New York City.
The Bright Source Energy solar facility at the
Ivanpah Solar Electric Generating System in
California’s Mojave Desert.
Average Solar Photovoltaic System Prices
$0.00
2005
LBNL “Tracking the Sun IV” SEIA/GTM Research
InstalledPrice($/watt)
Average Solar Photovoltaic System Prices
2006 2007 2008 2009 2010 2011 2012 2013 Q2 2014
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
(Source:SEIA)
SOLAR ENERGY IN AMERICA SHINES BRIGHT | 1918 |
Simply put, when
looking at America’s
energy future, solar
can be a real game
changer...providing
clean, reliable and
affordable electricity.
Solar Energy in America Shines Bright

10
Electricity from geothermal energy was first
generated in 1904 at Larderello geothermal
field in the Tuscany region of northwestern
Italy with a small 10-kilowatt generator.
Since then, geothermal power has grown
as a clean and reliable source of renewable
electricity.Today, there are nearly 80 countries
exploring for geothermal energy resources
to power their economies and combat
climate change.
Currently, the size of the global geothermal
market is around 12.1 gigawatts (GW)
and the U.S. market is roughly 3.6 GW of
nameplate capacity.81
Worldwide, geothermal
power capacity has grown every year since
the mid-1980s and is expected to increase
by 4 to 5 percent each year for the rest of
the decade as countries implement policies
to avoid the consequences of climate
change. The current 12.1 GW of global
capacity represents only about 6 percent
of total global potential resources, which
the International Panel on Climate Change
estimates at over 200 GW of identified
geothermal resources.82
The fastest growth areas for geothermal
power are presently East Africa, Indonesia
and Central America. Motivated by the
threat of climate change and demand for
new electrical power, these regions are
expected to bring a substantial amount of
geothermal power online in the next decade.
Around the world there is an additional 12.1
GW of geothermal power in some stage of
exploration or development and about a
tenth of that developing capacity is currently
under construction. The Geothermal Energy
0
2,000
4,000
6,000
8,000
10,000
Asia
Megawatts
Operating and Developing Geothermal Capacity by Region
SouthPacific
CentralAmerica
Caribbean
Europe
MiddleEast/Africa
NorthAmerica
SouthAmerica
Operating Capacity Developing Capacity Additions
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2004 2006 2008 2010 2012 2014 2016
Capacity Addition of Plants Under ConstructionCurrent Nameplate Capacity
Megawatts
Geothermal Nameplate and Potential Capacity
12.1 GW
13.9 GW
Operating and Developing Geothermal Capacity by Region
Geothermal Nameplate and Potential Capacity
(Source: Geothermal Energy Association)
(Source: Geothermal Energy Association)
GEOTHERMAL POWER | RENEWABLE ENERGY FROM THE EARTH’S WARMTH | 21
Geothermal Power | Renewable Energy from the Earth’s Warmth

to the grid. Many oil and natural gas fields
have transmission infrastructure already
in place, which could be inexpensively
upgraded. These co-produced geothermal
resources can deliver near-term energy
savings, diminish greenhouse gas emissions,
extend the economic life of oil and natural
gas fields, and profitably utilize abandoned
oil and natural gas field infrastructure.
In some cases, co-produced fluid (brine)
is trapped under an impermeable layer
of caprock. In many instances, various
geological processes result in compressing
these fluids to moderate pressures. These
fields are called geopressured resources
where temperatures typically range from
90°C to 200+°C. Additionally, the reservoirs
that hold this fluid often contain dissolved
natural gas that may not be economical
to produce alone, but can be developed
in combination with geothermal energy
production from the hot brine. Geopressured
brine reservoirs are located along the Pacific
coast, in Appalachia, beneath the Gulf of
Mexico and in other deep sedimentary
basins in the United States. Development
of these natural gas and geopressured
geothermal resources is proven commercial
through case studies, and used globally.
One recent example of a co-produced
fluid system is ElectraTherm’s Florida
Canyon mine project in Nevada. Heat from
geothermal fluids at the mine — once
an unused by-product of gold mining —
generates up to 70 kW of electric power
for $0.06 to $0.08/kWh ($60 to $80/MWh)
thanks to a small co-produced fluids
generator, which was manufactured and
installed for $982,000 with funds from a
U.S. Department of Energy grant.87
In general, these small co-produced fluid
units are mobile and unmanned. They can be
set up in days or weeks, and moved as new
wells are drilled. They are fully packaged,
commercial units that have varying outputs
depending on flows and temperatures
of each well, and can be a cleaner and
affordable alternative to diesel generators.
Policy Roadblocks to Geothermal
Power’s Expansion
With the right policies, geothermal energy
can continue to grow as a share of America’s
energy portfolio and be a future source of
clean energy for consumers and businesses.
One of the riskiest and most expensive steps
during any geothermal power project occurs
at the beginning when initially searching for
geothermal resources. Before a developer
can even begin construction, they will usually
spend 50 to 60 percent of the project’s total
costs on exploration and drilling activities.
An effective way to encourage geothermal
power’s growth is for government to share
this initial risk with the private sector through
some kind of cost sharing, insurance,
low-cost loan or other financial instrument.
In many countries around the world,
governments often share the risk of initial
exploration because few private investors
will assume it alone. Even the United States
had policies supporting this assistance in
the 1970s and 1980s. These mechanisms
encourage the private sector to search for
resources in new areas.
Legislation to address this obstacle has
previously been introduced in Congress. It
directed the creation of a loan program for
high-risk geothermal exploration wells in the
United States by establishing a Geothermal
Investment Fund, which would help explore
and confirm new geothermal resources as
well as invest in new geothermal research
projects. Further, the bill authorized a
geothermal heat-pump research program at
the U.S. Department of Energy, and federal
oil and natural gas leases to co-produce
geothermal energy, which is currently
prohibited by the Mineral Leasing Act and
Geothermal Steam Act of 1970.
Another barrier that raises costs for
geothermal projects is long lead times
for permit approvals. Bureaucracy can be
particularly troublesome while geothermal
developers wait for permits to explore
resources they have recently found. In
general, a current geothermal project takes
5-7 years to work its way through the
federal government’s approval process.
This long delay raises costs for developers
and projects that already require significant
upfront capital.
Association estimates conservatively the
industry will reach at least 13.9 GW by
2017, just looking at projects in the pipeline
already under construction.
Geothermal power offers both firm and
flexible solutions to the changing U.S. power
system by providing a range of services,
including, but not limited to baseload,
regulation, load following or energy
imbalance, spinning reserve, nonspinning
reserve, and replacement or supplemental
reserve power. It is well known that
geothermal plants can operate 24 hours
a day with steady output, regardless of
environmental conditions, and represent
one of the only options for a renewable,
baseload power source.
Additionally, geothermal power is
environmentally friendly, producing very few
emissions. Binary plants produce near-zero
GHG emissions, while flash and dry steam
plants represent a significant reduction
compared to other technologies.83
It also has
a positive impact on local economies: For
every 100 megawatts (MW) of geothermal
built, an accompanying 170 operation
and maintenance jobs and 640 temporary
construction jobs are created.84
Finally, geothermal power is economical
to produce. The U.S. Energy Information
Administration (EIA) formulated the Levelized
Cost (LCOE) and Levelized Avoided Cost per
kilowatt-hour for various energy sources
to be commissioned in 2019. In their latest
forecast for geothermal power, EIA found
the average LCOE to be 46.2 to 50.3 (2012
$/MWh) and Levelized Avoided Cost to
be around 58.3 to 62.4 (2012 $/MWh),
proving to be one of the most economical
technologies EIA analyzed. According to
EIA, “Geothermal cost data is site-specific,
and the relatively large positive value for
that technology results because there
may be individual sites that are very cost
competitive.”85
Geothermal Power’s Opportunities with
the Oil and Natural Gas Industry
Tremendous opportunities exist for
geothermal energy to capitalize on the
staggering growth in oil and natural gas
production and meet the economy’s growing
demand for power.
Beyond traditional hydrothermal resources
that generate power today, there is a
substantial amount of geothermal power
potential in old oil fields across the western
states and throughout the world. Oil and
natural gas fields produce an average of
25 billion barrels of hot water annually, which
could translate into over 3 GW of electricity.86
The number of old oil and natural gas wells
identified to have geothermal potential
amounted to over 80,000 in 2012.
Historically, this hot water has required costly
disposal; however, it is now being considered
as a potential resource that can be used to
produce electricity for field operations or sold
Photo courtesy of Samuel Abraham,
Baker Hughes of Puna Geothermal, Hawaii.
Photo courtesy of Samuel Abraham, Baker Hughes
of Menengai Geothermal Resource Area, Kenya.
GEOTHERMAL POWER | RENEWABLE ENERGY FROM THE EARTH’S WARMTH | 2322 |
Geothermal
power offers both
firm and flexible
solutions to the
changing U.S.
power system.
Geothermal Power | Renewable Energy from the Earth’s Warmth

Equally important to promoting development
of all of America’s diverse energy sources
is ensuring a robust national energy
infrastructure that can reliably deliver it to
consumers and businesses.Whether over
land, underground or via waterways, the
many modes responsible for moving energy
from coast to coast work in concert with each
other to make energy available when and
where it is needed. Sustaining and expanding
America’s energy infrastructure is vital to
a dependable supply chain that provides
uninterrupted energy, which is central to our
economic growth and national security.
Redundancy in the energy infrastructure is
critical to its resilience and helps minimize
any disruptions that occur. On the instance
when there is an interruption of service, this
same redundancy enables the system to
recover as quickly as possible.
Often, the most significant barrier to
maintaining existing and constructing new
infrastructure is local opposition. Siting and
permitting of projects often face delays that
not only deny benefits in the local community,
but also in towns far away that could see
economic gains by virtue of the energy
that is transported. In the oil and natural
gas industry alone, investments in building,
maintaining and updating transportation and
storage infrastructure could contribute up
to $120 billion to the economy each year
and support as many as 1.15 million jobs
annually over the next 12 years.88
Supporting those efforts that keep America’s
energy infrastructure — pipelines, surface
transportation, ports and inland waterways,
and the electricity grid — working
effectively to meet current and future energy
requirements will be the responsibility of
elected leaders and citizens alike.
Pipelines
America’s pipeline system — the most
extensive in the world89
— covers roughly
2.6 million miles90
transporting oil and
natural gas to refining and processing
facilities and then to markets in the United
States and around the world.The U.S. natural gas
pipeline system consists of 305,000 miles of
interstate and intrastate pipelines,91
moving
natural gas to processing facilities and
then to homes and factories throughout the
country. Keeping pace with rising production
occurring throughout North America requires
not only increasing capacity, but completely
restructuring the system, which was
designed to carry imported oil from coastal
refineries to customers inland, but now must
move significant quantities of oil and natural
gas from often remote production areas to
facilities for processing. In fact, movements
of crude oil by pipeline from the Midwest to
the Gulf region grew from 50,000 barrels
per day in 2008 to more than 380,000
barrels per day in 2013.92
Pipelines remain the principal mode for
transporting crude oil, refined products and
natural gas. In 2013, pipelines carried nearly
15 billion barrels of crude oil, petroleum
products and natural gas liquids to their
destinations reliably and safely more than
99.999 percent of the time.93
Though nearly
12,000 miles of new crude oil and 11,000 miles
of new natural gas liquids pipelines have
Sustaining and
expanding America’s
energy infrastructure
is vital to a
dependable supply
chain that provides
uninterrupted
energy, which
is central to our
economic growth
and national security.
been constructed during the last 10 years,94
much more is needed to transport the high
volumes of crude oil, natural gas and natural
gas liquids being produced to refineries and
chemicals plants where they can be made
into the fuels and raw materials consumers
rely on each day.
Surface Transportation
Various modes of surface shipment also play
an indispensable role in America’s energy
transportation network.Whether truck or train,
surface transportation moves energy resources
from locations where they are produced to
facilities where energy is refined or generated,
and then on to consumers and businesses.
SPECIAL SECTION | INFRASTRUCTURE — THE ESSENTIAL LINK TO A SECURE ENERGY FUTURE | 25
Special Section | Infrastructure —
The Essential Link to a Secure Energy Future

In the petroleum industry, rail has played
an increasingly important role in the
transportation of crude oil, serving as a
flexible and readily available mode for
moving oil from new fields that have led
to the surge in domestic production. There
are approximately 49,000 rail tank cars in
service for the safe transport of crude oil,95
with another 30,000 expected by the end
of 2015.96
The volume of crude oil shipped
by rail tank cars increased from nearly
66,000 carloads in 2011 to over 407,000
carloads in 2013.97
Surface transportation also plays an
important role in the movement of other
energy sources, including coal and biomass
used for electricity generation. Rail is a
primary method for transporting coal used
by power generation facilities,98
particularly
coal that is produced in Appalachia and other
inland regions of the U.S. Woody biomass
feedstock used for energy generation is
transported to forest products manufacturing
facilities by either truck or rail, but truck
provides the most flexibility for transporting
this material from remote areas, accounting
for roughly 90 percent of all pulpwood
delivered to U.S. mills in 2005.99
Ports and Waterways
Often, maritime methods are the most ideal for
transporting large volumes of energy resources
within the U.S. and they are the only means to
export crude, natural gas and their products
overseas.America’s system of more than
25,000 miles of inland waterways provides
important arteries for efficiently moving
various resources to domestic processing and
distribution areas, and ports serve as critical
hubs for energy coming into and leaving
the U.S. By effectively maintaining both, and
expanding port facilities where needed, they
can continue to anchor America’s economic
growth and energy security.
Maritime transportation is a method for
moving large quantities of oil and natural gas
from areas where it is produced, refined or
processed to market. In the U.S., 42 percent
of all waterborne trade comprises crude oil
or petroleum products.100
Globally, more than
46 trillion barrels of oil are carried worldwide
via waterway101
and safely delivered to port.
Over the last decade, 99.99954 percent of
oil shipped to the U.S. reached its destination
without incident.102
Today, demand for natural gas in Asian
countries has skyrocketed and, as the
leading producer of natural gas in the world,
the U.S. stands on the edge of becoming
one of the world’s largest exporters of the
product. LNG ships are the only mechanism
to move natural gas to markets overseas.
It is imperative that export terminals be
approved and the maritime infrastructure is
sound to support this opportunity.
Maritime is also emerging as an option
for reliably transporting coal for electricity
generation. Power generation facilities
located along coastal areas of the U.S. are
increasingly using imported coal transported
via ships, some of which can carry more
than 50,000 tons of coal at a time,103
to meet electricity demand. While such coal
imports only account for roughly 1 percent
of total U.S. coal consumption,104
maritime
transportation of coal shows how a diverse
energy infrastructure is important to meet
America’s energy needs.
As public infrastructure, the responsibility
for maintaining inland waterways, as well
as ports and harbors, falls to the federal
government. Absent proper resourcing, locks
and dams that manage the movement of
ships on the inland waterway system suffer
from age and disrepair. Additionally, many of
the inland waterways themselves, as well as
harbors, get shallower and narrower as they
fill with silt over time. Proper maintenance
maximizes the efficiency of waterways for
the movement of energy while minimizing
the chance of an incident.
The Electricity Grid
While the U.S. will continue to rely upon
many diverse methods of electricity
generation to meet energy demand, including
coal, solar, biomass, geothermal, nuclear,
wind, hydropower and natural gas, it is
the electricity grid that connects all
these energy sources to consumers and
businesses. The grid’s interconnected
system of power generation facilities,
transmission lines and distribution facilities
provide electricity to more than 145 million
customers.105
As new natural gas and
renewable electricity generation plants join
traditional coal-fired facilities, more up-
to-date capacity must be added to today’s
roughly 450,000 miles of high-voltage
transmission lines106
to adequately carry
electricity to consumers.
Today’s aging electricity grid is especially
vulnerable to severe weather. About
70 percent of the U.S. electricity grid’s
transmission lines and power transformers
are more than 25 years old.107
Improving
the electricity grid with newer transmission
lines is as essential as adding new capacity
to provide more resiliency and redundancy
across the grid that can prevent power
outages during severe weather, which,
according to a 2013 report from the
Executive Office of the President, were
estimated to have cost the economy an
inflation-adjusted annual average of
$18 billion to $33 billion between 2003-2012.108
Additionally, cyberattacks are a growing
threat to the electricity grid. Such attacks
are increasing in both frequency and
sophistication109
and, unlike severe weather,
are more difficult to predict. A successful
large-scale cyberattack could lead to
extended power outages over large portions
of the electricity grid and have a cascading
effect that impacts many other services,
from communications to food and water
supply.110
The U.S. Department of Homeland
Security reported responding to 198 cyber
incidents in fiscal year 2012, and 41 percent
of them involved the energy sector.111
Adequately protecting the electricity grid
from cyber threats must be a joint effort by
federal, state and local governments as well
as relevant energy sectors.
SPECIAL SECTION | INFRASTRUCTURE — THE ESSENTIAL LINK TO A SECURE ENERGY FUTURE | 27
Special Section | Infrastructure —
The Essential Link to a Secure Energy Future
26 |

Today, America has an opportunity to
embrace natural gas as a fuel of our future.
The United States has vaulted past Russia
to become the world’s largest natural gas
producer and is projected to become a net
exporter within the next decade.112
This development is attributable to
technological innovation in the areas of
horizontal drilling and hydraulic fracturing
that turned previously inaccessible natural
gas resources into producing wells — a
100-year, secure and safe supply of clean-
burning natural gas. It has also paved the
way for significant economic growth and
opportunity. Today, the natural gas industry
supports nearly 3 million jobs and adds
about $385 billion to the national economy
each year.113
Natural gas is projected to be an even more
significant part of the country’s energy mix
in years to come. According to the Energy
Information Administration (EIA), natural
gas represented 28 percent of U.S. energy
consumption in 2012 and is expected to
grow to 30 percent by 2040.114
However, as
important as natural gas is to today’s economy
and our future energy needs, more must
be done to capitalize on this resource and
drive greater economic prosperity, including
expediting the approval of U.S. liquefied
natural gas (LNG) facilities and exports.
Creating New Jobs and
Strengthening the Economy
Development of unconventional energy
resources is a substantial driver of job
growth and a more prosperous economic
environment. A report by IHS Global Insight
showed that the development of shale
resources through hydraulic fracturing
supported 2.1 million jobs in 2012.115
This
helped drive a 40 percent increase in job
growth in the industry between 2007 and
2012, well outpacing overall private-sector
job growth of only 1 percent.116
Continued
development is expected to boost that
number to 3.9 million jobs by 2025, including
more than 500,000 manufacturing jobs and
319,000 chemicals sector jobs.117
Hydraulic fracturing is also driving greater
personal income, government revenue and
domestic economic growth.The average
U.S. household enjoyed an additional $1,200
in disposable income in 2012 from lower
energy costs thanks to hydraulic fracturing —
a total expected to grow to $3,500 in 2025.118
And development of shale resources added
$284 billion to U.S. GDP in 2012, a figure
expected to grow to $533 billion by 2025.119
Furthermore, the incredible success of
shale gas development has sharply reduced
electricity and natural gas costs for local
communities across the country.
Today’s natural
gas industry is
already a significant
contributor to job
and economic
growth, and these
benefits are only
expected to
increase in the
decades ahead.
The critical question
is whether or not
the United States
will take the
necessary steps
to maximize
the opportunities.
NATURAL GAS | AMERICA’S ABUNDANT, CLEAN ENERGY | 29
Natural Gas | America’s Abundant, Clean Energy

U.S. public school districts saved $1.2 billion
on electricity and natural gas in the 2012/2013
fiscal year, enough money to employ an
additional 14,200 teachers, according to
IHS.120
State and local taxpayers saved
$720 million on public electricity and natural
gas expenditures, the approximate cost of an
additional 11,000 public-service employees.121
The rapid development of America’s
natural gas resources delivers benefits
that go well beyond economic growth. As a
clean-burning energy source, natural gas is
making a positive contribution to the nation’s
environmental and energy sustainability
goals. U.S. carbon dioxide (CO2) emissions
are near 20-year lows, and a major reason
for that progress is the development and
use of America’s abundant natural gas
resources.122
EIA projects energy-related CO2
emissions to be substantially below 2005
levels by 2040123
thanks, in large measure,
to a continued shift to less carbon-intensive
fuels, such as natural gas. Between 2006 and
2012, EPA data show methane emissions fell
40 percent while production of natural gas
surged 37 percent. Finally, EPA estimates
that technology and improvements led to a
73 percent decrease in methane released by
natural gas development since 2011.124
These benefits — economic and
environmental — are made possible by
extraction methods that are safe and proven.
Hydraulic fracturing has been in practice
for more than 65 years and has been used
in more than 1 million wells in the United
States alone.125
State regulation of hydraulic
fracturing has been in place since its inception
and, together with federal oversight and well-
established industry standards, effectively
protects the environment and workers.
Vital to our Economic Future
Today’s energy debates are often dominated by
the need for enhanced energy efficiency and the
promise of nonfossil fuel sources.While it is true
that renewable sources of energy are growing
rapidly and other technology improvements
will deliver greater energy efficiency, expected
global population and economic growth mean
demand is growing even faster.
In fact, EIA’s most recent projections show
U.S. energy demand increasing by 12 percent
between 2012 and 2040, and that oil and
natural gas, which together supplied 65
percent of the energy we used in 2012,
will still provide 64 percent by 2040.126
EIA
goes on to project that natural gas will meet
roughly the same share of industrial and
electric power demand and an increasing
share of the demand in the transportation
and commercial sectors.127
Furthermore,America’s abundant domestic
supply has enabled energy-intensive
manufacturing companies that had been
moving overseas to stay and, in some cases,
return to the United States to take advantage
of our domestic energy renaissance.
Today’s natural gas industry is already a
significant contributor to job and economic
growth, and these benefits are only expected
to increase in the decades ahead. The critical
question is whether or not the United States
will take the necessary steps to maximize
the opportunities.
Capitalizing on America’s Abundant
Natural Gas
Natural gas is recognized as being critical
to meeting America’s surging energy
needs now and for the foreseeable future.
However, in order for the United States to
make the most of the opportunities that its
abundant natural gas resources represent,
we must develop appropriate policies that
encourage continued use of safe, effective
and environmentally responsible techniques,
including hydraulic fracturing, horizontal
drilling and offshore operations.
Freeing America’s energy resources for
development is essential to growing the
economy, enhancing security, spurring job
creation, increasing federal, state and local
revenue, and improving the U.S. balance
of trade. Sixty-six percent of voters say they
are more likely to support a candidate in
2016 who supports producing more oil
and natural gas, according to a survey by
Harris Poll.128
Once produced, we need to enable the
necessary expansion and extension of the
pipeline infrastructure in the United States
to get natural gas to customers. Much of the
nation’s electric generation and heating is
becoming more dependent on natural gas, and
the United States must have forward-thinking
policies in place that ensure the successful
build-out of natural gas infrastructure.
The United States also needs to seize the
opportunity to become an exporter of
LNG, which would reduce the nation’s
trade deficit, increase government revenue,
grow the economy and support millions of
U.S. jobs in engineering, manufacturing,
construction and facility operations — with
no significant price impact projected for
domestic consumers.129
LNG exports could contribute up to
$31 billion to the economy of Texas alone,130
and other states will experience ripple
effects due to the demands for steel,
cement, equipment and other goods. Job
gains as high as 155,000 are expected in
gas-producing states with additional, indirect
gains elsewhere.131
The opportunity that LNG exporting poses
will not materialize on its own. There is
a global race to build the infrastructure
necessary to secure a sustainable leadership
position. Today, there are more than 60
LNG export projects planned or under
construction around the world.132
The United
States must act quickly to cement its place
in this emerging market and secure the
economic benefits — otherwise, we will
cede the opportunity to other regions and
lose a valuable tool for gas and petroleum
production as well as global diplomacy.
The United States is blessed with a bountiful
supply of clean-burning natural gas.This
resource is helping cement the country’s
position as an energy superpower — bringing
more and better jobs, supporting a cleaner
environment and driving greater levels of
economic prosperity. Now is the time for
policymakers to continue to embrace natural
gas and the opportunities it provides.
NATURAL GAS | AMERICA’S ABUNDANT, CLEAN ENERGY | 3130 |
Natural Gas | America’s Abundant, Clean Energy

Wind energy has emerged as an attractive
source of clean power that is delivering
numerous economic benefits today and
is poised to play a key role in meeting
America’s future needs for clean, affordable
energy. Mainstream in the United States
for many years and still on a steep growth
curve, wind energy has a new source of
appeal: Over the past five years, its cost has
dropped an impressive 58 percent.133
As a result of continued technological
improvement and domestic manufacturing,
wind energy has become one of the most
affordable sources of electricity today and one
of utilities’ leading choices for new generation.
It has also become a major economic
contributor. The U.S. wind industry has
attracted up to $25 billion a year in private
investment and generated up to 85,000
jobs, roughly one-third of them in a rapidly
growing new U.S. manufacturing sector.
Wind turbines offer zero emissions and
use no water in operation, which offers an
appealing energy option to policymakers
seeking affordable pollution solutions
that can be rapidly scaled up, including to
meet pending EPA regulations on carbon
emissions from power plants.
Affordably Positioned for Growth
Technological improvements leading to
capacity gains are responsible for much
of wind energy’s impressive cost decline.
Bolstering America’s domestic wind
manufacturing supply chain has helped,
too, as it avoids the transportation costs
involved with importing such large
components from overseas.
Utilities are signing power purchase
agreements (PPAs) for wind energy at
a record pace, entering into 60 such
contracts totaling over 8,000 megawatts
(MW) in 2013.134
When announcing these
agreements, utilities typically highlight the
cost savings for their customers.
“Wind prices are extremely competitive
right now, offering lower costs than other
possible resources,” said David Sparby,
president and CEO of Xcel Energy’s Northern
States Power, announcing 600 MW of new
wind power contracts. “These projects
offer a great hedge against rising and often
volatile fuel prices.”135
When MidAmerican Energy, the investor-
owned utility controlled by investment icon
Warren Buffett, received state approval for
a major 1,050 MW wind farm in Iowa, the
utility stated: “The expansion is planned
to be built at no net cost to the company’s
customers and will help stabilize electric
rates over the long term by providing a
rate reduction totaling $10 million per year
by 2017, commencing with a $3.3 million
reduction in 2015.”136
Industrywide numbers bear out such
statements. The U.S. Department of Energy’s
annual Wind Technologies Market Report
of August 2014 confirmed that wind power
prices have reached historically low levels.137
As a result
of continued
technological
improvement
and domestic
manufacturing, wind
energy has become
one of the most
affordable sources
of electricity today
and one of utilities’
leading choices for
new generation.
THE ATTRIBUTES OF WIND ENERGY ARE ADDING UP | 33
The Attributes of Wind Energy are Adding Up

It has been allowed to expire several times
before being renewed. This has created a
boom-bust cycle for the industry.
Perhaps the best indication of what the
industry is capable of doing in a stable policy
environment was witnessed in the dramatic
growth seen between 2005 and 2012, the
longest stretch to date during which Congress
did not allow the PTC to expire.American wind
power saw 800 percent growth over the period,
and average annual growth of 31 percent.
Total investment in new wind farms reached
$105 billion and, during this time, a vast
majority of all wind power capacity in the U.S.
today was installed. In the record year of 2012
alone, the industry installed over 13,000 MW
of capacity.147
In today’s rapidly shifting environmental and
energy policy landscape, an important goal of
the wind industry is a policy framework that
appropriately values its attributes, including
zero-emissions power with no water use.
Failing to properly value a product’s public
benefits can be deemed a market failure.
An appropriate policy environment will
correct that failure, freeing the industry
to realize the Wind Vision outlined by the
U.S. Department of Energy — doubling its
contribution by 2020, reaching 20 percent
by 2030, and providing over one-third of
the nation’s electricity by 2050 while saving
consumers money.
In addition to cost-competitiveness today,
wind energy has another quality that utilities
value: price stability. Comments from
electricity generators praising wind energy’s
ability to stabilize rates have become almost
commonplace in utility news releases
announcing wind energy agreements. Since
a wind farm uses no fuel, PPAs can lock
in prices for the long term, with contracts
typically lasting 20 to 25 years.
As a result, wind energy has increasingly
become the primary choice for new power in
such regions as the Pacific Northwest, Plains
states, and Midwest, providing 60 percent or
more of all new electric generating capacity
between 2011 and 2013, and delivering over
80 percent in the upper Midwest.138
Looking to the future, the U.S. Department of
Energy’s Wind Vision report, in peer review
since it was previewed at the American
Wind Energy Association’s annual conference
in 2014, states that wind energy capacity
could double by 2020 and provide 10 percent
of America’s electricity, and then double again
by 2030 to 20 percent of the grid. It projects
that by 2050, wind can provide as much as
35 percent of the nation’s electricity.139
At
that point, wind would be one of the leading
sources of electric generation in the U.S.
The Wind Vision report becomes all the more
compelling when considering that the U.S.
industry is on pace to meet the 2030 goal, as
outlined in an initial report produced by the
George W. Bush administration in 2008.140
The vision is already becoming reality.
Poised to Meet America’s Future
Clean Energy Challenges
While its price may make wind power
irresistible to cost-conscious utilities, its
other benefits are also important to America
today, and will only become more so.
In June 2014, the U.S. Environmental
Protection Agency proposed the first
rule to limit CO2
emissions from existing
power plants under Section 111(d) of the
Clean Air Act. States are expected to have
substantial flexibility to meet the rule with
low-carbon options “outside-the-fence.”
Wind energy can be a particularly attractive
option to quickly and affordably comply with
the rule, as state implementation plans are
prepared in the coming years.
As shown by the 2014 Lazard report on the
levelized cost of energy, wind is the most
cost-effective generation option for reducing
emissions.141
With more than 62,000 MW now
producing zero-emission electricity, today’s
installed wind fleet is already making a
difference.The 167.7 million megawatt-hours
generated by wind energy in 2013 avoided an
estimated 127 million short tons of CO2
, equal
to reducing power-sector carbon emissions by
4.4 percent, or taking 16.9 million cars off the
road.142
Moreover, a recent study found that a
wind turbine designed to produce electricity
for at least 20 years will pay back the energy
cost of its production and installation in just
five to eight months.143
One benefit that often goes unnoticed is the
water that is saved by using wind energy,
and the associated enhancement to
reliability during heat waves. The 2008 U.S.
Department of Energy Wind Vision report
found reaching 20 percent of U.S. electricity
generation by 2030 would save 4 trillion
gallons of water, more than the annual
consumption of 9 million Americans.144
Wind
energy generation led to water consumption
savings of 36.5 billion gallons of water in
2013 — roughly 116 gallons per person in
the U.S.145
When heat waves threaten, wind
energy can help keep the lights on.146
Offshore wind energy is an exciting
segment of the industry that is anticipated
to begin construction in 2015, bringing an
energy source familiar in Europe to the
U.S. for the first time. Such projects have
been proposed in both state and federal
waters off the Atlantic and Pacific Coasts,
as well as in the Great Lakes and the Gulf
of Mexico. Developers of two projects
off Massachusetts and Rhode Island are
expected to put steel in the water by the
end of 2015.
Stable Policies Enable Wind to Thrive
Wind energy’s rapid advance is remarkable
when considering the unstable policy
environment in which it has been forced to
operate. The federal Production Tax Credit
(PTC), wind energy’s primary policy driver (as
well as the alternative Investment Tax Credit
relied on by offshore and community wind
developers), has operated under short-term
extensions of usually one and two years.
THE ATTRIBUTES OF WIND ENERGY ARE ADDING UP | 3534 |
The Attributes of Wind Energy are Adding Up

Coal-fueled electricity generation has
powered the American way of life for
decades and remains the backbone of the
U.S. electrical grid. In 2013, coal-fueled
generation accounted for nearly 40 percent
of all electricity produced in the United
States. This affordable and reliable energy
source is critically important to America’s
economic present and future. Today,
electricity from coal supports more than
880,000 U.S. jobs and contributes more than
$106 billion to the national economy.148
Ninety-three percent of the coal consumed
in the United States is used to generate
electricity in 48 states, providing at least half
of the electricity in 17 states and at least
one-quarter of the electricity in 31 states.
Coal is also used in the steel, paper, cement
and plastics industries. It is used to produce
activated carbon for water purification and
carbon fibers for fuel cells and electronics.
Coal is critical to keeping electricity costs
low. Thirty-one states that, on average,
generate more than 55 percent of their
electricity from coal pay 11 percent less than
the national average for electricity.149
America’s future economic growth and
energy security will require the continued
and increasing use of fossil fuels, like
coal, as part of a sensible, diverse energy
portfolio. According to the Energy Information
Administration, the United States has the
largest recoverable coal reserves in the
world, and is capable of meeting domestic
demand for coal for roughly 290 years.150
Regrettably, the cumulative actions of the
U.S. Environmental Protection Agency (EPA)
since 2008 put in jeopardy the continued
availability of affordable and reliable
electricity from coal.
Numerous Policies Threaten
Coal-Based Electricity
As of July 2014, EPA policies — primarily
the Mercury Air Toxic Standards (MATS)
rule finalized in 2013 — have led to the
announced retirement or conversion of
more than 350 coal-fueled generating units
throughout the country.151
In August 2014,
the Government Accountability Office (GAO)
released a report estimating 13 percent
(roughly 238 units and 42,192 megawatts)
of the nation’s 2012 coal capacity will be
retired by 2025, which is considerably higher
than estimates made by GAO just two years
earlier. GAO reported that three-quarters of
these retirements will occur before the end
of 2015 because of MATS and that “this
level of retirements is significantly more
retirements than have occurred in the past.”
GAO also warned that “some regions may
face reliability challenges.” EPA projected
only 4,700 megawatts of coal-fueled
generation would retire because of the
MATS, a gross underestimation.152
EPA’s proposed carbon emission standards
will only exacerbate an already tenuous
energy situation. EPA’s proposed standard for
new generating units under section 111(b)
of the Clean Air Act effectively bans the
construction of new, highly efficient clean
coal plants. In order to meet the proposed
standard, new coal plants would require
Carbon Capture and Storage technology,
which is not yet commercially viable. This
proposal essentially ignores the technological
advancements made as utilities and
ratepayers have invested approximately
$118 billion153
to achieve a nearly 90 percent
reduction per kilowatt-hour of sulfur dioxide
(SO2), nitrogen oxides (NOX) and particulate
matter (PM) from coal-fueled power plants.154
Regulations Would Result in Higher
Electricity Prices
In June 2014, EPA proposed regulations
to reduce carbon emissions from existing
generating units under section 111(d)
of the Clean Air Act. While there are
serious technical and legal flaws associated
with EPA’s Clean Power Plan (CPP),
which will continue to be challenged by
a number of states in the court of law, it
is clear the agency’s proposal will inflict
significant harm on the U.S. economy if
finalized. By EPA’s own estimates, the
CPP will increase nationwide electricity
PR
OV
EN
ELECTRICITY FROM COAL IS A VITAL, BUT THREATENED, ENERGY SOURCE | 37
Electricity from Coal is a Vital, but Threatened, Energy Source

America’s future
economic growth
and energy security
will require the
continued and
increasing use of
fossil fuels, like
coal, as part of a
sensible, diverse
energy portfolio.
claims that the CPP demonstrates global
leadership on tackling climate change, no
other nations are following. Countries like
China, Japan, Germany and India continue to
use low-cost, reliable coal-fueled generation
to power their respective economies.157
Further, EPA’s carbon proposal for existing
units will have no meaningful effect on the
global climate, reaffirming that the agency’s
CPP is indeed an all-pain, no-gain proposition.
The proposal will reduce atmospheric
CO2 concentrations by less than one-half
of 1 percent and sea level rise by 1/100th
of an inch — equal to the thickness of
three sheets of paper. The entire U.S. coal
fleet represents a mere 3 percent of global
anthropogenic greenhouse gas emissions.158
Policies Put Reliable Electricity at Risk
The “polar vortex” of 2014 offered Americans
a glimpse into the new reality that EPA’s
regulatory policies will yield for decades
to come: a strained energy infrastructure
and significantly higher energy prices. As
extreme cold gripped much of the nation,
utilities struggled to meet increasingly high
energy demand at a reasonable cost. In
some circumstances, power generators were
forced to turn to nontraditional sources like
jet fuel just to keep the lights on.
Meanwhile, coal plants slated for retirement
in 2015 because of EPA regulations were
relied upon to avoid cascading power
outages. American Electric Power (AEP), a
major investor-owned utility with more than
5 million customers in 11 states, was
forced to run 89 percent of its soon-to-be-
retired capacity just to meet demand. AEP’s
chief executive officer, Nicholas Akins, aptly told
Congress in April 2014,“This country did not
just dodge a bullet [last winter] — we dodged
a cannonball.”159
Beyond 2015, many of those
units will not be available as a failsafe.
Understandably, other federal and state
regulators remain very concerned about
grid reliability in the face of EPA’s regulations
and proposals. Delivering testimony before
the Senate Committee on Energy and Natural
Resources in April 2014, Commissioner of the
Federal Energy Regulatory Commission Phillip
Moeller stated,“I was, and remain concerned
that EPA’s analysis greatly underestimated
the amount of power production that would
be retired due to these rules.” Moeller
continued, “The experience of this winter
strongly suggests that parts of the nation’s
bulk power system are in a more precarious
situation than I had feared in the past.”160
Federal and state elected officials and
regulators agree that EPA’s regulatory
actions toward coal-fueled electricity
generation show little regard for future
or even near-term energy and economic
needs, as many states might have to choose
between compliance with EPA regulations
and grid reliability. Such policies put in
jeopardy a domestically abundant resource
that has been the foundation of economic
progress in the United States — a resource
that must continue to reliably power our
nation for years to come as part of a
sensible, diverse energy portfolio.
prices by 6 to 7 percent and up to 12 percent
in many regions.155
An independent analysis using EPA’s own
data, however, found the cost consequences
for consumers and businesses to be much
worse. Forty-three states will experience
double-digit electricity price increases, even
when states choose the least expensive
ways to comply, and 14 states could
have peak-year electricity price increases
exceeding 20 percent. Compliance costs will
total $366 billion or more in today’s dollars
over 2017 to 2031, and consumers will
spend more than $500 billion out of their
pockets on ways to reduce electricity use.
According to the analysis,156
annual
compliance costs would average
$41 billion to $73 billion, which is almost
10 times EPA’s estimated cost. The CPP
also far exceeds the cost of the previously
most expensive rule for the power sector,
MATS, which cost $10 billion per year and
caused a large fraction of the coal fleet to
retire. In addition to the 51,000 megawatts
already retiring, mostly due to current
EPA policies, the CPP would force another
45,000 to 168,000 megawatts to shut down.
In total, EPA regulations could result in
the loss of as much as 70 percent of the
U.S. coal-fueled electric generating fleet.
EPA’s carbon proposals will increase
electricity costs for residential and industrial
consumers alike, impacting most severely
those families that can least afford it and
rendering domestic manufacturers less
competitive in a global market. Despite
$0
$10
$20
$30
$40
$50
$60
All Clean Air Act Rules
by 2010
Cost(inbillions)
Annual Cost of Clean Air Act Rules for the Power Sector
Clean Power PlanMATS
$70
$80
$7 billion $10 billion
$41–$73
billion
20,000
25,000
30,000
35,000
40,000
45,000
1990 2010 2020 2030
Total Global CO2 Emissions Without EPA Rule Total Global CO2 Emissions With EPA Rule
Emissions(millionsofmetrictons)
EPA’s Proposal Achieves Meaningless Emissions Reductions
20,000
25,000
30,000
35,000
40,000
45,000
1990 2010 2020 2030
Total Global CO2 Emissions Without EPA Rule Total Global CO2 Emissions With EPA Rule
Emissions(millionsofmetrictons)
EPA’s Proposal Achieves Meaningless Emissions Reductions
Annual Cost of Clean Air Act Rules for the Power Sector
EPA’s Proposal Achieves Meaningless Emission Reductions
Annual cost of all Clean Air Act rules for the electric power sector promulgated by 2010 from U.S. EPA, The Benefits
and Costs of the Clean Air Act from 1990 to 2020 (2011) at Table 3-2 (electric utility direct annual compliance
costs were $6.6 billion (2006$) in 2010; this converts to $7.1 billion in 2010$). MATS annual cost from U.S. EPA,
Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards, December 2011 ($9.6 billion compliance
cost in 2006$ converted to 2010$.) Cost of proposed Clean Power Plan from NERA analysis (2013$).
Source: EPA Carbon Regulation Proposal, p. 547-548 and www.eia.gov/forecasts/ieo/table2.1.cfm.
ELECTRICITY FROM COAL IS A VITAL, BUT THREATENED, ENERGY SOURCE | 3938 |
Electricity from Coal is a Vital, but Threatened, Energy Source

For decades, biomass power has served
as an important energy resource in the
generation of electricity and heat for
industrial, commercial and residential
purposes. In addition to contributing to an
“all of the above” energy policy, biomass
provides significant environmental and
economic benefits to rural America.
Biomass power is generated from the
combustion of organic materials — principally
forestry debris and agricultural materials.
There are more than 100 biomass facilities
across America located in more than 20 states.
These facilities range in size from small-scale
combined heat and power systems to large,
grid-connected facilities, averaging in capacity
from 20 to 100 megawatts (MW).
Bioenergy produces about 2.5 percent of the
nation’s total energy, and for every one MW
of capacity, the industry generates four jobs.
Today, the sector employs approximately
18,000 workers across 20 states.161
Biomass
is clean, renewable energy made from
materials that would often otherwise be
discarded. Bioenergy creates new markets
for low-value wood fiber, which incents
sustainable forest management, while
supporting vibrant rural economies.
History of Biomass
The history of the biomass power sector is
based largely on federal and state policies
designed to encourage the use of alternative
fuels. Most biomass facilities were developed
immediately following enactment of the
federal Public Utility Regulatory Policy Act
of 1978 (PURPA). PURPA encouraged state
utility commissions to approve long-term
power purchase agreements between
independent power producers and regulated
utilities. For states and regions that
aggressively implemented PURPA — New
England, New York, the Midwest, California
and the Pacific Northwest — biomass plants
were financed and ultimately constructed.
Beginning in the 1990s, many of these
contracts expired or were renegotiated
as part of utility deregulation. While some
biomass plants were shut down, most
flourished as a result of so-called state
renewable portfolios (RPS) programs.
The industry has experienced a significant
increase in investment since 2008 as a
result of various federal incentives, including
a refundable investment tax credit made
available in 2009 (the so-called 1603
Treasury Grant Program). Between 2010
and 2013, approximately $4.1 billion was
invested in the sector.162
As a result of state
RPS programs and federal support,
biomass leads all forms of renewable
generation, except wind, in the capacity
of nonhydropower resources.
A Carbon-Mitigation Energy Resource
Benefiting Rural Communities
Most Americans are familiar with other forms
of renewable energy, such as wind and solar.
However, in 2013 approximately 23 percent
of all renewable energy consumed was from
wood.163
Biomass energy complements wind
and solar by providing a baseload renewable
energy source that is always available.
Woody biomass is a sustainable energy
resource that plays a key role in maintaining
forest health, utilizing low-value residues that
have little other use. Using these materials
to generate electricity creates a market that
otherwise would likely not exist, helping
sustain local communities where it is produced.
The organic materials that are the basis
for biomass energy often have few or no
other productive uses and do not introduce
new carbon into the atmosphere when
used to generate energy. If these forest
by-products were not used to produce heat
or electricity, the materials would either be
open or pile burned, or they might be left on
the forest floor to decompose — a process
that releases CO2 and methane, potent
greenhouse gases, into the atmosphere.
Also, when these residues are left on the
ground, they contribute to the accumulation
of hazardous fuels, which leads to a greater
risk of catastrophic wildfire.
Wood chips from pine beetle kill in front of the
Gypsum, Colorado, Eagle Valley Clean Energy.
RO
BU
ST
BIOMASS POWER | READY, PROVEN AND COST-EFFECTIVE ENERGY | 41
Biomass Power | Ready, Proven and Cost-Effective Energy

Not surprisingly, biomass energy is a key
part of sustainably managed forests and
farms.The removal of lower-value wood from
forests is a practice that can enhance the
health, productivity and value of these lands.
Wood energy is often generated using the
by-products of forest restoration activities,
making restoration more economically feasible.
Biomass energy also provides a beneficial,
productive use for the lower-value wood
removed during forest thinning operations, and
is diversifying the forest products industry by
providing new markets for lower-value wood
fiber, in addition to traditional timber markets.
America’s forests are a sustainable and
strategic natural resource that can help
enhance our energy security, economic
opportunity, environmental quality and global
competitiveness. Public-private partnerships
have emerged across the country to maintain
federal forestlands while fueling clean
energy projects.
In 2013, U.S. Department of Agriculture
(USDA) Secretary Tom Vilsack announced
a plan to promote the growth of bioenergy
for this purpose, and recently reiterated his
support, saying, “USDA’s support for bio-
based technologies is good for the climate,
and enhances rural economic development
while it decreases our dependence on
foreign sources of oil.”164
In September 2014, nine scientists from USDA
Forest Service as well as prominent universities
and think tanks published a peer-reviewed
study in the Journal of Forestry165
arguing, in
no uncertain terms, for policies that recognize
the long-term benefits of biomass power.They
warned that not doing so could result in the loss
of a valuable carbon mitigation tool, stating:
“The current debate about biomass energy
often narrows the discussion to short-term
and direct effects of increased use of forest
biomass, understating the benefits of using
sustainably produced forest-based fuels and
materials … Carbon accounting frameworks
often misrepresent the CO2 impacts of
using biomass fuels and put at risk many
of the mitigation benefits and opportunities
provided by sustainably managed forests and
the products that flow from them.”
The authors of the study presented four key
findings they recommended be reflected in
any biomass policy framework. First, that
substantial long-term carbon mitigation
benefits are derived from sustainably managed
working forests that provide an ongoing output
of biomass to produce materials and fuels
to displace more greenhouse gas-intensive
alternatives.While the timing of benefits is
debated, the fact that these benefits exist is not.
Next, the threats to maintaining long-term
forest carbon stocks come primarily from
pressures to convert land to nonforest uses
and from natural disturbances. Research
clearly shows that demand for wood results
in investments in forestry that help prevent
deforestation and incentivize afforestation.
Third, the most effective mitigation measures
are those that provide the lowest long-term net
cumulative emissions.The benefits of forest-
based mitigation activities are sometimes
delayed, but any increased emissions are
reversible and temporary and are incurred in
the interest of limiting cumulative emissions.
Finally, proper characterization of the
global warming impacts of the mix of forest
biomass sources likely to be used for energy
shows net emissions of biogenic carbon to be
low when including the effects of market-
induced investments.
10
Ensuring the Promise of Biomass
The biomass industry has significant
potential as an energy source. In 2012, the
Union of Concerned Scientists identified
680 million tons of biomass that could
be used for energy and fuels, resulting in
54 billion gallons of nonfood ethanol and
biofuels, and enough electricity to meet
20 percent of U.S. energy demand by 2030.167
Bioenergy can help create a more stable
energy future, improve environmental quality,
and increase economic opportunities.
Yet, the industry faces challenges both to the
continued success of current facilities
and the ability to grow. State policies
often do not value the baseload capacity
provided by existing facilities. Also, state
renewable policies are an uneven patchwork
of incentives that have different rules and
widely varying values from state to state.
New biomass development is also
significantly hampered by federal tax policy
that needs significant reform, as current
law creates energy production tax credits
of varying amounts, resulting in an uneven
playing field for biomass. Moreover, the stop-
start nature of renewable energy tax credits
does not offer predictable, long-term
incentives necessary for capital intensive,
baseload energy projects like biomass.
Finally, national and state agencies involved
in the regulation of carbon emissions must
resolve policy uncertainties regarding how
biogenic emissions from biomass plants will
be regulated.The science overwhelmingly
supports the carbon benefits of taking waste
materials and converting them to energy.
Many state agencies embrace the benefits of
biomass, and the industry sees positive signs
from the administration that the Environmental
Protection Agency will soon also recognize the
benefits of biomass on a federal level.
0
20
40
60
80
100
2008 2009 2010 2011 2012 2013
Wind Solar Biomass, biogas, waste Geothermal
InstalledSolarCapacity(MW)
U.S. Cumulative Non-Hydropower Renewable Capacity by Technology,
2008–2013 (GW)
42.9
54.3
60.3
69.1
86.7
91.7
(BCSE Bloomberg, Sustainable Energy in America, Figure 9 on p. 12)166
Washington
Oregon
Nevada
California
Arizona
Utah
New Mexico
Colorado
Wyoming
Idaho
Montana North Dakota
South Dakota
Nebraska
Kansas
Oklahoma
Alaska
Texas
Louisiana
Mississippi
Arkansas
Tennessee
Kentucky
Indiana
Ohio
Illinois
Missouri
Iowa
Minnesota
Wisconsin
Michigan
Pennsylvania
New York
Vermont
Maine
Connecticut
Rhode Island
New Jersey
Delaware
Maryland
Hawaii
Massachusetts
New Hampshire
West
Virginia Virginia
Alabama
Georgia
South Carolina
North Carolina
Florida
HI 1
CA 3
CA 78
CA 9
CA 20
CA 21
CA 11
CA 12
CA 26
CA 6
CA 514
CA 13
CA 10
CA 16
CA 18
CA 17
CA 17
CA 22
CA 23
CA 19
CA 4
CA 24
CA 2
CA 115
OR 1OR 6
OR 7
OR 5
OR 2
OR 3
OR 4
WA 2
WA 4
WA 3
WA 6
WA 1
WA 5
ID 2
ID 1
CO1
TX 1
AR 2
LA 1 LA 2
FL 10
FL 9
FL 4 FL 5
FL 7 FL 8
FL 1
FL 6
FL 23
GA 2
GA 1
SC 1
NC 2
NC 1
VA 4
VA 3
PA 2
PA 1
NY 3
NY 1
NY 4
NY 2
MA 1
ME 4
ME 2
ME 1
ME 6
ME 7
NH 3
NH 2
NH 7
NH 5
NH 8NH 6
NH 4
NH 1
MN 4 MN 6 MN 5
MN 7
MN 1
MN 2
MN 8
MN 3
WI 1
IA 1
IL1
MO 1
MN 7
MI 6
MI 5MI 2
MI 1 MI 4
MI 3
MN 8
ME 3
ME 5
VA 12
AR 1
TX 3
TX 2
CA 25
U.S. Biomass Facilities
U.S. Cumulative Nonhydropower Renewable Capacity
by Technology, 2008–2013 (GW)
42 |
Biomass Power | Ready, Proven and Cost-Effective Energy
BIOMASS POWER | READY, PROVEN AND COST-EFFECTIVE ENERGY | 43

For the last 40 years, energy efficiency has
been a quiet success story in America’s
energy industry. Modern energy efficiency
in the United States began to emerge in the
1970s as changes in patterns of energy
consumption and events, such as the oil
crisis, began to put pressure on the U.S.
energy infrastructure. In response, a diverse
group of scientists and analysts from many
fields and industries began to develop
strategies and technologies for using less
energy to deliver the same or better services
to consumers and businesses. These
strategies have grown to affect almost every
activity that uses energy, and have greatly
influenced utilities, building designers,
industrial planners and manufacturers of
everything from household appliances to
heavy-duty vehicles.
The result has been an unqualified success
story, both economically and environmentally,
although one often overlooked by the public
at large. Since the oil crisis of 1974, the
U.S. economy has continued to grow while
the rate of increase in energy use has
slowed significantly. If we were using energy
today at the rate we were in 1974, we would
be consuming more than twice the amount
that we actually are using. Despite the recent
recession and the period of sluggish growth
that has followed, in the past 15 years, the
economy has grown tremendously and we
have seen total energy use remain constant.
0
50
100
150
200
250
1970
QuadsofTotalPrimaryEnergy
Energy Intensity Declines Due to Efficiency Gains
1976 1982 1988 1994 2000 2006 2012
1970 energy consumption Actual energy consumption
Energy consumption if energy
intensity were the same as in
1970 (adjusted for imports)
Note: Energy intensity is measured as quads per $ GDP
Reduction in energy
consumption as a result
of energy efficiency
0
2
4
6
8
10
Energy
efficiency
Rangeoflevelizedcosts(centsperkWh)
Energy Efficiency Costs Compared to Electricity Generation Resource
Wind Natural gas
combined
cycle
Coal Nuclear Biomass Solar PV Coal IGCC
12
14
16
0
2
4
6
8
10
Energy
efficiency
Rangeoflevelizedcosts(centsperkWh)
Energy Efficiency Costs Compared to Electricity Generation Resource
Wind Natural gas
combined
cycle
Coal Nuclear Biomass Solar PV Coal IGCC
12
14
16
Energy Intensity Declines Due to Efficiency Gains
Energy Efficiency Costs Compared to Electricity Generation Resources
Source: ACEEE using data from U.S. EIA U.S. Census data168
Source: Energy efficiency costs Molina 2014;169
other energy sources Lazard 2013170
ENERGY EFFICIENCY | A GREAT AMERICAN SUCCESS STORY | 45
Energy Efficiency | A Great American Success Story

That is due in no small part to advances
in energy-efficient technologies, policies
and practices.
Improving the Economy and Creating Jobs
Because of its proven track record in saving
consumers money, energy efficiency should
be the cornerstone of any energy policy.
Efficiency is generally our least-expensive
energy resource, meaning that it typically
costs less to save a unit of energy and
provide the same service than it costs to
produce that same unit of energy. As a result,
large cost-effective savings are achievable
across the country, regardless of local
conditions and geography. Energy efficiency
programs cost utilities only about 3 cents
per kilowatt hour, while generating the same
amount of electricity from other sources can
cost two to three times more.
Energy policies directly impact the economy,
and many studies have shown that energy
efficiency promotes economic growth
and well-being by saving consumers
money while creating jobs. Since energy
efficiency isn’t tangible, it may be difficult to
appreciate; however, the savings that result
have had a very real impact on people’s
lives. A more energy-efficient economy
makes more money available to consumers
and businesses to both save and spend.
Businesses’ bottom lines are improved and
consumers are free to spend money
in whichever area of the economy they
choose. A recent American Council for an
10
Energy-Efficient Economy (ACEEE) analysis
of the proposed EPA Clean Power Plan173
found that energy efficiency efforts could
drive more than $625 billion in investment
and create an average of 400,000 net jobs
per year through 2030.
Some of the most significant energy-
efficiency improvements to the economy
have occurred in transportation fleets and
the appliances and equipment used in
homes and workplaces. Since model year
1975, the energy required to drive a car
or light truck each mile has declined
45 percent, an improvement made possible
by technological progress and government
fuel-economy standards. And these
improvements are expected to continue as
2025 fuel economy standards call for the
average automobile to improve fuel economy
by an additional 35 percent relative to the
average new 2013 vehicle.
Similarly, efficiency improvements for
appliances and many other types of equipment
have also accelerated, driven by many of the
same forces. For example, the average 2014
refrigerator uses only about 30 percent of
the energy of a 1973 unit, even though the
2014 unit is larger, has more features, and its
inflation-adjusted price is lower.
Similar efficiency improvements have been
achieved in buildings, farms and factories
across the country, due to better building
practices, improved farming methods and
advances in process technologies and materials.
Not only is energy efficiency a critical
resource for economic growth and
productivity, it is also an important source
of employment. In the manufacturing sector,
energy efficiency plays an important role
in developing new, affordable and more
efficient products, and in improving industrial
processes that allow us to make products
with less energy than ever. Investing
resources in making homes and offices more
energy-efficient creates jobs in construction
and in related equipment and materials
manufacturing.
The positive effect of savings accrued from
energy efficiency continue to ripple through
the economy as well, creating even more
jobs as consumers and businesses are free
to spend their money from energy savings
in all other sectors of the economy. In 2010
alone, homeowners and businesses spent
less than half as much on energy as they
would have without efficiency gains, saving
over $1.3 trillion, enough to directly employ
almost 9 million workers.174
The Potential for Energy Efficiency
A study by ACEEE found that energy efficiency
could further reduce energy requirements
in our economy by about half by 2050.175
There are always opportunities to increase
the nation’s energy efficiency as technologies
evolve, and information and communications
technology innovations are enabling
revolutionary advances in energy efficiency.
For much of the past four decades, we have
improved the efficiency of individual products
that use energy, such as cars, lightbulbs and
refrigerators. Experts have been aware for
years that even greater energy savings are
available from optimizing entire energy-using
systems such as buildings, factories, freight
transportation or even cities.
The challenge has been to collect data on
operations and process the data quickly
enough to be able to make decisions to
eliminate energy waste. The information,
communications and computing revolution
of the past 15 years has given rise to the
tools needed to accomplish this goal. We
have seen the cost of sensors and controls
fall while advances in communication and
computing allow us to manage energy use
in near-real time, anticipating demands for
energy and optimizing the performance of
these energy-using systems. ACEEE, working
with industry thought leaders, has labeled
this new approach “intelligent efficiency.”176
Manifestations of intelligent efficiency are
already appearing in the marketplace,
ranging from intelligent buildings, such as
the rehabilitated Empire State Building, to
smart manufacturing plants, to the intelligent
freight systems operated by major carriers
such as UPS and FedEx. The energy savings
potential is huge, with intelligent efficiency
projects already saving more than 20 percent.
Ultimately, we could see buildings networked
with transportation systems to create
intelligent cities that can meet businesses’
and families’ needs while saving energy.
16
18
20
22
24
26
28
30
1978
Passenger cars Light trucks
CAFEstandards(miles/gallon)
Rising Fuel Economy Standards for Cards and Trucks
32
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
0
1
2
3
4
5
6
1991
Energysavingsfromappliancesand
equipmentstandards(Quads)
Energy Savings Achieved Through Appliance Efficiency Standards
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
0
1
2
3
4
5
6
1991
Energysavingsfromappliancesand
equipmentstandards(Quads)
Energy Savings Achieved Through Appliance Efficiency Standards
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Rising Fuel Economy Standards for Cars and Trucks
Energy Savings Achieved through Appliance Efficiency Standards
Source: U.S. Department of Transportation 2011171
Source: ACEEE analysis 2014 172
46 |
Energy Efficiency | A Great American Success Story
ENERGY EFFICIENCY | A GREAT AMERICAN SUCCESS STORY | 47

Energy efficiency will also inevitably play
a leading role in the fight against climate
change. In a recent report,ACEEE found that
a combination of the energy efficiency actions
already undertaken by the government
along with the future actions that could be
employed, including appliance, vehicle and
power plant standards, could cut cumulative
carbon dioxide emissions by 34 billion metric
tons, more than the total emissions produced
by the U.S. in six years.177
This would translate
into $2.6 trillion in savings for the American
people, proving that smart policies can
protect our environment while strengthening
tomorrow’s economy.
Challenges to an Energy-Efficient Future
While energy efficiency has proven highly
cost effective over the past four decades, it
continues to face challenges. Perhaps the
greatest challenge is that saving energy can be
invisible to most consumers and policymakers.
Hence, the need to increase awareness of the
untapped potential for savings through energy
efficiency and of the steps needed to realize
that potential, such as incentivizing energy-
saving programs by utilities.
Additionally, energy efficiency represents a
challenge to many established energy supply
markets whose financial viability relies on
growing demand for energy. So working
with traditional energy supply industries to
identify alternative business models that
will allow them to decouple their financial
viability from increasing energy use will be
critical. Electric and natural gas utilities are
already focused on exploring new models.
Much as we are seeing a shift from
efficiency improvements on discrete
components, the U.S. needs to consider an
integrated energy approach that optimizes
the use of available resources. This would
allow for continued economic growth while
addressing the environmental challenges
facing America and the world that result
from energy use.
Energy efficiency has been a great, but
unheralded,American energy success story for
the past four decades.The future looks bright
for efficiency, with intelligent technologies and
systems enabling greater future efficiency
savings while delivering even greater
consumer benefits. Efficiency alone cannot
meet all of the economy’s energy needs,
but with more intelligent use of all energy
resources, we can ensure continued economic
health while addressing the environmental
challenges that face our world.
10
Because of its
proven track
record in saving
consumers money,
energy efficiency
should be the
cornerstone of
any energy policy.
Efficiency is
generally our least-
expensive energy
resource.
Conclusion
America’s energy future is bright. With our abundant
array of resources, technological expertise and skilled
workforce, the United States stands on the threshold
of energy self-sufficiency at a level unthinkable just
a few years ago. Given the right policies, we can
create jobs, reduce emissions and enhance energy
security all at the same time. Bipartisan majorities of
American voters support pro-growth energy policies,
demonstrating that energy is not a partisan issue;
energy is about jobs, the economy and national
security. With a true all-of-the-above energy strategy,
the United States can achieve its full potential as a
global energy superpower.
Thank you to all the organizations that participated in
this year’s State of American Energy. With America’s
diverse and plentiful range of resources, our energy
renaissance is only beginning.
CONCLUSION | 4948 |

1. API calculations based on IRS Statements of Income and
Bureau of Land Management, Office of Natural Resources
Revenue collections, March 2014
2. Oil and Gas Journal, “Where funds will go for US projects”
infographic, updated annually (last update March 3, 2014)
3. EIA, International Energy Statistics, 2008-2012
4. Ibid
5. IEA, World Energy Outlook 2013, November 2013
6. Sonecon, Robert Shapiro and Nam Phan, Who Owns
America’s Oil and Natural Gas Companies: A 2014 Update,
October 2014
7. EIA, Annual Energy Outlook 2014, Tables A1 and A17,
May 2014
8. PwC US for API, Economic Impacts of the Oil and Natural
Gas Industry on the US Economy in 2011, July 2013
9. EIA, Today in Energy, October 4, 2013
10. EIA, Annual Energy Outlook 2014, Tables A1, A2 and A17,
May 2014
11. EIA, Annual Energy Outlook 2014, Tables A1 and A17,
May 2014
12. EIA, Annual Energy Outlook 2014, May 2014
13. Ibid
14. EIA, Monthly Energy Review, Table 3.1, September 2014
(August 2014 estimate vs. 2008 yearly average barrels
per day)
Gas Industry on the U.S. Economy in 2011, July 2013
17. EIA, Annual Energy Outlook 2014, Tables A1, A2 and A17,
May 2014
Gas Industry on the U.S. Economy in 2011, July 2013
19. API calculation based on Wood Mackenzie, Outsourcing U.S.
Refining? The Case for a Strong Domestic Refining Industry,
June 2011 and PwC US, Economic Impacts of the Oil and
Natural Gas Industry on the U.S. Economy in 2011, July 2013
Gas Industry on the U.S. Economy in 2011, July 2013 and
PwC US for API, Economic Impacts of the Oil and Natural
Gas Industry on the U.S. Economy in 2009, May 2011
21. API calculation based on public information from the Bureau
of Labor Statistics
22. IHS, Minority and Female Employment in the Oil Gas and
Petrochemical Industries, March 2014
23. API, Overview of Industry: Guidance/Best Practices
Supporting Hydraulic Fracturing, July 2013
24. EIA, Annual Energy Outlook 2014, Table A1, May 2014
25. API, Fuel Choices for Advanced Vehicles, 2006
26. EIA, Annual Energy Outlook 2014, Table A2, May 2014
27. Ibid
28. Ibid
29. EIA, Few Transportation Fuels Surpass the Energy Densities
of Gasoline and Diesel, February 2013
30. EIA, Refinery Utilization and Capacity, September 29, 2014
http://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_a.htm
31. Ibid
32. EIA, Weekly Imports Exports http://www.eia.gov/dnav/pet/
pet_move_wkly_dc_nus-z00_mbblpd_w.htm
33. U.S.Department of State,Final Supplemental Environmental
Impact Statement for the KXL Project,Page ES-6,January 2014
34. Ibid
35. API calculations based on EIA and Wood Mackenzie, U.S.
Supply Forecast and Potential Jobs and Economic Impacts
(2012-2030), September 2011
36. Wood Mackenzie, Energy Policy at the Crossroads: An
Assessment of the Impacts of Increased Access Versus
Higher Taxes on U.S. Oil and Natural Gas Production,
Government Revenue and Employment, June 2011
37. Quest Offshore, The Economic Benefits of Increasing U.S.
Access to Offshore Oil and Natural Gas Resources in the
Atlantic, December 2013
38. ICF International and EnSys Energy, The Impacts of U.S.
Crude Oil Exports on Domestic Crude Production, GDP,
Employment, Trade, and Consumer Costs, March 2014
and Supplement State-Level Economic and Employment
Impacts, May 2014
39. Calculation based on U.S. Department of Commerce data,
http://www.bea.gov/newsreleases/international/trade/
tradnewsrelease.htm
40. Nuclear Energy Institute, Nuclear Energy’s Economic
Benefits — Current and Future, April 2014, p. 1. http://
www.nei.org/CorporateSite/media/filefolder/Policy/Papers/
jobs.pdf?ext=.pdf
41. http://www.eia.gov/nuclear/generation/index.html
42. http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.
cfm?tid=2pid=2aid=12
43. International Atomic Energy Agency, Power Reactor
Information System, October 3, 2014
http://www.iaea.org/pris/
44. World Nuclear Association, World Nuclear Power Reactors
Uranium Requirements, October 1, 2014
http://world-nuclear.org/info/Facts-and-Figures/World-
Nuclear-Power-Reactors-and-Uranium-Requirements/
45. U.S. Environmental Protection Agency, Legislative Analyses
http://www.epa.gov/climatechange/EPAactivities/
economics/legislativeanalyses.html
46. See, e.g., Energy Information Administration, Energy Market
and Economic Impacts of the American Power Act of
2010, July 16, 2010. Other EIA analyses of climate-related
legislation http://www.eia.gov/analysis/
47. Nuclear Matters http://www.nuclearmatters.com/
48. See, e.g., Letter from Rep. Ed Whitfield (R-Ky.), Chairman,
Subcommittee on Energy and Power, U.S. House of
Representatives Committee on Energy and Commerce,
November 21, 2013 http://pbadupws.nrc.gov/docs/ML1333/
ML13330A589.pdf
49. Nuclear Energy Institute, U.S. Government and Nuclear
Energy Industry Response to the Fukushima Accident,
October 2013 http://www.nei.org/CorporateSite/media/
filefolder/Policy/Papers/Fukushimawhitepaper.pdf?ext=.pdf
50. U.S. Nuclear Regulatory Commission, Recommendations for
Enhancing Reactor Safety in the 21st Century: The Near-
Term Task Force Review of Insights from the Fukushima
Daiichi Accident, July 12, 2011
51. Nuclear Energy Institute, Diverse and Flexible Coping Strategies
(FLEX) Implementation Guide, NEI 12-06, August 2012
http://pbadupws.nrc.gov/docs/ML1222/ML12221A205.pdf
52. U.S. Nuclear Regulatory Commission, Status of License
Renewal Applications and Industry Activities, July 1, 2014
http://www.nrc.gov/reactors/operating/licensing/renewal/
applications.html
53. U.S. Department of Energy, SMR Licensing Technical
Support Program http://www.energy.gov/ne/nuclear-
reactor-technologies/small-modular-nuclear-reactors
54. Energy Information Administration, Annual Energy Outlook
2014, April 2014 http://www.eia.gov/forecasts/aeo/
55. For a partial list of independent analyses, see http://www.nei.
org/Why-Nuclear-Energy/Clean-Air-Energy/Climate-Change
56. Based on average U.S. home 2012 electricity consumption
from EIA and 2013 generation data from EIA
http://www.eia.gov/
57. Navigant Consulting, Job Creation Opportunities in
Hydropower, 2009 http://www.hydro.org/wp-content/
uploads/2010/12/NHA_JobsStudy_FinalReport.pdf
58. Based on 2013 generation numbers using EPA’s
Greenhouse Gas Equivalencies Calculator http://www.epa.
gov/cleanenergy/energy-resources/calculator.html
59. Navigant Consulting, Job Creation Opportunities in
Hydropower, 2010 http://www.hydro.org/wp-content/
uploads/2011/02/NHA-Annual-Conf-Frantzis-pres-Final-7.pdf
60. U.S. Department of Energy, An Assessment of Energy
Potential at Non-Powered Dams in the United States, 2012
http://nhaap.ornl.gov/system/files/NHAAP_NPD_FY11_
Final_Report.pdf
61. Based on estimated generation from powering non-
powered dams and EIA data for average U.S. household
electricity consumption for 2012
62. U.S. Department of Energy, New Stream-reach Development:
A Comprehensive Assessment of Hydropower Energy
Potential in the United States, 2014 http://nhaap.ornl.gov/
sites/default/files/ORNL_NSD_FY14_Final_Report.pdf
63. Princeton Survey Research Associates International, Jan.
2014 http://www.hydro.org/wp-content/uploads/2014/03/
NHA-Topline-January-2014-Topline-01-17-14.pdf .
64. SEIA/GTM Research, Solar Market Insight Report Q2 2014,
September 2014
September 2014
66. SEIA, Solar Heating Cooling: Energy for a Secure Future,
October 2013
67. U.S. Environmental Protection Agency, Greenhouse
Equivalencies Calculator, available at: http://www.epa.gov/
cleanenergy/energy-resources/calculator.html
September 2014
69. Ibid
70. Ibid
71. SEIA, Solar Means Business: Top U.S. Commercial Solar
Users, October 2013
72. Ibid
73. Ibid
September 2014
75. SEIA, Major Solar Projects in the United States Operating,
Under Construction or Under Development, August 2014
76. The Solar Foundation/SEIA/U.S. Department of Energy’s
SunShot Program, Brighter Future: A Study on Solar in U.S.
Schools, September 2014
September 2014
78. The Solar Foundation, National Solar Jobs Census 2013,
January 2014
79. SEIA, Solar Market Insight Report 2013 Year in Review,
March 2014
80. International Energy Agency, Technology Roadmap: Solar
Photovoltaic Energy, September 2014
81. Geothermal Energy Association Project Database, publicly
available at www.geo-energy.org
82. Goldstein, B., G. Hiriart, R. Bertani, C. Bromley, L. Gutiérrez-
Negrín, E. Huenges, H. Muraoka, A. Ragnarsson, J. Tester,
V. Zui, 2011: Geothermal Energy. An IPCC Special Report on
Renewable Energy Sources and Climate Change Mitigation
[O. Edenhofer, R. Pichs-Madruga, Y. Sokona, K. Seyboth, P.
Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen,
S. Schlömer, C. von Stechow (eds)], Cambridge University
Press, Cambridge, United Kingdom and New York, N.Y., USA
83. J. L. Sullivan and M. Q. Wang, Journal of Renewable and
Sustainable Energy, Life Cycle Greenhouse Gas Emissions
from Geothermal Electricity Production, November 2013
84. Cédric Nathanaël Hance, The Geothermal Energy
Association, Geothermal Industry Employment: Survey
Results Analysis, September 2005, p. 24-25
85. Energy Information Administration, Levelized Cost and
Levelized Avoided Cost of New Generation Resources in the
Annual Energy Outlook 2014, April 2014
86. Department of Energy Geothermal Technologies Office, Low-
temperature and Coproduced web page available http://energy.
gov/eere/geothermal/low-temperature-and-coproduced
87. Data provided by ElectraTherm
88. IHS, Oil Natural Gas Transportation and Storage
Infrastructure: Status, Trends and Economic Benefits,
December 2013
89. API and Association of Oil Pipelines, Pipeline101.com,
Overview, 2007
90. PHMSA, Annual Report Mileage for Hazardous Liquid or
Carbon Dioxide Systems, August 2013
REFERENCES | 51

91. http://www.eia.gov/pub/oil_gas/natural_gas/analysis_
publications/ngpipeline/index.html
92. Energy Policy Research Foundation, Inc., Pipelines, Trains
and Trucks: Moving Rising North American Oil Production to
Market, October 2013, p. 18
93. AOPL, API, U.S. Liquid Pipeline Usage Mileage Report,
October 2014
94. PHMSA, Annual Report Mileage for Hazardous Liquid or
Carbon Dioxide Systems, Accessed October 23, 2014.
95. Association of American Railroads, Waybill and Fleet
Databases, 1st Quarter 2014.
96. https://www.aar.org/KeyIssues/Background-Papers/
Crude%20oil%20by%20rail.pdf
97. Ibid
98. EIA, Rail Traffic Reflects More Oil Production, Less Coal-
Fired Electricity Generation, February 5, 2013
99. http://www.forestbioenergy.net/training-materials/fact-
sheets/module-4-fact-sheets/fact-sheet-4-5-biomass-
transportation-and-delivery/
100. http://energytomorrow.org/energy-infrastructure/~/media/
EnergyTomorrow/Infrastructure-pdfs/maritime.pdf
101. Ibid
102. Ibid
103. Wall Street Journal, Awash in Coal, U.S. Imports Even More,
August 13, 2014 http://online.wsj.com/articles/awash-in-
coal-u-s-imports-even-more-1407974928
104. Ibid
105. EIA, Electric Power Annual, Table 2.1, December 2013
106. American Society of Civil Engineers, Failure to Act: The
Economic Impact of Current Investment Trends in Electricity
Infrastructure, 2011
107. Congressional Research Service, Richard J. Campbell,
Weather-Related Power Outages and Electric System
Resiliency, August 2012
108. Executive Office of the President, Economic Benefits of
Increasing Electric Grid Resilience to Weather Outages,
August 2013
109. Bipartisan Policy Center, Cybersecurity and the North
American Electric Grid: New Policy Approaches to Address
an Evolving Threat, February 2014, p. 9
110. Ibid.
111. U.S. Department of Homeland Security, Incident Response
Activity, ICS-CERT Monitor, April-June 2013
113. IHS, The Contributions of the Natural Gas Industry to the
U.S. National and State Economies, September 2009
114. EIA, Annual Energy Outlook 2014, Table A2, April 2014
115. IHS, America’s New Energy Future: The Unconventional Oil
and Natural Gas Revolution and the U.S. Economy, Volume
3: A Manufacturing Renaissance, September 2013
116. EIA, http://www.eia.gov/todayinenergy/detail.cfm?id=12451
118. IHS, The Unconventional Energy Revolution: Estimated
Energy Savings for Public School Districts and State and
Local Governments, June 5, 2014
120. IHS, The Contributions of the Natural Gas Industry to the
U.S. National and State Economies, September 2009
121. Ibid
122. EIA, U.S. Energy Related Carbon Dioxide Emissions, 2012,
October 21, 2013
123. EIA, Annual Energy Outlook 2014, April 2014
124. http://triblive.com/business/headlines/6888227-74/
emissions-gas-epa#axzz3GJxq225D
125. API, Hydraulic Fracturing QAs http://www.api.org/
oil-and-natural-gas-overview/exploration-and-production/
hydraulic-fracturing/hydraulic-fracturing-qa.aspx
126. EIA, U.S. Energy Outlook, presentation by Adam Sieminski
to Harvard Univ. John F. Kennedy School of Government,
March 10, 2014
127. EIA, Annual Energy Outlook 2014, Table A2, April 2014
128. http://www.api.org/news-and-media/news/
newsitems/2014/nov-2014/gerard-american-voters-
overwhelmingly-voted-for-energy
129. http://www.api.org/~/media/Files/Policy/LNG-Exports/API-
LNG-Export-Report-by-ICF.pdf
130. ICF International, U.S. LNG Exports: State-Level Impact on
Energy Markets and Economy, November 2013
131. Ibid
132. ICF, U.S. LNG Exports: Impacts on Energy Markets and the
Economy, May 15, 2013
133. Lazard,Lazard’s Levelized Cost of EnergyAnalysis —Version
8.0,September 2014 http://www.lazard.com/PDF/Levelized%20
Cost%20of%20Energy%20-%20Version%208.0.pdf
134. American Wind Energy Association, U.S. Wind Industry
Annual Market Report: Year Ending 2013, ©2014
135. Xcel Energy news release, Xcel Energy Proposes 33 Percent
Increase in Midwest Wind Portfolio, July 16, 2013 http://
www.xcelenergy.com/About_Us/Energy_News/News_
Archive/Xcel_Energy_proposes_33_percent_increase_in_
Midwest_wind_portfolio
136. MidAmerican Energy news release, MidAmerican
Energy Company Announces Details of 1,050 Megawatt
Wind Expansion, August 12, 2013 http://www.
midamericanenergy.com/wind_news_article.aspx?id=646
137. U.S. Department of Energy, 2013 Wind Technologies Market
Report, August 2014 http://emp.lbl.gov/sites/all/files/2013_
Wind_Technologies_Market_Report_Final3.pdf
139. American Wind Energy Association news release,
WINDPOWER 2014 Inaugurates Vision of a Far Larger
Industry, May 6, 2014
140. U.S. Department of Energy, 20% Wind Energy by 2030:
Increasing Wind Energy’s Contribution to U.S. Electricity
Supply, July 2008 http://20percentwind.com/20percent_
wind_energy_report_revOct08.pdf
141. Lazard, Lazard’s Levelized Cost of Energy Analysis —
Version 8.0, September 2014 http://www.lazard.com/PDF/
Levelized%20Cost%20of%20Energy%20-%20Version%20
8.0.pdf
143. Science Daily, Wind Turbine Payback: Environmental
Lifecycle Assessment of 2-Megawatt Wind Turbines,
June 16, 2014 http://www.sciencedaily.com/
releases/2014/06/140616093317.htm
144. U.S. Department of Energy, 20% Wind Energy by 2030:
Increasing Wind Energy’s Contribution to U.S. Electricity
Supply, July 2008 http://20percentwind.com/20percent_
wind_energy_report_revOct08.pdf
146. Breaking Energy, Wind Power Lessons from the Texas
Heat Wave, Aug. 10, 2011 http://breakingenergy.
com/2011/08/10/wind-power-lessons-from-the-texas-
heat-wave/
148. Eugene M. Trisko, Economic and Job Benefits of Coal-Based
Generation, December 2013
149. ACCCE, Coal Facts, March 2014 http://americaspower.org/
sites/default/files/Coal%20Facts%20March%202014.pdf
150. EIA, International Energy Outlook, 2013
151. ACCCE, Coal Unit Shutdowns as of July 28, 2014, July 2014
152. U.S. Senator Lisa Murkowski, Press Release, GAO Findings
Reinforce Reliability Concerns, September 15, 2014
153. Energy Ventures Analysis, Coal-Fired Power Investment in
Emission Controls, October 2013
154. EIA, Monthly Energy Review, Table 7.1, February 2014;
Electric Power Monthly, March 2014; U.S. EPA, National
Emissions Inventory, Air Pollutant Emissions Trends Data,
1970-2013, Fuel Combustion Electric Utilities (for PM); and
EPA Air Markets Program data (for SO2 and NOx)
155. EPA, Regulatory Impact Analysis for the Proposed Carbon
Pollution Guidelines for Existing Power Plants and Emission
Standards for Modified and Reconstructed Power Plants,
June 2014.
156. National Economic Research Associates, Potential Impacts
of EPA Clean Power Plan, October 2014
157. ACCCE, Climate Actions by Other Countries, October 2014
158. ACCCE, Six Major Myths about EPA’s Proposed Carbon
Regulations, June 2014
159. Testimony of Nicholas K. Akins; Chairman, President and
CEO of American Electric Power, before the Senate Energy
and Natural Resources Committee, April 10, 2014
160. Testimony of Philip D. Moeller, Commissioner, Federal
Energy Regulatory Commission, before Senate Energy and
Natural Resources Committee, April 10, 2014
161. Based on industry data collected by the Biomass Power
Association
162. BPA calculation based on Treasury 1603 data http://www.
treasury.gov/initiatives/recovery/Documents/STATUS%20
OVERVIEW.pdf
163. EIA, Short Term Energy and Renewable Fuels Outlook,
October 2014
164. USDA, Vilsack Announces Farm Bill Funding for Bioenergy
Research, Converting to Biomass Fuel Systems,
June 2014 http://www.usda.gov/wps/portal/usda/
usdahome?contentidonly=truecontentid=2014/06/0122.
xml
165. Journal of Forestry, Forest Carbon Accounting
Considerations in U.S. Bioenergy Policy, August 2014 http://
www.ingentaconnect.com/content/saf/jof/pre-prints/
content-jof14009
166. Business Council on Sustainable Energy Bloomberg New
Energy Finance, Sustainable Energy in America 2014 Fact
Book, February 2014
167. Union of Concerned Scientists, The Promise of Biomass:
Clean Fuel if Handled Right, September 2012
168. Update of figure from John A. Laitner, et al., ACEEE, The
Long-Term Energy Efficiency Potential: What the Evidence
Suggests, January 2012, page 5
169. Maggie Molina, ACEEE, The Best Value for America’s Energy
Dollar: A National Review of the Cost of Utility Energy
Efficiency Programs, March 2014, page 35
170. Lazard, Levelized Cost of Energy Analysis: Version 7.0,
August 2013, page 4
171. Sara Hayes, et al., ACEEE, Change Is in the Air: How States
Can Harness Energy Efficiency to Strengthen the Economy
and Reduce Pollution, April 2014
172. U.S. Department of Transportation, Summary of Fuel
Economy Performance, April 2011, page 3
173. Amanda Lowenberger, et al., ACEEE, The Efficiency Boom:
Cashing In on the Savings from Appliance Standards, March
2012, updated 2014
174. ACEEE, unpublished analysis, September 2014
175. John A. Laitner, et al.,ACEEE,The Long-Term Energy-Efficiency
Potential: What the Evidence Suggests, January 2012
176. Neal Elliott, Maggie Molina, and Dan Trombley, ACEEE, A
Defining Framework for Intelligent Efficiency, 2012
177. Lowell Ungar, ACEEE, Government Works: Federal Agency
Actions on Energy Efficiency, 2014
52 |

American Petroleum Institute | Washington, D.C. | January 2015
www.api.org
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API: The State of American Energy Report 2015

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