A Quick Look at How the Energy Industry Functions

A Quick Look at How the Energy Industry Functions

The United States uses and produces many different types and sources of energy, which can be grouped into general categories such as primary and secondary, renewable and nonrenewable, and fossil fuels. Primary energy sources include fossil fuels (petroleum, natural gas, and coal), nuclear energy, and renewable sources of energy. Electricity is a secondary energy source that is generated (produced) from primary energy sources.

How Much is Used and Produced?

Domestic energy production equaled about 95% of U.S. energy consumption in 2018. The amount of energy produced in the United States was equal to about 95.7 quads, which was equal to about 95% of total U.S. energy consumption, the largest share since 1967. Net imports of crude oil accounted for the majority of the difference between total primary energy production and total primary energy consumption in 2018.

Fossil fuels—petroleum, natural gas, and coal—accounted for about 79% of total U.S. primary energy production in 2018.

Changes Over the Years

The mix of U.S. energy consumption and production has changed over time. Fossil fuels have dominated the U.S. energy mix for more than 100 years, but the mix has changed decade to decade.

Coal production has trended down since its peak of 24.0 quads in 1998. A major reason for the general decline in U.S. coal production in recent years is the decrease in U.S. coal consumption for electricity generation.

Natural gas production reached a record high of 31.5 quads in 2018. In 2017 and 2018, U.S. dry natural gas production was greater than U.S. natural gas consumption for the first time since 1966. More efficient drilling and production techniques have resulted in increased production of natural gas from shale and tight geologic formations. The increase in production contributed to a decline in natural gas prices, which in turn has contributed to increases in natural gas use by the electric power and industrial sectors.

Crude oil production generally decreased each year between 1970 and 2008. In 2009, the trend reversed and production began to rise, and in 2018, U.S. crude oil production was 22.8 quads, the highest on record. More cost-effective drilling and production technologies helped to boost production, especially in Texas and North Dakota.

Nuclear energy production in commercial nuclear power plants in the United States began in 1957 and grew each year through 1990, generally leveling off after 2000. In 2018, even though there were fewer operating nuclear reactors than in 2000, nuclear power plants produced the second-highest amount of energy on record at 8.4 quads, mainly because of a combination of increased capacity from power plant upgrades and shorter refueling and maintenance cycles.

Renewable energy production and consumption both reached record highs of about 11.7 and 11.5 quads, respectively, in 2018. Although hydroelectric power production in 2018 was about 6% lower than the 50-year average, biomass, wind, solar, and geothermal energy production were higher than in any previous year.

It will be interesting to track the changes as renewable energy becomes more practical in the decades to come.