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Groundbreaking Study Shows Enormous Financial Impact of Alabama’s Energy Industry

By Bill Britt
Alabama Political Reporter

A first of its kind study found that Alabama’s energy industry contributes more than $13 billion to the State’s economy each year, and that at least 124,000 jobs depend on the energy sector.

This groundbreaking study released by the Energy Institute of Alabama showed that Alabama’s General Fund and Education Trust Fund budgets are enriched by at least $385 million directly from the energy sector.


The study, conducted by Auburn University at Montgomery Professor Dr. Keivan Deravi using figures from 2015, also determined that Alabama ranks sixth in the nation in total electricity generation and 16th in total energy production. Alabama ranks fifth in the country in electricity generated by biomass sources and is 17th in the number of producing natural gas wells.

“We were certain that a strong energy sector helped make for a stronger Alabama, but we never had the concrete data to support our beliefs,” said Seth Hammett, the chairman of the new nonprofit Energy Institute of Alabama that co-sponsored the study along with the Economic Development Partnership of Alabama. “This study spells out just how important the industry is to our State. Behind the numbers are hard-working Alabamians who help keep the lights on, keep the vehicles rolling and ensure our homes are cool in the summer and warm in the winter.”

According to the data, Alabama is one of the largest generators of electricity from nuclear power in the nation, producing approximately one-fourth of the electricity generated in the State.

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“Reliable, affordable energy is vitally important to businesses and manufacturers in our State and seeking to come to Alabama,” said George Clark, president of Manufacture Alabama. “This study brings into focus how fortunate we are to have a vibrant energy sector and one that understands how cooperation with business and industry makes for a better State for all of us.”

Historically, coal has fueled the largest share of electric power generation in the Alabama. Recently, however, natural gas has provided a greater amount, exceeding coal-fired generation in 2012, 2014 and 2015.

Nationally, our State ranks 14th in coal production, however, according to the US Energy Department in 2014, two-thirds of the coal produced in Alabama was shipped abroad with the Port of Mobile as a central key to moving it to Europe, South America and Central America.

The stated goal of the Energy Institute of Alabama is to offer “research and development assets with our natural resources to strengthen the energy industry, to serve our customers, and to meet demands and create economic growth for our State by promoting public policies that ensure reliable, affordable and clean energy for Alabamians,” according to its vision statement.

The majority of data used in this report was gleaned from nationally available databases such as the US Bureau of Economic Analysis (BEA) and the US Bureau of Labor Statistics (BLS). A small sample of data for Alabama-based utility companies was provided by the Energy Institute of Alabama. This report solely concentrated on 2014 and 2015 data.


Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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