Overview

Resources and Consumption

Kentucky has major coal deposits in the eastern Central Appalachian Basin and in the western Illinois Basin. Those basins also hold minor reserves of oil and gas. The Tennessee and Cumberland Rivers in the Ohio River Basin provide hydroelectric power potential. Kentucky’s per capita energy consumption is among the highest in the Nation, and the industrial sector leads State energy demand. The State is a leader in the energy-intensive aluminum industry.

Petroleum

Kentucky has minor crude oil production but is host to two refineries, located in Catlettsburg and Somerset. The Catlettsburg refinery is the larger of the two and receives crude oil supply from the Gulf Coast via the Capline Pipeline. The much smaller Somerset refinery processes crude oil produced regionally in Kentucky, Tennessee, and West Virginia. In addition to deliveries from these refineries, Kentucky also receives petroleum product shipments by pipeline and river barge. Kentucky’s total petroleum consumption is high relative to its population. The Louisville metropolitan area and the Kentucky suburbs of Cincinnati require reformulated motor gasoline blended with ethanol. Kentucky has two ethanol plants that help supply those areas.

Natural Gas

Kentucky’s natural gas production, much of which comes from the Big Sandy field in the eastern part of the State, typically accounts for less than 1 percent of total U.S. natural gas production. The majority of Kentucky’s natural gas is supplied by pipeline from the Gulf Coast. Industry is Kentucky’s largest natural gas-consuming sector, accounting for about one-half of total natural gas consumption in the State. More than two-fifths of Kentucky households use natural gas as their primary fuel for home heating.

Coal, Electricity, and Renewables

Kentucky is the third largest coal-producing State, after Wyoming and West Virginia. It accounts for roughly one-tenth of total U.S. coal production and nearly one-fourth of U.S. coal production east of the Mississippi River. Although all Kentucky coal is bituminous, its sulfur content varies across the State. Coal produced in the Central Appalachian Basin is low in sulfur, while coal produced in the Illinois Basin is high in sulfur. Nearly one-third of all the coal mines in the Nation are found in Kentucky, more than in any other State. Kentucky has both surface and underground coal mines. Large volumes of coal move into and out of Kentucky by railcar and river barge. Kentucky delivers approximately three fourths of State coal production to more than two dozen States, most of which are on the East Coast and in the Midwest. Nearly 95 percent of the coal used in Kentucky is burned for electricity generation, and most of the remainder is used in industrial and coke plants.

Coal-fired power plants typically account for more than nine-tenths of the electricity produced in Kentucky, making it one of the most coal-dependent States in the Nation. The remaining electricity generation within the State is mostly provided by petroleum-fired and hydroelectric power plants.

Kentucky’s per capita consumption of residential electricity is among the highest in the United States. More than two-fifths of Kentucky households use electricity as their primary energy source for home heating.