Overview

Resources and Consumption

Virginia has minor natural gas and coal reserves, nearly all of which are found in the Central Appalachian Basin in the southwestern part of the State. In addition, resource assessments show that substantial oil and gas reserves could underlie the land beneath Virginia’s offshore waters, which are part of the federally administered Mid-Atlantic Outer Continental Shelf (OCS). Congressional and Presidential moratoria prohibiting energy development in that offshore area were established in 1990 and expired in 2008. High wind power potential exists off of Virginia’s Atlantic coast and in the Chesapeake Bay. Virginia’s energy demand is distributed fairly evenly among the sectors of the economy, with transportation leading the others by a small margin.

Petroleum

Virginia’s only petroleum refinery, in Yorktown, processes foreign crude oil delivered by barge via the Chesapeake Bay. The Yorktown refinery primarily supplies regional markets. Petroleum products are also delivered to Virginia at the Port of Norfolk and via the Colonial and Plantation pipelines from the Gulf Coast. Virginia’s total petroleum consumption is high. Reformulated motor gasoline blended with ethanol is required in the northern Virginia suburbs of Washington, D.C., and in the metropolitan areas of Richmond and Norfolk-Hampton Roads.

Natural Gas

Virginia’s natural gas production is minor but enough to supply about one-third of State demand. Virginia produces both conventional natural gas and coalbed methane in the Central Appalachian Basin, which covers the State’s western panhandle. Most of Virginia’s natural gas production comes from coalbed methane fields, two of which are among the 100 largest natural gas fields in the United States. As with most States on the East Coast, the majority of Virginia’s natural gas supply is delivered from the Gulf Coast region via several major interstate natural gas pipelines. The State ships over four-fifths of its natural gas receipts to Maryland and the District of Columbia en route to other markets in the Northeast. Virginia’s natural gas consumption is distributed relatively evenly among the residential, commercial, industrial, and electricity generation sectors. About one-third of households in Virginia use natural gas as their primary energy source for home heating.

Coal, Electricity, and Renewables

Virginia accounts for more than 5 percent of U.S. coal production east of the Mississippi River. Production takes place at surface and underground mines in the Central Appalachian Basin. Large volumes of coal move through Virginia by rail, including production from Kentucky and West Virginia. Virginia’s coal is shipped to nearly half of the States in the Nation; the primary recipients are Georgia and Tennessee. Most coal consumed in Virginia is used for electricity generation.

Coal-fired power plants typically account for nearly one-half of the State’s electricity generation. Two nuclear power plants account for about one-third of the State’s generation, and natural gas- and petroleum-fired power plants account for much of the rest. Close to one-half of households in Virginia use electricity as their primary energy source for home heating. Wood and wood waste provide Virginia with about 2.5 percent of its total electricity production, while other renewable sources, such as hydroelectric power, municipal solid waste, and landfill gas, contribute minimally. In April 2007, Virginia established a voluntary renewable portfolio goal that encourages utilities to generate 12 percent of base-year 2007 sales from renewable sources by 2022.