Overview

Resources and Consumption

Although Mississippi is not as rich in energy as neighboring Louisiana, the State has substantial energy resources. Oil and gas fields are found primarily in the southern half of the State. However, in recent years, new deposits have been discovered in the Black Warrior Basin in the north, and onshore and offshore along the Gulf Coast. Geologists believe that further exploration of those areas could reveal important new oil and gas reserves. Although Mississippi’s economy traditionally relied on agriculture, manufacturing has now become the State’s largest industry. The industrial and transportation sectors dominate State energy use and per capita energy consumption is high.

Petroleum

Mississippi produces a small amount of crude oil, mostly from wells in the southern half of the State. Mississippi has three oil refineries, which together account for more than 2 percent of total U.S. refining capacity. Mississippi’s largest refinery, located along the Gulf Coast in Pascagoula, processes crude oil imported by marine tanker from Central and South America. The Pascagoula refinery supplies fuel to markets in the South and Southeast, using marine shipments and connections to the Colonial and Plantation pipelines. Mississippi is one of the few States in the Nation that allow the statewide use of conventional motor gasoline. (Most States require the use of specific gasoline blends in non-attainment areas due to air-quality considerations.)

A major propane supply hub is located in Hattiesburg, Mississippi, where the Dixie Pipeline has a network of terminals and storage facilities. About one in five Mississippi households use liquefied petroleum gases (LPG) as their primary home heating fuel, compared with fewer than one in 10 households nationwide.

In January 2007, the U.S. Department of Energy (DOE) chose a group of salt domes in Richton, Mississippi, as a new storage site for the Strategic Petroleum Reserve. Designed to cushion the effects of potential crude oil supply disruptions, the new facility will hold about 160 million barrels of crude oil. The DOE chose this site in part because its inland location makes it less vulnerable to hurricanes.

Hurricane vulnerability is an issue for Mississippi’s oil and gas infrastructure, much of which is located along the Gulf Coast. In 2005, Hurricane Katrina caused major damage to the Pascagoula refinery. In addition, power outages in Mississippi affected a Plantation Pipeline pump station, ultimately forcing the line to shut down and causing fuel supply problems throughout the southeastern United States.

Natural Gas

Mississippi’s natural gas production is minimal, accounting for less than 1 percent of total U.S output. In recent years, new wells have been completed at the Mariner Field along the Gulf Coast and at the Maben Field in the Black Warrior Basin. Despite new completions, Mississippi’s marketed natural gas production has fallen drastically since 2003, when the State’s natural gas wells began producing increasing volumes of non-hydrocarbon gases, such as carbon dioxide, helium, hydrogen sulfide, and nitrogen.

Mississippi’s natural gas processing industry has expanded in recent years to serve growing offshore supplies brought in from federally administered Outer Continental Shelf (OCS). Mississippi has one of the largest natural gas processing plants in the United States, Pascagoula, which expanded capacity in 2000 in order to accept natural gas production transported by pipeline from the OCS.

Due primarily to demand from electricity generators and the industrial sector, Mississippi’s per capita natural gas consumption is high. To meet demand, Mississippi purchases more than one-half of its natural gas from neighboring States. In the future, Mississippi could begin importing international supplies, as two liquefied natural gas (LNG) import terminals have been proposed near Pascagoula.

Coal, Electricity, and Renewables

Mississippi’s electric power production is low, and the State imports electricity from neighboring States in order to satisfy consumer demand. Coal is Mississippi’s leading generation fuel, typically accounting for more than one-third of electricity produced within the State. Mississippi’s only coal mine, located in Choctaw County, supplies lignite coal to a 440-megawatt mine-mouth power plant that uses clean-coal technology. Mississippi’s other coal-fired power plants are fueled by coal shipped primarily from Colorado. Natural gas is the second most important fuel for electricity generation, followed by nuclear power, which typically accounts for about one-fourth of the electricity produced in the State. A single large reactor at the Grand Gulf Nuclear Power Station provides all of Mississippi’s nuclear power. Mississippi also produces a small amount of electricity from a wood-fired power plant in the eastern part of the State.

Mississippi’s residential per capita electricity use is high, due in part to high air-conditioning demand during hot summer months and the widespread use of electricity for home heating during generally mild winter months.