Overview

Resources and Consumption

The Tennessee and Cumberland river systems, originating in the Appalachian Mountains, provide Tennessee with some of the highest hydroelectric power potential in the United States. Tennessee also has minor coal reserves in the Appalachian Basin in the eastern part of the State. Tennessee ranks among the top 20 energy-consuming States in the country both in absolute terms and on a per capita basis. The industrial sector leads State energy demand.

Petroleum

Tennessee’s crude oil production is minor. The State’s only refinery, located in Memphis, receives crude oil supply via the Capline pipeline, which originates in the Gulf Coast region and passes through western Tennessee on its way to Midwest refining markets. Tennessee receives petroleum products by pipeline from several pipeline systems, including branches of the Colonial and Plantation pipelines. Several waterways, including the Mississippi River, also provide an important transportation route for interstate petroleum product shipments. A 100-million-gallon-per-year ethanol plant is currently under construction near Obion, Tennessee, and is expected to be operational by the late summer or early fall of 2008.

Natural Gas

Several major natural gas pipelines from the Gulf Coast supply Tennessee as they pass through the State on the way to Northeast and Midwest markets. Industry is Tennessee’s largest natural gas-consuming sector and accounts for more than two-fifths of State demand. About one-third of Tennessee households use natural gas as their primary home-heating fuel.

Coal, Electricity, and Renewables

Coal-fired power plants typically generate about three-fifths of the electricity produced in Tennessee; nuclear power and hydroelectric power supply the remainder. Tennessee’s coal production is minor, and the State’s coal-fired power plants rely on coal deliveries from other States by railroad and river barge. The top coal-supplying States to Tennessee are Kentucky, Wyoming, Virginia, Illinois, and Colorado. Tennessee is among the leading nuclear power States in the country, with two nuclear power plants located in the southern part of the State near Chattanooga. The single-unit Watts Bar nuclear power plant, which began commercial operation in 1996, was the last new nuclear reactor to come online in the United States. With numerous hydroelectric power plants located on the Tennessee and Cumberland river systems, Tennessee is one of top hydroelectric power producers east of the Rocky Mountains. The federally administered Tennessee Valley Authority (TVA) owns virtually all of the State’s electricity generation assets. Tennessee electricity consumption is high and the State leads the United States in per capita residential electricity consumption. More than one-half of Tennessee households use electricity as their primary source of energy for home heating.