Report: Energy industry has $13.2 billion impact on Alabama

Report: Energy industry has $13.2 billion impact on Alabama
The energy industry has a $13.22 billion economic impact on Alabama, according to a new report. (Nik Layman / Alabama NewsCenter)

The energy industry has a $13.2 billion economic impact on Alabama and generates 124,000 jobs for the state, according to a new report from Auburn University at Montgomery.

Energy Institute of Alabama Chairman Seth Hammett talks new report on energy industry’s impact on the state from Alabama NewsCenter on Vimeo.

In what is believed to be the first comprehensive study of its kind on the industry in the state, the Economic Development Partnership of Alabama and the Energy Institute of Alabama commissioned the report from Keivan Deravi, professor of economics at AUM.

Hydro is a large generator of power in the state. (Nik Layman / Alabama NewsCenter)
Hydro is a large generator of power in the state. (Nik Layman / Alabama NewsCenter)

Among the findings:

  • The energy industry puts $385 million into state tax coffers annually.
  • The production sector of the electric industry accounts for an $8.24 billion economic impact in the state.
  • The electric industry accounted for $1.13 billion in construction in the state last year.

The study also ranked Alabama in comparison to other states. Among those rankings were:

  • Third-largest coal exporting seaport;
  • Fifth in biomass electricity generation;
  • Sixth in electricity generation;
  • Eighth in electricity generated from renewables (counting hydro);
  • 14th in total coal production;
  • 16th in total energy production; and
  • 17th in number of productive natural gas wells.

Former Alabama Speaker of the House Seth Hammett is chairman of the Energy Institute of Alabama. He said he was pleasantly surprised by some of the findings.

“In terms of ranking, I wouldn’t have guessed that Alabama would be fifth in the country in the use of biomass. I wouldn’t have guessed that we would be eighth in the country in terms of renewables,” he said. “Now, the Environmental Protection Agency wouldn’t classify us that high because they don’t classify hydro as being renewable. But I think that’s ridiculous and Dr. Deravi did include that and that’s where we came up with that eighth ranking.”

Hammett said Alabama being sixth in electricity generation was also a surprise.

Nuclear Power, like that produced at Farley Nuclear Plant near Dothan, accounts for one-quarter of the state's electric power generation, according to a new report. (file)
Nuclear Power, like that produced at Farley Nuclear Plant near Dothan, accounts for one-quarter of the state’s electric power generation, according to a new report. (file)

One of the findings was that 25 percent of the state’s electricity comes from nuclear power, which Hammett said was unexpected.

Getting such expert information about the state’s energy industry was important, Hammett said.

“There was speculation about what the impact was and where we ranked, but we didn’t know until the study was complete just what the truth was concerning that matter,” he said.

“We know that energy plays an essential role in driving economic growth in our state,” said Alabama Power Chairman, President and CEO Mark Crosswhite. “The solid data in this study will help guide us as we work to continue providing clean, safe, reliable, and affordable energy to support Alabama’s economic development.”

Now that the report is complete, Hammett and others are sharing the findings with members of the Legislature and local officials across the state.

“The reason we formed the institute in the first place was to try to separate fact from fiction and to make sure that the people, but particularly their elected officials, understood fact from fiction,” Hammett said.

Now that he has facts to share, how receptive have officials been?

“The information is being well-received,” he said.

It is a report the Energy Institute will build on.

“We plan to come back in a couple of years and see what the change has been,” Hammett said. “We’ve got a baseline now with the first study that’s ever been made about this industry.”

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(Infographic by Dan Guffey / Alabama NewsCenter)

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