Middle Market Resources

Energy Industry Value Chain


Whether manufacturing engineered products or providing services to support energy’s movement through the economy, MMRs comprehensive understanding of the energy industry value chain can benefit its client’s through access to a wide range of potential solutions for your company's strategic entry / exit objectives.

The U.S. Energy Industry

The United States is a leader in the production and supply of energy and is one of the world’s largest energy consumers. The energy industry is the third largest industry in the United States. U.S. energy companies produce oil, natural gas, coal, nuclear power, renewable energy and electricity services, as well as supply energy and electricity technologies worldwide. U.S.-made energy and electricity equipment dominates the domestic market and commands strong market share abroad.

According to the U.S. Energy Information Administration, total domestic expenditures for energy services are expected to grow from approximately $1.2 trillion in 2010 to over $1.7 trillion in 2030. Growing consumer demand and world class innovation – combined with a competitive workforce and supply chain capable of building, installing and servicing all energy technologies – makes the United States the world’s most attractive market in the $6 trillion global energy market.

Industry Subsectors

Oil and Gas: Despite an overall decline in domestic oil production, the United States remains the world’s third largest oil producer. The United States continues to meet most of its natural gas demand through domestic production. According to the Minerals Management Service, the outer continental shelf areas and many on-shore federal lands hold undiscovered resources of oil and gas. Increased offshore Gulf of Mexico production and higher output from North Dakota’s Bakken shale contributed greatly to the rise in domestic production. Marcellus Shale in the northeastern region of the United States is also believed to hold great opportunities for natural gas production.

Coal: The United States is the second largest coal-producing and coal-consuming country in the world. Coal is the most abundant domestic energy resource, making up 94 percent of fossil energy reserves. A total of 28 coal plants are under construction in the U.S. and due to come on line by 2012. Coal-fired power generation facilities have widely applied clean-coal technologies, and the United States is recognized internationally for its market leadership in clean-coal technology and emissions-abatement equipment.

Nuclear Energy: The United States operates the most nuclear reactors, has the largest installed nuclear power capacity, and generates the most nuclear power in the world. Nearly 20 percent of U.S. electricity is produced at 104 nuclear reactors in 31 states. By 2015, the first of 26 new nuclear reactors are expected to come on line. Subsectors of the civil nuclear industry are represented by companies that produce nuclear components (reactors, nuclear monitoring instruments, boilers, heat exchangers, industrial valves, instrument modules, insulation, economizers for boilers, pumps and other reactor parts), nuclear fuel (uranium mining, conversion, enrichment, fuel assembly fabrication, and spent fuel storage), nuclear engineering and construction (site preparation, materials and equipment procurement, and construction), and nuclear advisory services (consulting on nuclear-related regulatory policies, human resources, and infrastructure; legal services; and operations and program management services).

Industrial Energy Efficiency: The market for energy efficiency is large and growing. According to the American Council for an Energy-Efficient Economy (ACEEE), $300 billion was domestically invested in energy efficient technologies and infrastructure in 2004. An ACEEE study assessed the market size across all sectors (commercial/residential building, industry and transportation) at roughly $43 billion. A McKinsey & Co. report estimates that $113 billion in investments in industrial energy efficiency between 2009 and 2020 would yield $442 billion in total present-value savings.

Smart Grid: The United States is considered the international leader in the development and deployment of smart grid technologies and services. The smart grid subsector is defined by the electric grid equipment and services required for the modernization of distribution and transmission systems as well as the Information and Communication Technologies (ICT) that support a fully networked grid and enable two-way communications and electric flows. The United States is the third largest producer of electric grid modernization equipment, holding a 9 percent world market share with exports totaling $14 billion in 2009. Additionally, U.S. ICT firms are leading developers and exporters of smart grid technologies and services, with the domestic market for this segment estimated at $5.6 billion in 2010 and predicted to nearly double by 2015.

Renewable Energy: Traditional forms of renewable energy, such as geothermal heat and hydro power, have been available sources of energy since ancient times. Recent global efforts to reduce the effects of the depletion and reliance on fossil fuels have focused on harnessing the wind, solar energy and various forms of waste to produce commercial quantities of electrical power generation. In 2011, the United States renewable energy market had a total revenue of $51.1 billion, representing a compound annual growth rate of11.8% between 2007 and 2011. By 2030, it is expected that renewables, on a global basis, will generate 11% of global electricity supply.

*Source: selectusa.commerce.gov