Average costs of fossil fuels for electricity generation in the U.S. 2005-2021

The cost of fossil fuels in the electric power industry varies depending on the source that is used. In general, fossil fuels cost about 3.82 U.S. dollars per million British thermal units (Btu) in 2021, ranging from 1.98 U.S. dollars per million Btu for coal to 10.08 U.S. dollars per million Btu for petroleum.

Coal and petroleum costs

In general, petroleum costs have been the most volatile, while coal costs have remained relatively stable in comparison. Average costs of petroleum, which includes various kinds of oil, fluctuated significantly over the period of consideration and reached a peak of 12.48 U.S. dollars per million Btu in 2011.

Natural gas price

Similar to coal, natural gas prices can vary based on the region. Being a large producer of domestic natural gas, the U.S. has notably lower prices compared to Europe and Japan. While the U.S. has seen an increase in accessible and economic shale gas supplies, consumer markets in Asia are mostly reliant on liquefied natural gas shipping. In turn, the liquefaction process increases the overall price for the fuel in countries such as Japan. Due to greater natural gas production through hydraulic fracturing, prices in the U.S. have experienced an overall decline over the last decade or so, falling to 2.4 U.S. dollars per million Btu in 2020. However, natural gas markets around the world experienced price shocks in 2021 as a result of the Russia-Ukraine war. In the United States, average natural gas costs for use in the electric power sector more than doubled in 2021.