Green, yellow, and blue fuel nozzles at a gas pump.

Biofuels and Petroleum in Kentucky Today

While petroleum is a small portion of the energy that is produced in the state, it is the most consumed energy source in the state when you account for all petroleum-based products. As the U.S. continues to explore liquid biofuels as an alternative for petroleum, Kentucky has become a large producer of renewable biofuels.


Petroleum Industry at a Glance:

While petroleum accounts for less than 1% of electricity generation in Kentucky, it accounts for a large amount of the state’s energy consumption.

  • Transportation: The vast majority of petroleum products in Kentucky are used to power cars, trucks, and freight.

  • Refined Petroleum Products: These products include gasoline and distillate (diesel), propane and other fuel oil, asphalt, and petrochemicals.

  • Industrial and Chemical Products: Beyond fuel, petroleum derivatives are manufactured into lubricants, plastics, fertilizers, herbicides, pesticides, and pharmaceuticals.

An oil drill illuminated by the sun.

What Are Liquid Biofuels?

  • Liquid biofuels are renewable, liquid energy sources derived from plant materials, agricultural residues, animal fats, and waste oils.

  • While they contribute less than 1% of the state’s electricity generation, Kentucky has become a large biofuel producer, helping reduce reliance on petroleum.

  • Because most of the state’s petroleum is imported from other states, advancing domestic biofuel production from locally grown sources is a major advantage for Kentucky.

How Is Biofuel Produced in Kentucky?

  • Agricultural Feedstocks: Kentucky uses locally grown crops, particularly corn and soybeans, as primary raw materials for biofuel production.

  • Biodiesel: Soybean oil, animal fats, and recycled cooking oils are chemically converted into biodiesel for use in diesel engines.

  • Ethanol: Corn and recovered sugars from beverage and industrial waste are fermented and refined into ethanol, which is primarily blended with gasoline.

  • Waste-to-Fuel: Animal fats, used cooking oils, and industrial food and beverage wastes can be recovered and converted into valuable transportation fuels.

  • Local Processing: Kentucky facilities integrate agriculture, waste recovery, and fuel refining to produce renewable fuels for regional and national markets.

Benefits

  • Reduced greenhouse gas emissions

  • Increased energy security through domestic fuel production

  • Compatible with existing infrastructure (i.e. gasoline)

  • Biofuel production supports economic development

Challenges

  • Competition with food production

  • Requires large land use and can contribute to a loss in biodiversity

  • Low energy density (less bang for your buck compared to petroleum)

  • High production costs

What Does Biofuel Mean for Kentucky?

  • Supports Kentucky Agriculture: Creates new markets for locally grown corn and soybeans used to produce ethanol and biodiesel.

  • Provides Cleaner Transportation Fuels: Ethanol and biodiesel help reduce petroleum use across passenger vehicles, commercial fleets, agricultural equipment, and other transportation sectors.

  • Turns Waste into Energy: Kentucky facilities and researchers are converting waste oils, fats, beverages, and plant biomass into renewable fuels.

  • Advances Sustainable Aviation Fuel:

  • Drives Economic Development: State programs and tax incentives encourage biofuel production, capital investment, job creation, and new markets for Kentucky resources.

Looking Ahead:

Kentucky is exploring many new pathways for advancing biofuels, including incentives and investment opportunities to grow a sustainable aviation fuel (SAF) industry and expand agricultural feedstocks.