Does renewable energy production displace fossil fuel production in the U.S.? A panel data study of fossil fuel–producing U.S. states, 1997–2020

Does renewable energy displace fossil fuels? Recent research finds mixed evidence, highlighting that effects are heterogeneous across contexts. I further explore this question by examining whether renewable energy production displaces fossil fuel production in the 33 fossil fuel–producing states in the U.S. from 1997 to 2020. Using three different approaches (two-way fixed effects regression, half-panel jackknife two-way fixed-effects regression, and the half-panel jackknife test for Granger causality), I find robust evidence that there is not an association between renewable energy production and fossil fuel production at the U.S. state-level. Additional analyses suggest that 96.7% of the variation in fossil fuel production is explained by state fixed effects, indicating that time-invariant state characteristics are much more important to consider.