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On November 17, 2009 – The Alliance to Save Energy held a Congressional briefing, Heavy Industries: Advancing American Manufacturing, as a part of the Efficient Enterprises Series on U.S. economic competitiveness and industrial energy efficiency. The expert panel featured representatives from energy-intensive industries – steel, glass, forest products and chemicals – and drew an audience of policymakers, advocates and practitioners.
The discussion, moderated by the Alliance’s V.P., Programs and Development Brian Castelli, centered on the current and future prospects for energy efficiency in the panelists' four respective industries. All agreed on the great potential for energy efficiency projects but acknowledged the formidable barriers that inhibit investment.
“As an industry manager,” said Raymond Monroe of the Steel Founders Society of America, “I have to respond to market changes, I have to invest in product development, and then if I have money left over I will invest in energy efficiency. There needs to be an incentive to invest in energy efficiency right now.” Monroe referenced the thin margins on commodities and the capital-intensive nature of their manufacturing processes – each layered on top of the current recession. Monroe went on to describe the financial landscape of today’s industrial sector and predicted significant capital investment in equipment in the next four to seven years. “Let’s incentivize efficiency properly so we can ensure that the next significant round of investment in manufacturing equipment will be efficient equipment.”
John Cowie from the American Forest and Paper Association also discussed the challenges associated with being a first-mover in an environment filled with emerging technologies. Cowie pointed out that risk and expense are considerably higher in early commercial installs and that a key role of the federal government is to facilitate demonstration projects to accelerate the deployment of market-ready technologies. “Successful demonstration of productive new technologies goes a long way in raising the collective comfort level industry-wide,” said Cowie.
Despite these barriers to energy efficiency, panelists pointed out that solutions are readily available and progress is being made, even without a comprehensive domestic energy strategy. Fred Moore of Dow Chemicals illustrated the criticality of energy to the chemicals industry: worldwide, Dow consumes over 850,000 barrels of oil per day for use as fuel and feedstocks – the equivalent of Australia's total consumption. Nevertheless, Dow has made tremendous efficiency gains over the last two decades, slashing energy intensity by nearly 30 percent since 1990. “Clearly, Dow relies heavily on energy. What we’re looking for is a multi-generational, comprehensive energy policy that we can organize around and operate within,” said Moore.
Regardless of federal policy, industry representatives commended the work of the Department of Energy’s Industrial Technologies Program (DOE ITP) for leveraging public-private collaboration to advance efficiency in the industrial sector. Initiatives mentioned as ‘most valuable’ include cost-sharing incentives, research and development, identifying cross-cutting opportunities, and demonstration projects. Panelists also lauded the program’s direct work with industry and its willingness to pursue industry-defined needs. Michael Greenman, executive director of the Glass Manufacturing Industry Council noted that “DOE ITP has been a convening force that brings industries together and has been vital in driving new, effective energy efficiency technologies.”
For more details on this briefing, please see the presenters’ PowerPoint slides. Check back for more information on the Efficient Enterprises series, as our program will resume in 2010. Please contact Paul Bostrom at pbostrom@ase.org with any questions about the series.
Moderator:
- Brian Castelli, Executive Vice President, Alliance to Save Energy
Presenters:
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