Energy Conservation is Smart Business
An old report from 1976 stated that U.S. industrial energy use accounted for 37% of the 74 Quad (quadrillion British thermal units) of national consumption, 55% of which came from gas and refined oil products. This Department of Energy paper commented that efficiency of industrial processes typically ranged from 10% for direct heating to as much as 30% in high-efficiency steelmaking and further noted that 30-50% in energy savings was possible.
This started me thinking about the 57.07 Quad of lost U.S. energy from the total of 99.20 Quad generated in 2008 in America. In other words, efficiency improvements can be an enormously underutilized economic-enhancement tool, and that deserves attention in these lean times. This 42.13% overall energy efficiency that America exhibits is not nearly as good as it should or could be.
Industrial energy consumption is still about the same, or 40% of total use. And there are abundant opportunities for savings of: 70-90% in lighting and fan or pump systems; 50% in electric motors; 60% in facility heating, cooling, office equipment or appliances; and, in general, energy savings of about 75% across the board for electricity uses where savings are more than the cost of efficiency improvements.
Finding energy-savings areas is often the trick, plus making and keeping commitments to implement remediation. While energy costs are the second largest operating expense in industrial plants (after raw material inputs), many savings potentials are unrealized due to “embedded operating and management practices” that resist change in spite of cost reductions. This often happens because production is the core activity of manufacturing, and there is not a focus on energy efficiency. Operating and financial personnel experience mental disconnects between capital projects and operating expenses, exacerbated by emphasis on lowest initial cost rather than life-cycle cost. So, emphasis on “plant optimization” can be a way to achieve improved profits without potential risk or adverse impacts on plant integrity and distorting management policy and procedural changes.
Energy-efficiency improvements and conservation can become a common-sense part of business activity without trauma, submission to loony ideas of green and with an eye to cost savings and improved profitability. What this says is that industrial plant optimization – correctly assessed, planned and implemented – has all the benefits that common sense and good business management requires.
To keep the context for readers of this journal, industrial energy use in the U.S. can be grouped, as a portion of total manufacturing uses, as follows: bulk chemical manufacture 14%, feedstock chemical makers 12%, petroleum refining 9%, mining 9%, paper 8%, metal-based durables 8%, construction 6%, steel 6%, food 5%, agriculture 4%, cement 2%, aluminum 2%, glass 1% and all other manufacturing 14%. Readers of this journal are intense energy users per unit of output in the heat-using sector of the economy.
Various industry sectors, through their associations, have established goals for energy-efficiency improvements. But let’s be honest: A publicly stated “feel good” is not the same as real work and performance. The American Iron and Steel Institute states a “member’s policy” of 10% in efficiency improvements by 2012 over 1998 performance. The American Council for an Energy Efficient Economy states objectives to “analyze and promote technology and process innovation for energy efficiency in manufacturing industries.”
We know that the Industrial Heating Equipment Association (IHEA) is and should be quite proactive on these industrial conservation issues. The PHAST program developed by the DOE and IHEA is a very positive step. But there are other ways needed to assist energy-use audits for members and establish industry-wide assessment protocols. The common interest of all Americans is to become more efficient and productive. Waste is a foolish thing to allow when conservation via energy-efficiency improvement is possible.
Conservation and implementing energy-efficient practices are not fads or acts of political correctness; it is smart business. IH