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Saving Energy Saves Money

Don't miss the benefits of energy efficiency at your plant

By implementing energy-saving projects, you may be able to dramatically reduce your energy consumption—and save millions of dollars. A typical industrial facility can realize savings of up to 25% in process heating systems, up to 20% in steam systems, and as much as 18% in motor systems. These savings can reduce your company's natural gas and electric bills—directly affecting profits.

Alcoa's Lafayette plant in Indiana has saved over $1.5 million annually by reducing natural gas consumption by 260 million cubic feet and electricity consumption by 2,500 MWh.
Ford Motor Company has recorded annual savings of more than $474,500 so far in 2003. An additional $1,008,000 in savings is expected by the year's end.
Rohm and Haas has cut its annual energy bills by $300,000 with savings in natural gas (30,000 MM Btu) and electricity (1,600 MWh).
Smaller manufacturers can also achieve impressive energy and cost savings. AMCAST, with a plant total of 300 employees, conducted a plant-wide assessment of energy-saving opportunities in April 2000, and is now saving $457,325 annually in natural gas (91,464 MM Btu).

Energy efficiency projects deliver additional cost savings by boosting . . .

productivity,
plant reliability (avoided downtime),
emissions compliance,
workplace safety, and
worker morale.

The manufacturing sector is the nation's largest user of natural gas, consuming more than a third of all energy used in the United States each year. A modest reduction in industrial use of natural gas or electricity generated with natural gas can therefore have a big impact on national demand.

Natural Gas Use in Industry

End-Use Natural Gas Consumption Pie Chart. Chart shows the industrial sector accounts for 36% of natural gas end use, electric power accounts for 26%, the residential sector accounts for 23%, and the commercial sector accounts for 15% of natural gas end use. Industry uses more natural gas than any other sector of the U.S. economy. Even with the relatively high prices and economic uncertainty of 2001, U.S. industry used approximately 7,360 billion cubic feet (bcf) of natural gas—36% of all U.S. consumption.

Utilities are generating more and more electricity from natural gas because of its clean-burning nature. Demand for natural gas has further increased with the growing number of new homes and their rising seasonal demands for electric heating and cooling. The share of natural gas used to generate electric power jumped from 22% in 1998 to 26% in 2001.

While industry is the least sensitive end-use sector with respect to weather, it may be the most sensitive to price. Overseas competitors often have access to lower-cost natural gas supplies—a particular concern for industries in which energy is a large part of product costs or natural gas is a feedstock. While some industrial and electric power facilities have the ability to switch fuel when prices are volatile, many do not.

Industrial Natural Gas Demand

Within the industrial sector, manufacturing accounts for the vast majority of natural gas use. According to the 1998 Manufacturing Energy Consumption Survey (MECS), just six industries account for 84% of natural gas use in manufacturing (see table below).

Primarily, these industries use natural gas either in boilers to produce process steam or for process heating. In 1998, boilers used about 2,500 bcf of natural gas to produce process steam, while process heating equipment (including melting furnaces and similar equipment) accounted for approximately 3,100 bcf of natural gas consumption.

Direct Natural Gas Consumption (billion cubic feet), 1998
Industry	Total	Process Heating	Boiler Fuel
Chemicals	2,638	769	960
Petroleum Refining	923	601	238
Primary Metals	908	651	131
Forest Products	641	136	419
Food Processing	553	163	332
Nonmetallic Mineral Products	433	368	19
Other Manufacturing	1,135	416	642
Total Manufacturing	7,231	3,104	2,741

Source: U.S. Department of Energy, Energy Information Administration, 1998 Manufacturing Energy Consumption Survey

Roughly 10% of all natural gas consumed in manufacturing was used for feedstock in 1998. The chemical industry uses the most natural gas for this purpose, with nearly half going to the production of agricultural fertilizers. Manufacturers also use natural gas to heat their facilities (about 400 bcf in 1998) and generate electricity (approximately 200 bcf).

Horizontal Bar graph showing that in 1998 and 1994 natural gas was used more heavily for processing (42%) and as boiler fluid (35%) than as feedstock (11%) and for non-processing (10%) purposes

Electricity

Industry is a major user of electricity, accounting for 28% of total electricity demand in 2001 (Energy Information Administration). Of all electricity used by the industrial sector, 17% was generated with natural gas; only coal and nuclear energy contributed larger shares (see chart below). Natural gas is used in largest quantities for electricity generation during the summer months to help meet peak cooling needs. In July and August 2001, for example, the average amount of electricity generated daily from natural gas was about 65% higher than in March and April.
Source: U.S. Department of Energy, Energy Information Administration, Monthly Energy Review, July 2003.

Electricity End Use for 2001 Pie Chart shows industry accounts for 28% of electricity end use, residential accounts for 34%, commercial accounts for 30%, and other accounts for 8% for 2001. Electricity Sources for 2001 Pie Chart shows that in 2001 coal provided 57% of electricity, nuclear 21%, natural gas 17%, hydropower 6%, petroleum 3%, and renewables & other 2%.

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