Green and Lean Approaches to
Sustaining the US Industrial Base
Marilyn A. Brown
School of Public Policy
Georgia Institute of Technology
Marilyn.Brown@pubpolicy.gatech.edu
NGA Governors Energy Policy
Advisors Institute
Washington, DC
May 5, 2011
of Liberal Arts
RESEARCH QUESTION
What Federal policies
could motivate industrial
enterprises to expand their
investments in improving
the energy efficiency of
their facilities, processes,
and practices?
2
Industry Accounts for One-Third of
U.S. Energy Consumption
3
The “Energy Efficiency Gap” in Industry
Other Studies
(3-18%) (5-65%) (6-37%) (15-57%) (19-50%)
Potential for Energy Efficiency Improvements in Five Industries in 2020
Nano-info-bio Technologies could
Make Industry much Leaner
Significant improvements are
anticipated in:
– Energy-efficient distillation
through supercomputing
– Novel energy-efficient
separations
– Super-durable materials for
aggressive environments
– Molecular-level control of
catalytic materials
– Self-optimizing sensor systems
– Recovery and use of low-grade
waste heat
Source: Brown, Marilyn. 2005. “Nano-Bio-Info Pathways to Extreme Efficiency,” AAAS Annual
Meeting, Washington, DC, February 21, 2005
Case Studies Illustrate the Economic
Potential for Improved Efficiency
• Dow: Estimates its energy efficiency strategy has led
to $8.6 billion in cost savings and 86 million tons of
avoided CO2 emissions
• DuPont: Estimates its efficiency initiatives saved the
company approximately $2 billion between 1990 and
2000.
• PepsiCo: Saved $100 million and prevented the
release of 0.17 million tons of CO2 from 2006-2008
• Toyota’s North American Energy Management
Organization has reduced energy intensity by 23%
since 2002 and saved $9.2 million in energy costs
since 1999.
Prindle, Bill. 2010. From Shop Floor to Top Floor: Best Business Practices in Energy
Efficiency (Washington, DC: Pew Center) and Scheihing, 2009.
6
Energy Intensity (Thousand Btu/Constant Mill 2000 $)
Changes in Energy Intensity in Six Key US
Industries
50
45
40
35
30
25
20
15
10
5
0
1977
1980
1983
1986
1989
1992
1995
1998
2001
Paper Mfg.
Petroleum and Coal Prod.
Chemical Mfg.
Plastic and Rubber Prod.
Nonmetallic Mineral Mfg.
Primary Metal Prod.
2004
Source: Brown, Cortes, and Cox, 2010
7
Distributed Energy Holds Great
Promise, With Renewables &
Combined Heat and Power
Central Generation
Distributed Generation
Source: Brown, Stovall, and Southworth (2005)
Combined Heat and Power can
Improve System Efficiencies by 30%
Traditional System
Power
Plant
CHP System
ELECTRICITY
CHP
Boiler
Efficiency
4549%
HEAT
Efficiency
7580%
Sources: EPA Fact Sheet: http://www.epa.gov/chp/state-policy/obr_factsheet.html and
Shipley, et al. 2008. Combined Heat and Power: Effective Energy Solutions for a
Sustainable Future (ORNL/TM-2008/224)
Lots of Opportunities for CHP in Industry:
Proposed CHP Plant in Alloy, WV
– Waste heat from silicon
manufacturing could generate 60
MW of electricity.
– 20 of these would produce the
electricity of a new nuclear reactor.
Existing Policies Can Create Barriers:
e.g., Input-Based Emissions Standards
Source: Brown, et al., 2011, Making Industry
Part of the Climate Solution, April.
Seven Synergistic Policy Options
that We’re Studying
Social Benefit-Cost Ratios of Seven
Federal Policy Options
Corporate Sustainability and the Next Generation
of Lean and Green Technologies
• Product line choices are also
important
– A new generation of fuel cells
and batteries for greater savings
in motor vehicles
– Integrated heat pump systems
– Biorefinery process for a next
generation of biofuels
– New plastics that double as
integrated photovoltaic systems
• Corporate sustainability
– Industry is adopting a much
broader view of its energy and
environmental responsibilities
Source: Delamaide, Darrell. 2011.
“Green Trade Wars Heat Up,
energybiz, 8(2) pp. 12-14
Estimated Increased Employment in the
South from EE and RE Policy Scenarios
Study
Additional Jobs in 2020
Additional Jobs in 2030
Energy Efficiency in the South*
380,000
520,000
Renewable Energy in the South**
46,300
152,900
*Brown, Marilyn A., Etan Gumerman, Xiaojing Sun, Youngsun Baek, Joy Wang, Rodrigo
Cortes, and Diran Soumonni. 2010. Energy Efficiency in the South (Atlanta: Southeast
Energy Efficiency Alliance), April, http://www.seealliance.org/programs/se-efficiencystudy.php.
**Marilyn A. Brown, Etan Gumerman, Youngsun Baek, Joy Wang, Cullen Morris, and Yu
Wang. 2011. Renewable Energy in the South (Atlanta: Southeast Energy Efficiency
Alliance), 190 pages, December
(http://www.seealliance.org/PDFs/RENEWABLE%20ENERGY%20IN%20THE%20SOUTH.p
df).
IMPLAN Coefficients
GRP Coefficients
Jobs Coefficients
Regional Purchase Coefficients
16.45
13.86
$1.09
$1.08
94%
86%
5.63
Construction and EE
Equipment
Electricity
$0.98
$1.10
8.43
72%
Natural Gas
(Source: Brown, et al., 2010)
(Source: swifteconomics.com)
75%
All Others
CONCLUSIONS
• The energy-efficiency gap in the U.S. industrial
sector is large
• Policies could help motivate businesses to
focus more of their resources on green and
lean energy systems – preserving jobs in
existing industries
• Advancing product innovation can enable nextgeneration green and clean technologies –
creating new jobs in new industries
• Both approaches are key to sustaining the U.S.
industrial base
17