OLD STEEL: Can radical efficiency prevent U.S. heavy industry from shutting down, like the Carrie Furnace here in Braddock, PA, once the pride of the U.S. steel industry.
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Editor's note: The following is adapted from the Rocky Mountain Institute's Reinventing Fire: Bold Business Solutions for the New Energy Era.
Industry has long formed the foundation of America's economy, from before the first Ford Model T factory to the military-industrial complex that grew out of two world wars to the robust economic growth and high-tech innovation that followed. And whereas U.S. manufacturing is experiencing a resurgence, its old foundation—built on cheap fossil fuels and plentiful electricity—is showing cracks. Rising and volatile fuel prices, supply-security concerns and pressures on the environment are wrecking balls thumping away at many of the underpinnings of our country's key industries—and thus our prosperity.
Fortunately, we can render these wrecking balls harmless through a systematic drive to upgrade industrial energy efficiency. Even with no technology breakthroughs such an effort can, in just over a generation, transform U.S. industry and provide 84 percent more output in 2050 consuming 9 to 13 percent less energy and 41 percent less fossil fuel than it uses today. This scenario, outlined in Reinventing Fire, a book and strategic initiative by Rocky Mountain Institute (RMI), can help U.S. industry build durable competitive advantage and keep jobs from going overseas.
These seem like incredible numbers: Twice today's efficiency? Output nearly doubled with reduced energy use? The opportunity is so significant because, in spite of efficiency gains over the past decade, plentiful opportunities for energy efficiency remain for industry. The U.S. Department of Energy's 24 industrial assessment centers, which have offered energy audits for more than 30 years, report that energy savings per recommendation increased by 9 percent between 1985 and 2005. Turning our wastefulness into profit is our biggest opportunity to reinvent fire.
Dramatic efficiency gains in industry can be enabled by transformations occurring in tandem in other key sectors of our economy. For example, the hugely energy-intensive petroleum refining industry will shrink or eventually disappear as vehicles electrify. But efficiency can be doubled in two main ways: applying new technologies to old sectors, and applying old technologies to new sectors.
Adding new technologies to old sectors
A well-known success story is the steel industry. Since it recovered from the capacity overhang and devastating mill closures of the 1970s, it has quietly expanded with state-of-the-art facilities. The energy intensity to produce a ton of steel fell 40 percent from 1978 to 2008. This was driven by a new technology well suited to our scrap-rich economy: the share of steel production from electric arc furnaces (EAFs) grew from 25 percent to nearly 60 percent. EAFs recycle steel scrap in an electric furnace to produce new steel, bypassing the energy-intensive, coking coal–powered step of converting iron ore to metallic iron, and then to steel in a conventional blast furnace. Adding EAFs close to scrap sources has also pulled steel recycling rates up to the mid-80 percent range in recent years.
Even the conventional route has a more efficient alternative that is starting to make inroads. Steel industry bellwether Nucor recently broke ground on a new direct reduced iron plant in Louisiana. This innovation replaces coal with natural gas in the iron ore conversion step. If the steel industry continues to adopt new technology, it can help lead the transition outlined in Reinventing Fire.
Some old industries have less positive stories. Pulp and paper is still struggling with declining demand for its core product, a dynamic that stymies investment in new and existing facilities. Paper mills are often net-zero or even net energy producers, so many would ask: Why bother? But pulping typically produces a potentially valuable by-product—black liquor. Gasifying it has the potential to transform the industry, unlocking the opportunity for the pulp and paper producer of the past to become the biorefinery of the future—producing a portfolio of products alongside paper, from renewable electricity to boutique chemicals and bulk biofuels.
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21 Comments
Add CommentRegarding some more thoughts about how to revive manufacturing in America:
Reply | Report Abuse | Link to thisHere is a link to a Wall Street Journal page with two Letters to the Editor on it. My letter, about Buy American, is at the end of the page.
I think you might find it very interesting. Here is the link:
http://online.wsj.com/article/SB10001424052970204909104577235360535654588.html
To add even more perspective to the topic, you might also want to take a look at a poem I wrote called "It used to be made in America." You can see it online at www.itusedtobemadeinamerica.com
For example, the hugely energy-intensive petroleum refining industry will shrink or eventually disappear as vehicles electrify.
Reply | Report Abuse | Link to thisOh dear. Lost me there. Perhaps in the full report they disclose where the energy will come from to manufacture the vehicles & then provide the power for the battery recharging. Same goes for the electric furnaces. Unless they are uttering the forbidden U word, it is all a nonsence.
these blogs are full of not real people the editors load certain rooms with the rhetoric they wish to hear. in the at&t, Verizon phone companies being a threat. they are a national threat because most people use them and the crooked government, crooked police, and all totally corrupt country that was once the united states of American spies own it on citizens and is out to destroy this country and make it communication systems the highest cost with absolutely a useless communication system!
Reply | Report Abuse | Link to thisthe radical new energy system is a bs tactic by the energy barons in this country and around the world because they want you to believe things are changing. well they will never change because the crooks own and run the system. they are just coming up with better more elaborate lies to fool the public while they steal everyone's money at a better faster pace! there is no future! Everyone below a millionaire better get ready to be a slave!
Reply | Report Abuse | Link to thisAmerica happily outsourced manufacturing and the attendant pollution problems in the 80's and 90's.
Reply | Report Abuse | Link to thisNow they want it back again?
Let me correct your "grammar." America's corporate masters were happy to outsource manufacturing jobs not the American people who were too stupid to realize that the pols who went along with this were in the pockets of the oligarchs. You want manufacturing back? Nationalize health care and set a fair exchange rate between us the China. Problem solved. Next.
Reply | Report Abuse | Link to thisFirstly, there is no need to 'regain'..the USA is still the world's leading manufacturing nation...just not of junk.
Reply | Report Abuse | Link to thisHowever, Americans are silly if they believe they have some pre-ordained right to be the world's manufacturing leader and everyone else will stand still.
Get over this need to be 'number 1' and do what can be done best.
Good comments, I am continually amazed at how gullible people are, completely oblivious to the EXTRAORDINARY level of corruption in the US Government. Even third world countries cannot compete with Government Corruption in the US. The corruption is much more subtle and secretive but insidious.
Reply | Report Abuse | Link to thisAnother article from good ole Amory "negawatts" Lovin's - one of the world's most dangerous warming deniers and wrong about just about everything since his malodorous career began.
Reply | Report Abuse | Link to thisWho can be against energy efficiency with Amory's amazing cherry picked examples.
I have one of my own. Changing out an old single glass energy leaking winder for a new energy star - one of Amory's favorites - works out to 20 cents a kwh. Now there's a saving for you when new mass produced nuke power is 3 cents a kwh.
In fact according to a detailed study by According to consulting firm McKinsey US energy needs can be reduced by 20% at a cost of 20 cents a kwh. 7 times the cost of new nukes.
Amory is also a fan of continuing to use coal as a transition to a "negawatts" world.
Wonder what all those low energy third world folks just dying to get a change at burning energy like we do, think of negawatts.
The greatest level of inefficiency is in the form of Wind Turbines. A good example is Ontario, which has 1.9 GW of Wind installed. Politicians have decreed that Wind must get pride-of-place on the grid, so the 13.5 to 19 cents per kwh that Wind gets in Ontario is always guaranteed, whether the Wind is useful or not. Compare this to the latest Nuclear contracts for 6.3 cents per kwh. And the corrupt premier of Ontario is ordering a total of 10.7 GW of Wind Turbines to be added to the IESO Grid, which has a Baseload of 13 GW, Spring/Fall peak demand of 17 GW and 25 GW Summer/Winter Peak Demand. And 13 GW of baseload Hydro & Nuclear.
Reply | Report Abuse | Link to thisSo the Wind most commonly is strongest during Spring, Fall and nighttime when demand is lowest. Typically the Wind is minimum, often Nil, during summer heat waves and winter cold spells, when Grid Demand is max. Net result, Hydro MUST Spill and Nuclear must dump steam or shutdown. A TOTAL LOSS OF ENERGY! ZERO CO2 savings, ZERO cost savings. That's right now, with just 1.9GW of Wind, just wait until the Greenies get their 10.7GW of Wind.
So last Sunday Ontario had to pay $7.8M to Quebec and Ohio to accept surplus Wind Energy that they didn't want. Over $200k for one hour. Plus still pay the 13.5 cents per kwh for the Wind Energy, plus 1 cent Federal, plus other subsidies. And still they had to shutdown Bruce Nuclear unit 8 and throttle back other units for up to 11 hrs, and spill Hydro. Again with zero cost savings and zero emissions savings. Just Incredible - Greenie Madness.
Now if that isn't Inefficiency, I don't know what is. Notice Greenies NEVER discuss the EXTRAORDINARY level of Inefficiency implicit in integrating Wind Energy into the Grid.
Unfortunately, solar assisted factories are on a lot of drawing tables. So are tons of robotics. Renewing manufacturing methods means a lot less workers will be needed in the new age. Think about it, robots working 24/7 without benefits, using the free energy of the sun.
Reply | Report Abuse | Link to thisEven education is going on line using only the best of the best teachers and teaching methods. E-readers and cheap computer tablets will replace thousands of teachers and books. Delete the old and download the new.
In the auto industry, electric cars which last longer, are more efficient, and have way less moving parts will eliminate tons of jobs directly and indirectly. Do a search on how the Ford Focus electric is made.
Installing consumer owned solar rooftops on hundreds of thousands of roofs will eliminate many jobs in the coal, oil, gas and nuclear industries, freeing up thousands of extra consumer spending dollars each year.
Dude, you're dreaming. Robots working 24/7 on Solar Energy? Whatcha you gonna do when the sun don't shine?
Reply | Report Abuse | Link to this"...using the free energy of the sun..."
Yeah, its so free, that's why they have to pay 45-82 cents per kwh for it in Ontario, >50 cents per kwh in Japan, 28-40 cents per kwh in Germany, and so on, very free.
Latest NREL on TOTAL Cost, BEFORE SUBSIDIES of Solar PV in the USA, $7.15 per watt:
http://openpv.nrel.gov/
The price of Solar PV cells has fallen sharply largely due to a Glut on the market, largely due to the Collapse of the Spanish Solar Market, and restraint in installations due to the Economic Recession.
Even $1.50 per watt for Solar PV cells in California. PV Watts for the Very Best site, Tonopah in Nevada, with 2 axis tracking is 2292 AC kwh/yr/kw capacity or 262 watts avg.
So $1.50/.262 = $5.73 per kwavg, at least double including mounting hardware, tracking, inverters, switchgear & transmission lines is over $12 per kw.
Per capital energy consumption in the USA is 96 MWh/yr. So for a family of four, using your $12/kw absolute rock bottom minimum Solar cost that would be a $528,000 investment for each family of four, done every 25 yrs or so, plus O&M & distribution cost, that's just for energy. Most families can't even afford a home that expensive, never mind paying that much for energy. Ridiculous, the economy would collapse before that could happen.
And claiming "...freeing up thousands of extra consumer spending dollars each year..." is just plain DELUSIONAL.
"Changing out an old single glass energy leaking winder for a new energy star - one of Amory's favorites - works out to 20 cents a kwh. Now there's a saving for you when new mass produced nuke power is 3 cents a kwh."
Reply | Report Abuse | Link to thisPlease share with us all the source for these numbers so we can be sure you're not just making them up. These have to be accurate, reputable sources and not Chinese Communist Party propaganda on how easily they can hide the TRUE costs of building their unsafe reactors.
FIVE SECONDS on Google shows your conclusion regarding the McKinsey study is UTTERLY FALSE:
"The research shows that the US economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste—well beyond the $520 billion upfront investment (not including program costs) that would be required."
http://www.mckinsey.com/Client_Service/Electric_Power_and_Natural_Gas/Latest_thinking/Unlocking_energy_efficiency_in_the_US_economy
So, instead of costing "20 cents a[sic] kwh[sic]", these efficiency improvements have a NEGATIVE COST of around $700 BILLION! If I can prove you wrong that quickly, WHY LIE?
"Yeah, its[sic] so free, that's why they have to pay 45-82 cents per kwh for it in Ontario, >50 cents per kwh in Japan, 28-40 cents per kwh in Germany, and so on, very free."
Reply | Report Abuse | Link to thisYeah, because currency appreciation, geography, national and local economic conditions and FRICKIN' TSUNAMIS have NOTHING to do with power prices, right?
"The price of Solar PV cells has fallen sharply largely due to a Glut on the market, largely due to the Collapse of the Spanish Solar Market, and restraint in installations due to the Economic Recession."
BZZZZZ! WRONG!
"Armed with tens of billions in loans from the Chinese government, Chinese solar companies have scaled at a rate unthinkable only a few years ago. At the end of this year, there will likely be 50,000 megawatts (MW) of manufacturing capacity in place around the world, with much of that new capacity being developed in China and other Asian countries. (In the year 2000, there were only 100 MW of production capacity worldwide.)"
http://www.guardian.co.uk/environment/2011/sep/12/how-china-dominates-solar-power
China's production growth is just one reason, while innovation at large industry players outside of China such as First Solar has led to process improvements that have broken the $1 per W threshold.
Your other WAGs about the cost of solar power are just as laughable. Just doubling the cost of a technology you have an agenda against because you feel like it regardless of the facts is par for the course I suppose. Too bad you solar haters NEVER realize that PV generates RETAIL power AT THE POINT OF LOAD and produces PEAK power to boot!
http://thinkprogress.org/wp-content/uploads/2011/06/Screen-shot-2011-06-08-at-3.29.53-PM.png
So, the fact that solar costs 22 cents per kWh to install (right now), but generates A LOT of its output at times when the RETAIL rates are fairly higher doesn't seem to mesh with your delusions concerning PV. Seems like a better deal than breathing coal smoke or having to abandon state-sized chunks of land when a reactor melts down (the industry is averaging 1 meltdown every 10 years!). Oh, and we don't need the Federal Government paying the liability insurance for solar PV like the Price Anderson Act requires for the Nuclear Industry.
"because currency appreciation, geograph..."
Reply | Report Abuse | Link to thisAn idiotic comment, that explains nothing, are you high?
"...BZZZZZ! WRONG!..."
Nope, Buzz - Right. Your own link proves just what I said. China has dumped huge amounts of cash into supporting a rapidly expanding Solar PV output - these factories take many years to build. Suddenly demand drops - you have no choice but to keep full production up or close your factory and take a couple $billion loss. China, can afford to maintain production knowing they will just force foreign competition out of the marketplace. After that happens, they can happily raise prices again.
"...NEVER realize that PV generates RETAIL power AT THE POINT OF LOAD and produces PEAK power..."
Nope, it doesn't. Retail power?!? Yeah, if you're off-grid, otherwise you are using the Grid, which costs a lot, as a giant battery to dump energy into. So how are you paying for that grid by claiming that you are generating retail power? Even worse you ain't paying for the NG fuel guzzling generators and associating peak NG infrastructure necessary to mirror your Solar PV output which DOES NOT match Grid Demand. And also that is just for residential which is the smaller amount of Solar PV installs.
As for your typical Joe "I-just-make-stuff-up" Romm link, absolute fabrication. Incredible deception. The man doesn't have an honest bone in his entire body. First off, that is for EXPENSIVE & less common Tracking Solar PV. But let's check your NREL for ACTUAL Solar 2-axis tracking for Summer in California:
rredc.nrel.gov/solar/calculators/PVWATTS/version1/US/code/pvwattsv1_hr.cgi
Notice, peak summer day, that output is 0%@6am, 14%@7am,56%@8am,100%@1-2pm,56%@5pm,14%@6pm,0%@7pm. Quite different from Joe Romms invented graph. And that is showing OPTIMUM TIME IN OPTIMUM LOCATION not avg time in avg location. So the REAL TRUTH is OCGT fuel guzzling NG power plant starts up in morning, ramps up to follow demand, starts ramping down as Solar PV starts up, shuts down during Solar peak, then starts up again as Solar drops off after 3 pm while Grid Demand is increasing, and continues guzzling fuel until 10 pm when Grid Demand falls off. The public pays for those NG power plants and peaking NG/LNG/Propane infrastructure. And O&M on same. And peak usage fuel price.
"...he fact that solar costs 22 cents per kWh to install..."
Bull. Your latest 2011 NREL avg installed cost for Solar was $7.98/wattpk or $36 per kw for best case tracking PV, 6 to 18X Nuclear for a low-grade unreliable power source.
"The nation is to retain its position as a leading manufacturer", the sentence is well worded, as the US is no longer "The leading manufacturer", a position held by China, but just one the of world's leading manufacturers. Investments in fuel efficiency do help sustain a competitive industry, and also to mitigate the consequences of centuries of wild industrial development, in some places, soil is impregnated of toxic industrial waste products to a deep of more than 10 feet. An important part of the USA economy is in financial trade, and this reminds the situation before the 1929 crack, when there were seven financial operations for each productive one. Conclusion: USA, UK and zyon= the three blind mice.
Reply | Report Abuse | Link to thisCompanies will invest where convincing arguments and engineering analysis point to adequate cost savings. Energy efficiencies, robotics, alternative energy sourcing don't always fulfill ROI requirements that exceed the cost of capital (or frequently, borrowed money). The article implies that gains are achieved both in the short term and long term.
Reply | Report Abuse | Link to thisWhile that is possible with existing methodology and technology, investments by commercial manufacturers in alternative energy sourcing often requires a longer term outlook in the decision making process. i.e. solar PV, even with subsidies, may be more expensive than the traditional source of the local power company, but it may better position the company for future price spikes, power or grid outages, production expansion, etc.
I found the article to be informative and uplifting. I liked it - you could call it promising.
As to the commenter's points on loss of jobs in electrical power production, expanded use of robotics, etc.
Reply | Report Abuse | Link to thisAll I can say is that Unions fought to enable and to ensure that the middle class participated in the benefits of the productivity gains from WWII to the '70's; and the growing size and wealth of the general population drove an increase in demand for items formerly considered luxuries. So the privileged class gained from expanding markets, and also, by the 1950's the middle class began to participate in investing in companies. The GI bill provided for educational gains that promoted upward mobility by the masses.
Also, the hodge-podge system of tariffs we had during those years allowed the broad American population to experience a higher standard of living than the rest of the world. Free, unfettered trade is what is equalizing the standard of living in the US, with China, India, and the countries expected to be the new markets for expanding globalized companies. (US is 300 million person market, EU is 450 million person market, and companies do not want to make a different version of their products for the US than they make for the EU, but they will for the Chinese market or Asian market.)
A rebirth of industry in the US should have a discussion of public policy, jobs, and what kind of a nation we want for people. Do we want labor to be in demand, or surplus?
Do we want upward mobility and opportunity, or class structure with a powerful elite? Do we want dynasties, or incentive and privilege with reasonable limits that prevent successful people from becoming wealthier than Kings and many countries of the world? Companies are hierarchies, not democracies. Do we want companies or governments to have the most impact on our lives? Which should be bigger or more powerful? How much do we want companies and government to be answerable to us as a people, in addition to the investors and campain contributors?
Energy Efficiency is the need of the hour not only for US but for every country.
Reply | Report Abuse | Link to thisDr.A.Jagadeesh Nellore(AP),India
E-mail: anumakonda.jagadeesh@gmail.com
It is always refreshing to read the comments of someone who obviously works in the real world and is knowledgeable of energy systems operations and economy.
Reply | Report Abuse | Link to thisRead "dbtinc"--thanks to him/her for the most sensible comment thus far.
Reply | Report Abuse | Link to thisIn November go to the polls and get rid of the Peabrain Partier deniers. Sue them for their slanders and send them to the breadlines and homeless shelters to join the rest of America. Even before November, initiate a Constitutional amendment banning "personhood" and first Amendment "rights" to corporate entities, and any monetary support for candidates other than a stipend from our taxes. (The only alternative is to indict, try, imprison or fry their CEOs and Boards as criminals, just as most Soth'n states do to FAR MORE INNOCENT genuine human individuals.) Then get a real progressive THIRD PARTY going, with real patriots running for office , not the phonies of the radical right, who are nothing but resuscitated Confederates taking out their resentment for losing after having violently initiated treason back in 1861.