U.S. Chemical Energy-Efficiency Performance
$751 billion revenue
$26.9 billion energy costs
3.6% energy intensity (costs/revenue)
6.24 quads energy use
294.2 MMtCO2e carbon pollution
Employs over 778,000 workers
5 states account for almost 46% of U.S. chemical manufacturing production—TX, LA, NC, CA and NY.
Annual data for 2008
The U.S. chemical industry made substantial progress in improving its energy efficiency in response to the Middle East oil crises' impact on energy supplies—and reduced energy use by 40% per unit of output between 1974 and 1986.
Since then, the U.S. chemical industry has only made modest efficiency gains. The IEA estimated the difference between current energy use and energy use using "best practice technology" in producing products representing 95% of energy use in the chemical industry. While acknowledging more data and analysis is needed, the results are suggestive nonetheless—the U.S.’s gap between current energy use and "best practice technology" is almost 30%, well behind Germany (9.8%), Japan (10%), France (11%), India (15.8%), Brazil (17.2%), and China (20.5%).
The good news for the U.S. chemical industry is that McKinsey and other studies show that the industry has many more energy-efficiency opportunities available today that can pay for themselves. (See Industry-wide Savings)
Chemicals Manufacturing Process
The chemical manufacturing industry transforms organic (e.g., oil and natural gas) and inorganic (e.g., metals, air, and water) raw materials into a range of products. The chemical manufacturing industry transforms organic (e.g., oil and natural gas) and inorganic (e.g., metals, air, and water) raw materials into more than 70,000 diverse products.
U.S. chemical industry energy use includes both the energy within feedstocks (e.g., oil, natural gas, and other petrochemicals) that are the "raw materials" used to make chemical products and the "process energy" (including heat and electrical power) used to transform the raw materials into chemical products. The split in energy use is roughly 60% and 40% respectively.
Chemical manufacturing is a complex and diverse process, but it is possible to divide the process into some shared steps, including:
- Supply and preparation of raw materials.
- Breaking down/or synthesizing the raw materials through chemical reactions.
- Separating and refining the crude product stream into the desired product.
Potential Savings for U.S. Chemical Industry
Private, academic and government analyses show that the U.S. chemical manufacturing industry is missing energy-and money-saving opportunities:
- McKinsey and Company concluded that the U.S. chemical manufacturing industry could reduce energy use by 5% in 2020 with commercially available technologies that would provide an estimated internal rate of return of at least 10%.
If the U.S. chemical manufacturing industry seized the economically attractive opportunities identified by McKinsey today, in 2020 it could start saving an estimated $1.3 billion/year.
- National Academy of Sciences estimates that the U.S. chemical industry could cut energy use by as much as 18% by using best practices, state-of-the-art technologies, and investing in developing and deploying new innovative technologies.
If the chemical industry realized these energy savings today, the industry could start saving an estimated $4.9 billion/year in energy costs.
- DOE's Save Energy Now program helps large industrial facilities improve their energy performance. Between 2006-2008, they identified $218 million in energy-saving opportunities at 100 U.S. chemical processing plants—with 74% of these opportunities having a payback period of less than 2 years.
Only $57 million of identified savings have been implemented, leaving more than $161 million/year on the table.
- According to a study by JVP International and Psage Research looking at 44 key chemical products, the U.S. chemical industry could realize substantial energy savings. In the chart at right:
- Current Average is based on American Chemical Council production data.
- State of the Art is using existing best-available-technology as defined by the DOE.
- Practical Minimum is the predicted consumption based on current R&D opportunities.
Potential Savings for Global Chemical Industry
According to McKinsey & Company's landmark Pathways to a Low Carbon Economy, Version 2.0 study, 16% of the chemical sector's global greenhouse gas footprint can be abated using existing technologies at a marginal cost of less than zero.
To reach the full potential for energy efficiency, the U.S. needs to send a long-term market signal, such as carbon caps, to unleash the full energy efficiency potential.
Energy Efficiency Technologies for Chemicals Manufacturing
The chemicals industry converts raw resources into tens of thousands of different products used by consumers and businesses. Significant energy losses occur during the distillation, heating and cooling of these chemicals.
Fortunately, according to McKinsey's Pathways to a Low Carbon Economy and DOE's Chemical Industry Bandwidth Study, low-cost technologies are available to the industry to improve energy efficiency, including:
- Using more efficient motor systems, compressors and other equipment.
- Improving waste heat recycling.
- Optimizing catalysts in chemical reactions to reduce energy use.
- Improving on-site energy management and monitoring.
Find out more about efficiency opportunities available to the chemicals sector:
Real Chemical Companies Saving Real Money
Chemical Manufacturer Cashes in on Energy Waste
The energy-saving opportunities still available to the broader chemical manufacturing industry are exemplified by a project at Solutia Inc. of Greenwood, South Carolina.
This specialized chemical company identified opportunities to reduce leaks and prevent the venting of pressurized air common in the chemical manufacturing process.
As a result of its efforts, Solutia was able to eliminate the use of several compressors, reducing energy costs by over $500,000 each year and preventing 8,000 tons of CO2 emissions from entering the atmosphere.
Source: USDOE, Industrial Technologies Program, Best Practices Technical Case Study: Compressed Air System Optimization Saves Energy and Improves Production at Synthetic Textile Plant, 2001.
Texas Petrochemicals Corporation started saving $2.3 million annually by improving the performance of the steam system at their Houston, TX petrochemical facility. Their investment paid for itself in 3 months.
Full case study [PDF]
Dow Chemical started started saving $1.9 million annually by improving the efficiency of the steam system at their Hahnville, LA petrochemical facility. The $225,000 in improvements paid for itself in just 6 weeks.
Full case study [PDF]
FMC Chemicals Corporation started saving $911,000 annually when they improved the efficiency of two of their boilers at its soda ash mine Green River, WY. The investment paid for itself in 6 weeks.
Full case study [PDF]
PCS Nitrogen, Inc, started saving $420,000 annually when they improved efficiency of a combustion fan on a boiler at their chemical fertilizer plant in Augusta, GA. Their $65,000 investment paid for itself in less than 2 months.
Full case study [PDF]
3M started saving $77,554 annually by making several improvements to the electrical motor systems at their corporate campus research facility. The improvements cost $79,499, which paid for itself in a little over a year.
Full case study [PDF]
