Heavy Industries: Advancing American Manufacturing

Current Situation U.S. manufacturers face intense global competition Energy-intensive industries – low profit margins Large capital investments required for new technology development & commercialization Capital stock turnover is slow Severe private under-investment in efficiency R&D Changing workforce must be flexible and information nimble High technical and financial risk inhibit investment in efficient process technology

U.S. manufacturers face intense global competition

Energy-intensive industries – low profit margins

Large capital investments required for new technology development & commercialization

Capital stock turnover is slow

Severe private under-investment in efficiency R&D

Changing workforce must be flexible and information nimble

High technical and financial risk inhibit investment in efficient process technology

Energy- Intensive Industries Computers Pharmaceuticals Communication Equipment Scientific Equipment Manufacturing Avg. Electronics R&D Funding as a % of Net Sales Percent Source: NSF 2002, Research and Development in Industry ] R&D Intensity in Manufacturing 1986-1998 Stone, Clay, & Glass Paper & Products Petroleum Refining Primary Metals

Federal Role in Energy Efficiency in Energy Intensive Industries Department on Energy shows energy is a public policy priority. Federal Role includes Developing technology for efficiency goals Supporting the energy technology infrastructure Encouraging the training of an energy efficient workforce Convening energy intensive industries to adopt efficient technologies Security-energy and military

Department on Energy shows energy is a public policy priority.

Federal Role includes

Developing technology for efficiency goals

Supporting the energy technology infrastructure

Encouraging the training of an energy efficient workforce

Convening energy intensive industries to adopt efficient technologies

Security-energy and military

Energy-Intensive Industries In 1994, ITP implemented an innovative, customer-driven research strategy known as Industries of the Future (IOF). Each industry team develops a vision of its desired future and an associated “technology roadmap” which serves as a framework for guiding collaborative partnerships between ITP and industry. Industry teams: Aluminum Chemicals Forest Products Glass Metal Casting Mining Steel

In 1994, ITP implemented an innovative, customer-driven research strategy known as Industries of the Future (IOF).

Each industry team develops a vision of its desired future and an associated “technology roadmap” which serves as a framework for guiding collaborative partnerships between ITP and industry.

Industry teams: Aluminum Chemicals Forest Products

Glass Metal Casting Mining

Steel

Our Focus: Major Energy-Intensive Industries Sources: EIA 2001, 1998 Manufacturing Energy Consumption Survey; U.S. DOE 2002, Energy and Environmental Profile of the U.S. Mining Industry Energy Consumption (Trillion Btu) Petroleum Chemicals Paper Primary Metals Food Processing NONMETALLIC MINERALS Tobacco/Beverages Furniture Leather Machinery and Computers Wood Transportation Fabricated Metals Textiles/Apparel Plastics/ Rubber Electrical Printing Miscellaneous 1 10 100 1000 10 100 1000 10000 Energy Intensity (Thousand Btu/$ GDP) Energy-Intensive Industries Industrial Energy Intensity vs. Energy Consumption Mining

AMMEX is a partner in a federally funded initiative administered by the U.S. Department of Energy that maximizes technology investment through partnerships in 6 vital high energy-use industries: Aluminum Chemicals Forest Products 4. Glass Metal Casting Steel AMMEX includes other energy partners like ACEEE, State and regional Groups.

AMMEX is a partner in a federally funded initiative administered by the U.S. Department of Energy that maximizes technology investment through partnerships in 6 vital high energy-use industries:

Aluminum

Chemicals

Forest Products

4. Glass

Metal Casting

Steel

AMMEX industries collectively: Consume 75% of energy used by Industry. (or 25% of total energy) Supply 90% of materials vital to our economy Produce $1 trillion in annual shipments Directly employ 3 million people Indirectly provide additional 12 million jobs

AMMEX industries collectively:

Consume 75% of energy used by Industry.

(or 25% of total energy)

Supply 90% of materials vital to our economy

Produce $1 trillion in annual shipments

Directly employ 3 million people

Indirectly provide additional 12 million jobs

ITP Funding Shifts Industry R&D Focus to Energy Cross-cutting projects Process-specific projects Approval cutoff; approved projects to the right Distribution of possible company R&D projects Distribution of possible company energy R&D projects

ITP is a Model Federal Program Represents a modest investment ($80.2 million in FY 2004) Produces measurable benefits addressing key national energy, economic, and security policy goals Utilizes industry sectors to identify technology priorities and compete for demonstration opportunities Encourages significant private and state investment (economically justifiable, environmentally sound), including job creation

Represents a modest investment ($80.2 million in FY 2004)

Produces measurable benefits addressing key national energy, economic, and security policy goals

Utilizes industry sectors to identify technology priorities and compete for demonstration opportunities

Encourages significant private and state investment (economically justifiable, environmentally sound), including job creation

ITP Funding Yields Every federal $1 spent on ITP: Saves $7.06 in annual energy costs Saves1.3 million in annual source BTUs

Every federal $1 spent on ITP:

Saves $7.06 in annual energy costs

Saves1.3 million in annual source BTUs

Emissions Reductions are Equally Significant Total Cumulative Emission Reductions Carbon 22,293,044 metric tons VOCs 14,847,884 metric tons NOx 162,026 metric tons PM 7,561 metric tons SOx 570,591 metric tons

Thanks! Questions? Raymond Monroe 815-455-8240 [email_address]