Amid Soaring Gas Prices, Energy
Efficiency Spells Relief for Manufacturers
Source: GreenBiz.com
WASHINGTON, Nov. 9, 2005 - Today's record-high prices for natural gas
and other fuels are forcing U.S. manufacturers to pursue
energy-efficient technologies and practices. Manufacturers are cutting
their energy waste -- and thereby energy costs -- in an economical and
cost-effective manner, according to the Alliance to Save Energy (ASE).
In fact, says ASE director of industrial programs Christopher Russell,
manufacturers can cost-effectively avoid energy waste equivalent to
about 21% of their total energy use with efficiency measures.
Until today's high fuel prices made energy efficiency such an urgent
need, many manufacturers ignored recommended energy improvements due to
the perceived risks involved or reluctance to make the up-front
investments.
In today's high-cost climate, however, "energy efficiency improvements
look like a bargain compared to fuel bills," Russell notes. "At today's
fuel prices, energy improvements pay for themselves much more quickly
through the savings they generate, while companies that postpone such
improvements continue to bleed cash."
The U.S. Department of Energy's Industrial Assessment Centers offer
examples of energy savings and their financial impacts:
- A surgical instruments manufacturer in Utah could have invested
$2,560 in steam trap improvements in 2002, with a payback of 1.2
years. At today's energy prices, the payback is reduced to 0.8 year.
- A small, Louisiana food processor's 2002 energy assessment
included a $754 investment to insulate process pipes and vessels, with
a 2.5 year payback. In 2005, the payback is accelerated to 1.7 years.
- An Illinois manufacturer of corrugated shipping containers could
have pursued a $70,000 boiler replacement in 2002 with a payback of
5.4 years. Today, the payback is only 3.7 years.
"Companies with an existing energy assessment are already halfway
there," said Chuck Miller, director of solution design with Johnson
Controls, Inc. "Unless you think energy prices are going to fall, the
recommendations that were valid when the assessments were made are even
more valuable now."
The U.S. Department of Energy and ASE provide efficiency guidance:
ASE points out that manufacturers can realize additional business
opportunities from marketing new products and services that actually
reduce consumers' energy burdens. Some examples are Procter & Gamble's
Tide Coldwater laundry detergent that offsets the cost of heating water
and Caterpillar's advanced combustion systems that improve vehicle fuel
economy.
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