For the industrial sector, EIA’s analysis and projection efforts generally
have focused on the energy-intensive industries—food, bulk chemicals, refining,
glass, cement, steel, and aluminum—where energy cost averages 4.8 percent
of annual operating cost. Detailed process flows and energy intensity indicators
have been developed for narrowly defined industry groups in the energy-intensive
manufacturing sector. The non-energy-intensive manufacturing industries,
where energy cost averages 1.9 percent of annual operating cost, previously
have received somewhat less attention, however. In AEO2006, energy demand
projections were provided for two broadly aggregated industry groups in
the non-energy-intensive manufacturing sector: metal-based durables and
other non-energy-intensive. In the AEO2006 projections, the two groups
accounted for more than 50 percent of the projected increase in industrial
natural gas consumption from 2004 to 2030.
With the non-energy-intensive industries making up such a significant share
of industrial natural gas demand, a more detailed review of the individual
industries that made up the two groups has been conducted. The review showed
that aggregation within those groups created a bias that contributed strongly
to the projected increase in their natural gas use in AEO2006. The least
energy-intensive component (computers and electronics) had the highest
projected growth rate for value of shipments, whereas the more energy-intensive
components had lower growth projections. To address the disparity, the
AEO2007 projections are based on more narrowly defined subgroups in the
non-energy-intensive manufacturing sector, as shown in Table 8.
Among the non-energy-intensive industry subgroups analyzed for AEO2007,
the computers and electronics group has the lowest energy intensity in
the metal-based durables manufacturing sector (Figure 16) and the highest
projected growth rate (Figure 17). Conversely, fabricated metals has the
highest energy intensity and the lowest projected growth rate in value
of shipments. Consequently, although the projected growth in value of shipments
for metal-based durables as a whole is higher in AEO2007 than it was in
AEO2006, because of the disaggregation, its delivered energy consumption
in 2030 is 15 percent lower in AEO2007 than in AEO2006 (Figure 18), and
its natural gas consumption in 2030 is nearly 200 trillion Btu (19 percent)
lower.
In the “other non-energy-intensive” sector of the non-energy-intensive
manufacturing industries, data limitations and the lack of a dominant energy
user make it more difficult to disaggregate industry subgroups. Based on
EIA’s 2002 MECS data, however, two specific industries—wood products (North
American Industry Classification System [NAICS] 321) and plastics manufacturing
(NAICS 326)—have been separated in the AEO2007 projections, with the remainder
of the other non-energy-intensive sector treated as a third subgroup. Wood
products is of interest because that industry derives 58 percent of the
energy it consumes (209 trillion Btu out of a total 361 trillion Btu in
2002) from biomass in the form of wood waste and residue. In the plastics
manufacturing industry, which produces goods by processing plastic materials
(it does not produce the plastic), one-half of the energy consumed (182
trillion Btu out of a total 344 trillion Btu in 2002) is in the form of
electricity. Together, the two industries account for 4 percent of the
total energy demand for all manufacturing (about 700 trillion Btu) and
7 percent of the value of shipments for all manufacturing.
In addition to the disaggregation described above, EIA has also reexamined
the use of steam as an energy source in the non-energy-intensive manufacturing
industries. For the other non-energy-intensive group, it was found that
steam is used primarily for space heating in buildings rather than in manufacturing
processes. As a result, AEO2007 projects slower growth in its demand for
steam than was projected in AEO2006. In combination, the two revisions described
here result in a significantly lower projection of energy demand for non-energy-intensive
manufacturing in 2030 in the AEO2007 reference case, about 20 percent lower
than was projected in AEO2006 (Figure 19).
Contact: Crawford Honeycutt
Phone: 202-586-1420
E-mail: crawford.honeycutt@eia.doe.gov
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