Greening Industrial Facilities: A Sustainable Approach to Addressing Energy Concerns

Abstract

The prices for natural gas and oil-based products have risen significantly in recent years, making it more costly for U.S.-based manufacturers to be profitable and compete globally. A poll taken at a recent meeting of the National Association of Manufacturers (NAM) board of directors revealed that 93 percent of directors from small and medium manufacturing companies believe that higher energy prices are having a negative impact on their bottom line. Furthermore, according to a 2006 report from the National Association of Manufacturers (NAM), the domestic environment for manufacturers is dominated by concerns about rising external costs that make manufacturing from a U.S. base difficult. With the cost of oil at or near historic all-time highs, energy efficiency has quickly moved to top priority when analyzing potential savings in manufacturing facilities. The industrial sector currently accounts for about one-third of all U.S. energy consumption at an annual cost of more than $120 billion. NAM says that external outlays related to energy prices (in addition to taxes, litigation, health care, and regulation) have added 22.4 percent to production costs. In addition, according to one analysis, “deregulation, security concerns, and a fragile transmission infrastructure are increasing energy price volatility, with negative financial impact on some companies. Those that more tightly control and aggressively reduce energy consumption can minimize exposure to such volatility.”