In 2016, I took a job in Saudi Arabia. The reason for going was simple: my industrial energy efficiency consulting business in the United States had dried up. No one was interested. Natural gas prices were at historic lows. U.S. refiners and chemical manufacturers had much more to gain focusing on other opportunities. The Saudis, on the other hand, had recognized exporting their hydrocarbons was better than burning them in-country. That gave me the opportunity to turn a painful business failure into a fascinating three-year stint in the Middle East.
My experience in 2016 is an example of a cycle that has been going on for decades. Attention to energy efficiency rises and falls in corporate priority with the rise and fall of energy prices as well as manufacturing margins. The lives of corporate energy managers and energy-efficiency consultants track those corporate priorities. If energy costs are high and margins are slim, you are the man or woman of the hour, but if times are good and natural gas supplies are booming, no one will return your calls. Bad times and poor prospects for capital spending create a need for new ideas from external consultants, and free up lots of personnel to look for opportunities for more-efficient operations. When times are better, companies reallocate those human resources and consulting dollars to opportunities with higher expected returns.
A well-thought-out energy management program can mitigate this on/off prioritization. A good program identifies opportunities, sets the bar for ongoing performance, and maintains improvements with minimal resources. Otherwise, over time and with reduced scrutiny, efficiencies decline, and relative costs go up. A few years later, the cycle repeats itself and a new team re-learns all the lessons from the last cycle.
My coauthor Beth Jones tells an interesting story that illustrates this phenomenon: Several years ago, a technician received the company’s highest “attaboy” award from its then-president. His achievement: tuning all the company’s huge olefins furnaces and saving millions of dollars per year in energy costs. The president’s comment: “Great job rediscovering what we already knew! Next time, maybe we’ll just punish the people who stopped doing it.” The technician took the comment to heart and wrote a “Furnace Manifesto” to preserve and institutionalize the knowledge. (See: Alan P. Rossiter and Beth P. Jones, “Energy Management and Efficiency for the Process Industries,” pp. 3–24, Wiley-AIChE, 2015.)
Energy efficiency increasingly is being integrated into the drive for decarbonization, which is part of an even larger ESG (environment, social and governance) movement in the process industries, and across industry in general (“Drive Energy Efficiency with Decarbonization,” July 2021). Some evidence exists that this integration has reduced the focus on energy efficiency, rather than increasing it, and contributed to a slowing of improvements in energy intensity in the process industries. Why might this be?
Sustained improvements in energy intensity historically have been relatively slow — 2–3% per year, at best. Other strategies can achieve greater decarbonization much more rapidly with lower capital investment and less effort on the part of refiners and chemical companies. Renewable energy credits (RECs) are a good example. These are certificates that represent the clean energy attributes of renewable electricity. The electric grid transports electricity produced from both renewable and non-renewable energy sources. When “Company A” buys RECs together with electricity from the grid, the “renewable” aspects of the electricity transfer to Company A. This happens without Company A having to install any renewable energy systems at its facilities; it creates a compelling case for companies under pressure to reduce their carbon footprint quickly, overshadowing the undeniable benefits of energy efficiency.
Despite this, it is clear we must stay focused on energy efficiency in plant operations to prevent backsliding, as the “Furnace Manifesto” story illustrates. There is also a compelling case for increased energy efficiency in all new plant designs, as efficiency is cheaper and easier to build in from the start than to implement as an afterthought.
