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Alabama's Natural Gas & Economic Future


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Manufacturing Issues
Energy

Manufacture Alabama is working on both price/supply and consumption-side initiatives in response to crucial manufacturing energy challenges. 

One of our major legislative goals for 2006 was achieved with Congressional passage this month of legislation to open 8 million acres in the Gulf of Mexico for new offshore drilling activity.  The legislation will provide Alabama with revenue sharing funds that we hope can be used to finance infrastructure improvements. 

During 2006, we also continued our push for liquefied natural gas (LNG) facilities in Mobile Bay and for other new sources of natural gas needed by manufacturers.

The association also is expanding its involvement with several universities in Alabama on programs to help member companies reduce energy usage in their manufacturing processes. Energy costs and supply volatility have become perhaps the most serious competitive challenge facing manufacturers in Alabama, considerably increasing the threat of further loss of good manufacturing jobs in our state to foreign competitors with significant energy cost advantages. Information about these programs is detailed below.

Industrial Assessment Center at the University of Alabama

In July 2006, the U.S. Department of Energy announced a selection of 26 universities across the country for negotiation of award to set up and operate regional Industrial Assessment Centers (IAC) beginning in 2007.  The University of Alabama (in partnership with Tuskegee) will be host to one of these 26 centers nationwide, joining other universities such as Texas A&M, Georgia Tech, Michigan, and Florida, among others.  The center will employ faculty and students to assist small-to-medium sized American manufacturing plants to use energy more efficiently. It is intended to train young engineers to better understand how the role of energy efficiency and renewable energy can play in manufacturing and industrial processes.

Manufacture Alabama offered a letter of support for the proposal to the U.S. Department of Energy for the Center, and since, we have partnered with the now official Alabama IAC. We will assist the University in identifying high- potential clients. Those clients will receive comprehensive, energy assessments of their operations, performed at no cost. For purposes of the assessments, DOE defines small and medium-sized manufacturers as those with annual energy costs between $100,00 and $2.5 million.

Department of Energy Grant

Because of rising energy prices and global uncertainty, Alabama’s energy office, the Science, Technology and Energy (STE) Division of the Alabama Department of Economic and Community Affairs (ADECA) and the University of Alabama in Huntsville (UAH), in association with the Alabama Technology Network, Manufacture Alabama, and the Alabama College System, have been running since April an Industrial Technologies Program (ITP) for the paper, construction materials, and metals (primary and secondary) industries. They are the three largest energy consuming manufacturing sectors vital to Alabama’s economy.

Paper products alone account for the employment of almost 14,000 citizens and have an annual payroll of over $705 million. The value of paper-related shipments equaled over $6 million in 2000. Primary and secondary metals also have a substantial impact on Alabama’s economy, employing almost 52,000 Alabamians with a payroll exceeding $1.8 billion. The value of shipments from the sector in 2000 was $10.1 billion. The construction materials sector represents a significant industry in Alabama. Although economic data for the sector is not accumulated as it is with paper products and metals, we know that based on the size and the number and distribution of the companies relative to SIC codes, the industry sector is a vital contributor to the state’s economy. Their competitiveness and profitability are jeopardized because they are extremely energy intensive. The projected work plan included the following in order to reduce BTU consumption for the selected group within these sectors:

  • Identified manufacturers in Alabama that are large energy consumers
  • Selected ten companies for this project whose energy bills are in excess of $2 million per year.
  • Conducted energy efficiency training for ten selected companies using EERE/ITP’s qualified specialists and instructors.
  • Conducted energy assessment and continuous improvement assessments of selected companies.

From this, we and UAH think energy savings strategies can be found that ALL manufacturers can apply—UAH and Manufacture Alabama continue to look at opportunities to partner in other such assessment programs.

Application now open for the 2007 round of the department of energy’s industrial technology program energy savings assessments

Energy Savings Assessments are no-cost or cost-shared three-day industrial manufacturing energy system assessments that identify opportunities for large energy and particularly natural gas using facilities to save substantial amounts of energy.  Energy Savings Assessments (ESAs) identify immediate and long-term opportunities to save energy and money in your plant, focusing on steam, process heating, compressed air, fan, or pumping systems.  If your company is selected for an assessment, an ESA Energy Expert will work with you on site to identify savings opportunities.  Your plant's employees will also help gather data, learn about software tools, and perform a system analysis, so they can continue to find energy savings after the assessment.
In 2007, DOE is offering new opportunities for manufacturers to take part in ESAs.  In addition to process heating and steam systems, your plant could be eligible for a no-cost assessment in compressed air, fan, and pumping systems.  You can also expand your options with cost-shared assessments.  We invite you to join us in saving energy-and money-today! The deadline for applications is January 19, 2007.

You can participate in any of these ways:

* You can apply online for an ESA that identifies key opportunities to reduce your plant's energy use and environmental emissions while improving productivity.  If your plant is selected, the assessment will be scheduled in 2007.

* Partner with ITP by cosponsoring assessments, events, and training; linking to the Save Energy Now Web site; and increasing awareness about energy efficiency and cost savings within your plant or with your customers.

* At any time, you can take advantage of the many tools and resources that ITP provides to improve your plant's energy efficiency and bottom line.

For more information, visit the Save Energy Now Web site, www.eere.energy.gov/industry/saveenergynow, or contact the Energy Efficiency and Renewable Energy Information Center at 1-877-337-3463.

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