Fueling American Industry

How the U.S. industrial Sector is Leading the Way Toward Smarter Energy Management

The industrial sector has produced the material goods and refined fuels required to meet the desires and aspirations of society.  From cars to cardboard, U.S. industries fuel the economy by creating jobs, and generating products of enormous utility. In 2009, industrial shipments were valued at six trillion dollars, or 46.7 percent of GDP.

However, the magnitude of industrial operations has a hidden cost: it requires a prodigious input of material and energy.  In providing millions of services and products, the U.S. industrial sector uses about a quarter of all energy consumed in the country. 

Feedstocks, typically fossil fuels that are embedded in industrial products, further increase total industrial energy consumption. 


Though the use of energy is spread out amongst a remarkable diversity of industrial subsectors, just five subsectors use about half of industry’s total energy requirements.  The top five energy consumers in the U.S. are (in decreasing order):

1.    Refining
2.    Bulk Chemicals
3.    Pulp & Paper
4.    Food, and
5.    Iron & Steel.


Interestingly, though the iron and steel subsector ranks fifth in energy consumption in the U.S., it is a much different story worldwide.

Because developing countries require tons more (pun intended) of steel in new buildings and infrastructure, iron and steel actually ranks as the top industrial energy consumer globally.  As a result, it is an industry whose successes are worth noting.

A Success Story

Iron and steel has a history of adaptation and innovation.  Over the last 40 years alone, this subsector has cut its energy intensity (energy used per ton of product) by half.  This is largely due to transformative changes in the steel making process.
This transformation did not occur at random – it was enabled by increased recycling rates, as well as industry investment in new equipment and R&D.  As a result, the U.S. now has the lowest energy intensity in its steel production, making it globally competitive. This is especially beneficial in an era that sees higher and more volatile fuel prices.


Note: %EAF is Percent Electric Arc Furnace. The EAF process is much more efficient than the Basic Oxygen Furnace (BOF) process, so as the percent of EAF process use goes up, the total energy use in the industry is reduced.

In the coming century, growing concerns over volatile fuel prices and carbon emissions regulations have created new opportunities for innovation.  Instead of relying on coal to reduce iron oxide to metal, the industry and its collaborators world-wide are developing processes that use potentially cleaner fuels—such as natural gas, hydrogen, and electricity—to directly reduce iron. 

Furthermore, the industry is beginning to evaluate ways to curtail growing CO2 emissions,and exploring opportunities to develop industry-specific carbon capture and sequestration (CCS) technologies.

Heeding the Call

Of course, iron and steel companies are not the only ones that are beginning to innovate at a faster pace. There is a loud call to action for all industrial subsectors to take part in effective energy management, and industrial managers are looking to move the energy needle in their favor.

Chemical companies, for instance, are developing new catalysts that require inherently less energy to make its molecules. Refinery scientists are developing membranes that can separate their products without the use of energy-intensive distillation processes. The pulp and paper engineers are looking to ways to get more energy out of the trees they use to process their products.

Reinventing Fire, an initiative and forthcoming book by Rocky Mountain Institute, is outlining the path for industry (as well as other key sectors in the economy) to reduce its energy requirements and transition the U.S. off oil, coal, and ultimately natural gas. 

The opportunities and barriers in the industrial sector will be examined, and potential pathways will be presented with the hope and expectation that business leaders will continue innovating, and lead the way to a more prosperous and sustainable future.