Can Radical Efficiency Revive U.S. Manufacturing?
Both traditional and new U.S. industries will have to increase energy efficiency if the nation is to retain its global position as a leading manufacturer
Industry has long formed the foundation of America’s economy, from before the first Ford Model T factory to the military-industrial complex that grew out of two world wars to the robust economic growth and high-tech innovation that followed. And whereas U.S. manufacturing is experiencing a resurgence, its old foundation—built on cheap fossil fuels and plentiful electricity—is showing cracks. Rising and volatile fuel prices, supply-security concerns and pressures on the environment are wrecking balls thumping away at many of the underpinnings of our country’s key industries—and thus our prosperity.
Fortunately, we can render these wrecking balls harmless through a systematic drive to upgrade industrial energy efficiency. Even with no technology breakthroughs such an effort can, in just over a generation, transform U.S. industry and provide 84 percent more output in 2050 consuming 9 to 13 percent less energy and 41 percent less fossil fuel than it uses today. This scenario, outlined in Reinventing Fire, a book and strategic initiative by Rocky Mountain Institute (RMI), can help U.S. industry build durable competitive advantage and keep jobs from going overseas.
These seem like incredible numbers: Twice today’s efficiency? Output nearly doubled with reduced energy use? The opportunity is so significant because, in spite of efficiency gains over the past decade, plentiful opportunities for energy efficiency remain for industry. The U.S. Department of Energy’s 24 industrial assessment centers, which have offered energy audits for more than 30 years, report that energy savings per recommendation increased by 9 percent between 1985 and 2005. Turning our wastefulness into profit is our biggest opportunity to reinvent fire.
Dramatic efficiency gains in industry can be enabled by transformations occurring in tandem in other key sectors of our economy. For example, the hugely energy-intensive petroleum refining industry will shrink or eventually disappear as vehicles electrify. But efficiency can be doubled in two main ways: applying new technologies to old sectors, and applying old technologies to new sectors.
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