12-12-2012, 12:08 PM
Energy Trends in Selected Manufacturing Sectors: Opportunities and Challenges for Environmentally Preferable Energy Outcomes
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Food Manufacturing
Situation Assessment
From 1997 to 2004 the food manufacturing sector showed economic growth in terms of value
added and total value of shipments (see Table 30). Much of the industry’s energy consumption
takes place in the East North Central and West North Central regions.108
While the food-processing sector is typically amongst the largest manufacturing energy
consumers in states where the industry is located, and has the fifth-highest energy consumption
of the sectors considered in this analysis, its energy intensity is relatively low (see Table 16).
Still, energy is an important input cost for the industry, typically ranking third along with capital in
terms of business costs; raw materials and labor are the dominant cost factors.
For food manufacturing, the most important fuels are natural gas, purchased electricity, and
coal.109 According to DOE, approximately 9 percent of the industry’s electricity demand is met
with onsite power systems, with the majority of that electricity (95 percent) produced in
cogenerating units that also produce steam.110
The following eight subsectors consume approximately half of the total energy used by the food
manufacturing industry: wet corn milling; beet sugar; soybean oil mills; malt beverages; meat
packing; canned fruits and vegetables; frozen fruits and vegetables; and bread, cake, and
related goods. It is estimated that 40 percent of the value of processed food is added through
energy-intensive manufacturing. Process heating and cooling systems (steam systems, ovens,
furnaces, and refrigeration units) have the greatest energy requirements in food manufacturing
(over 75 percent of the sector’s energy use) and are necessary to maintain food safety. Motordriven
systems (pumps, fans, conveyors, mixers, grinders, and other process equipment)
represent 12 percent of the sector’s energy use, and facility functions (heat, ventilation, lighting,
etc.) comprise approximately 8 percent.111 The sector also has the largest transportation
demand of the sectors considered in this analysis, comprising more than 20 percent of the
manufactured commodity shipping ton-miles recorded by DOT in 2002 (see Table 11).
Expected Future Trends
In the United States, increasing demand for fresh processed foods by individual consumers and
by HRI (hotel, restaurant, institutional) customers has increased energy consumption by the
food manufacturing industry. Demographically, the increase in two-earner couples, increased
disposable income, and an aging population are all pushing the system to deliver more readyto-
eat or fast-prepared foods. Additionally, if the next wave of food consumption entails more
fresh foods, particularly more fruits and vegetables, energy utilization may increase, since
reducing spoilage will require even more sophisticated and possible lengthy supply chains, coldchain
accuracy, hot house expansions, etc. AGF projects continued economic growth for the
food manufacturing industry through 2020 due to increases in population and disposable
income, and the fact that foreign competition is less of a limiting factor than it is for other
industries.114
Under its reference scenario, CEF projects that energy consumption by the food manufacturing
sector will increase by 19 percent from 1997 to 2020, primarily driven by continued economic
growth in the sector (the value of industry output is assumed to increase at the rate of 1.2
percent per year). Energy intensity (energy consumption per dollar value of output) is expected
to decrease at the slow rate of 0.5 percent per year. Consumption of all fuel types is projected to
increase. No large-scale changes in the sector’s fuel mix are projected, though the projected
minor shift from natural gas to petroleum may be unlikely given the increases in the price of oil
that have occurred since the CEF study was published. The sector will continue to remain
dependent on natural gas. Supporting CEF projections, AGF predicts that overall natural gas
consumption by the food manufacturing industry will increase at 0.4 percent annually through
2020.
Optimal Future Trends
CEF’s advanced energy scenario projects a smaller increase in sector energy consumption (8
percent from 1997 to 2020) than under the business-as-usual scenario (19 percent increase).
According to CEF, cogeneration is expected to play an important role in increasing energy
efficiency in the food manufacturing sector, contributing to a faster decrease in energy intensity
(decline of 0.9 percent per year) than was projected in the reference case (decline of 0.5
percent per year). The effects of increased CHP may also be evident through a slight decline in
purchased electricity (1 percent) in the advanced case, despite the overall trend of increasing
energy consumption. Over the same period, consumption of natural gas and petroleum is
expected to increase by 14 percent and 15 percent, respectively, and coal use is expected to
decline by 16 percent. CEF’s advanced case employs the AEO 1999 HiTech case assumptions
concerning rates of deployment of energy-efficient equipment, and also assumes increased
energy efficiency for boilers and commercial buildings.
Environmental Implications
Under the advanced energy scenario, CEF projects a smaller increase in sector energy
consumption than under its reference case, which is a net gain in terms of energy-related CAP
emissions. The advanced case also predicts a shift from coal to natural gas that does not occur
under the reference case, which would lead to lower CAP emissions at the facility level than are
expected under the business-as-usual conditions—particularly sulfur dioxide and nitrogen
oxides.