Nov/Dec 2005 │ The Aluminum Association │
Aluminum Industry Promotes Energy
Conservation and Supply Policies
The demand for energy of all forms is likely to increase significantly, according to the U.S. Department of Energy’s (DOE’s) Energy Information Administration. By 2025, even with expected dramatic gains in efficiency, the agency forecasts that total energy consumption will increase by 36 percent, petroleum by 39 percent, natural gas by 40 percent, coal by 34 percent, electricity by 49 percent, and renewable energy by 38 percent.
Shortfalls and bottlenecks in energy supplies and infrastructure systems are becoming more evident. The imbalance between energy supply and demand raises the question of how access to energy supplies can be increased and infrastructure systems improved to meet current and future demands.
This issue is of particular significance to the aluminum industry, as energy represents approximately one-third of the total production cost of primary aluminum—with electricity being an essential ingredient in primary aluminum production. While the industry is a large consumer of both natural gas and electricity, the annual expenditure for electricity by the aluminum industry is more than $2 billion. Thus, energy efficiency and energy management are prime objectives for the aluminum industry.
Aluminum Association Works with Alliance for Energy and Economic Growth on Specific Initiatives
The Aluminum Association is working with the Alliance for Energy and Economic Growth in recommending some priority actions for the Congress, the Bush Administration, and states. The group is staging a winter public awareness campaign to encourage wide-scale public and business conservation practices. It will educate homeowners and business operators on the economic benefits of making homes and buildings more energy efficient and on the importance of using transportation fuels efficiently.
As for policy advocacy, we call to incentivize the use of hybrid and other fuel-efficient vehicles; to initiate or expand existing consumer education programs on conservation and wise use of energy; and to facilitate the construction of new electricity-generating capacity to ensure that peak demand can be met and to provide reasonable reserve margins.
The Alliance also calls for the provision of incentives to:
• Increase supply from expanded refinery capacity;
• Expedite the recently enacted permitting process for liquefied natural gas;
• Increase access to onshore and offshore oil and natural gas resources;
• Review regulatory policies and expedite appropriate reforms and approvals to maximize the use and output of remaining energy facilities and infrastructure while damaged facilities are being repaired or rebuilt;
• Expedite permitting and regulatory approvals that are necessary for restoring and rebuilding energy facilities and infrastructure; and
• Make critical energy infrastructure restoration a priority for purposes of federal funds and resources.
The Alliance is also advocating for the expansion and acceleration of tax credits for gasification technology that were included in the 2005 Energy Policy Act; for the institution of tax incentives in a stimulus package to diversify and broaden the nation’s energy infrastructure through the creation of jobs in mining, construction, and manufacturing; and for states to enforce laws against price gouging when it occurs.
