RELEASE: A Snapshot of Manufacturing Energy Use Across 10 Midwestern States

Manufacturing Share of State GDP in the Midwest, 2010

New data key to unlocking industrial energy efficiency potential in the Midwest

For the first time, new analysis reveals energy use and economic data by subsector for ten Midwestern states, laying the groundwork for increased industrial energy efficiency in the region. Developed by the World Resources Institute (WRI), with the Great Plains Institute, Midwestern Governors Association (MGA), and University of Illinois at Chicago’s Energy Resources Center, the working paper presents manufacturing energy use by subsector for: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, South Dakota, and Wisconsin.

The paper, “Midwest Manufacturing Snapshot: Energy Use and Efficiency Policies,” provides a summary of each state’s current policies to reduce energy-related costs and emissions.

“Our goal is to improve policymakers’ ability in the region to identify opportunities to reduce emissions, increase energy efficiency, and drive economic development,” said James Bradbury, senior associate at WRI and the lead author of the paper. “There is a real appetite for high-quality, detailed information regarding manufacturing energy use, and this paper provides a solid foundation for more informed policy choices.”

The Midwest economy relies on manufacturing more than any other U.S. region, but industry has been hit hard with job losses over the past decade. More recently, the manufacturing sector has been a key driver for creating jobs and reviving the economy. Companies in the region are increasingly looking at energy efficiency to become more productive and profitable, further stimulating economic growth and employment.

According to the paper, the Midwest accounted for 30 percent of total U.S. manufacturing activity in 2010. The paper shows that industrial activity consumes more energy than any other sector in the Midwest. And, for energy-intensive subsectors — such as iron and steel, cement, chemicals, and paperboard manufacturing — energy use can account for up to 16 percent of total costs, which has significant implications for companies’ bottom line.

“State governments are particularly well-positioned to identify and encourage opportunities for industrial energy efficiency investment,” said Jesse Heier, Executive Director of MGA. “This paper will help officials to better understand and identify opportunities for increasing industrial energy efficiency as part of an overall economic development strategy.”

Until now state-level energy use data have not been publicly available in sufficient detail to identify how much energy subsectors are using and where the biggest opportunities are. This paper changes that by presenting detailed manufacturing energy use and economic activity data at the subsector level.

“We are very pleased that a variety of stakeholders are seeing the promise of industrial energy efficiency to both economic growth and environmental sustainability,” says Lola Schoenrich, Program Director, Energy Efficiency and Low-carbon Electricity, the Great Plains Institute. “This paper is a great resource for policy makers, utilities, and businesses in the identification and development of best practices for each state in the region.”

The paper discusses emerging policy trends and presents summaries of manufacturing sector energy-use activity, as well as related policies for each state in the MGA.

The paper represents a new line of analysis by the WRI and provides a foundation for further research on industrial energy efficiency in the Midwest.

Read the full paper, including state-by-state analysis, here: http://www.wri.org/publication/midwest-manufacturing-snapshot.