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Big Savings Through Efficiency

Dow is midway through a 20-year efficiency program that aims to cut energy use in half by 2015

by Jeff Johnson
October 9, 2006 | A version of this story appeared in Volume 84, Issue 41

Credit: Dow
An advanced natural-gas-fired steam and power facility at Dow's Plaquemine, La., plant generates 5 million lb of steam per hour and 680 MW of electricity and is 15% more efficient than the power plant it replaced.
Credit: Dow
An advanced natural-gas-fired steam and power facility at Dow's Plaquemine, La., plant generates 5 million lb of steam per hour and 680 MW of electricity and is 15% more efficient than the power plant it replaced.

Between now and 2015, Dow Chemical plans to reduce its global energy consumption by 25%. These planned cuts come on top of a path the company has taken over the past decade in which Dow has reduced its energy consumption by 22%. The end result will be a reduction of half the company's energy consumption in 20 years, Dow executives point out.

These gains figure in production growth and are measured in energy used per pound of product. They are due to energy efficiency improvements, spurred on by a system that rewards sometimes small but always constant energy gains.

Dow justifiably brags that its cumulative energy savings through efficiency since 1994 have totaled 900 trillion Btu. These energy savings over the past decade work out to little more than New Zealand's energy consumption for a year, according to Energy Information Administration figures. Dow says efficiency efforts have saved the company $4.4 billion, equaling about 10% of the company's annual sales and approximating its yearly earnings.

The efficiency projects are small and large: A new cogeneration power plant at Dow's Plaquemine, La., site improved the plant's efficiency of electricity and steam generation by more than 15%; a series of small energy efficiency gains at the company's Cubatao low-density polyethylene plant in Brazil cut steam and power needs by 9% and 2%, respectively.

It is imperative for Dow to focus on energy efficiency, said John Dearborn, Dow global vice president for energy, since expenditures for energy and feedstocks make up about half the company's costs.

Dow operates 165 manufacturing sites in 37 countries and consumes each year about 600 trillion Btu in global operations. U.S. factories consume more than half the global total, or some 340 trillion Btu, according to Dearborn, who spoke last month at a Washington, D.C., symposium organized by the nonprofit Alliance to Save Energy, which honored Dow and other companies for their energy saving efforts.

Credit: Jeff Johnson/C&EN
Credit: Jeff Johnson/C&EN

Government and utility studies have predicted potential energy savings of 40% and more through aggressive efficiency efforts in the industrial sector (C&EN, June 12, page 29; May 14, 2001, page 37).

Dearborn described a global, corporate-wide system that finds wasted energy and implements energy efficiency projects. "It starts with a commitment at the top," he stressed. "Our CEO and top leaders, like me, must stand before our organization and show a commitment."

He said a "network of energy efficiency leaders" around the world is charged with driving energy use reduction, and their work is complemented by a careful and robust energy reporting and accounting system to ensure "intellectual honesty" in determining how the company actually uses energy.

"And finally, more important, money talks, and we link compensation of senior leaders and company leaders in our network of energy efficiency folks to the results they derive," he said.

"We believe it is necessary to set a 'stretch target' and get out there in front and lead your organization to a place that they don't know how to get to," he told C&EN. "It is amazing when innovation takes over and people bring their knowledge and resources to bear. Great things happen. I don't know how else to explain it."

Capital expenditures for energy projects must compete head to head with other production-based capital expenditures, he said, but noted that as energy prices have blasted up, it has become easier to justify energy-based capital expenditures.

He acknowledged that efficiency improvements may get more difficult as the company tries for the second 25%, but he believes they can continue. "The reason is because people get incredibly innovative in the way they go about doing their work, and as you ask them to look for more gains, they end up finding them.

"You just need the belief in the human intellect and the innovation of the human spirit. Now if you set some outlandish goal, you lose credibility. But when we talk about 2 or 3% improvements year upon year, people can feel it. They can imagine reducing the energy input and they go look to see what it will take," Dearborn said.

A sample of Dow's energy projects include:

Almost $1 million in annual energy savings realized at its Seadrift, Texas, polypropylene plant through reduction in process nitrogen and fuel gas use.

Steam production improvements at the firm's Boehlen site in Germany saved $2.3 million annually by improved pressure and flow control and better steam load shedding.

At Dow's Plaquemine site, a comprehensive program to reduce the cost of compressed air and improve efficiency saved the site more than $350,000. The project included installation of condensate traps to eliminate continuous air venting, optimizing compressor production, reducing venting of compressor blow-off-valves, and simply repairing leaks.

At its Stade, Germany, site, operation of an on-site cogeneration power plant was improved, allowing the company to burn greater amounts of hydrogen, a manufacturing byproduct, and buy less natural gas thereby saving the plant over $500,000 in natural gas costs.

The firm's polystyrene business unit reduced energy intensity by 7.4% a year by a host of process improvements identified by the company's network of engineers, resulting in over $1 million savings.

Dow's ethylene dichloride/vinyl chloride monomer business unit initiated projects at Plaquemine and at Freeport, Texas, that reduced fuel consumption of process furnaces and cut natural gas requirements necessary to produce vinyl chloride. Projects also reduced steam consumption by improving steam and distillation systems. Overall energy savings from these projects exceeded $5.8 million.

Dow is most proud of the company's understanding early on of the potential size of the economic value possible through energy efficiency, said Andrew Liveris, Dow chairman and CEO, when speaking at the Alliance to Save Energy's award ceremony.

Liveris noted that when Wall Street analysts heard about Dow's energy efficiency initiative 10 years ago, "one of the first things they asked was, 'How much is it going to cost?'"

"But within a few years," he continued, "Wall Street began to see the bottom-line advantages in investing in sustainability, not just the social benefits."

Liveris estimated that Dow has invested about $1 billion over the past 10 years to improve technologies, mostly for energy projects, and has saved about $5 billion through the investments.

He, too, stressed the need for leadership from the top and the need to mobilize the entire organization.

"As an Australian who loves America and who knows first hand how Americans always rise to a challenge, I am very confident that if we at Dow can commit to a goal of improving energy efficiency by another 25% over the next 10 years, so can the entire country."


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