Oct. 2, 2013
AISI: Policy Should Support Energy Self-Sufficiency
Increased energy production in North America is expected to add 1.4 million jobs and create almost $803 billion in revenues by 2030. The Washington-based American Iron and Steel Institute believes the domestic steel industry will be among the biggest beneficiaries of this new opportunity, both as a supplier of material to the sector and a primary consumer of energy.
Though the domestic steel industry has voluntarily reduced its energy intensity by 27 percent since 1990, it remains a substantial consumer of energy each year. Energy is typically 20 percent or more of the cost of making steel.
As major consumers of energy, steel companies are negatively impacted by high fuel prices. Reliable and plentiful sources of energy are essential to the industry’s productivity and international competitiveness, says Thomas Gibson, president of AISI.
In September 2012, the Consumer Energy Alliance released its report, “North America’s New Energy Future: A Roadmap for Energy Self-Sufficiency. If We Choose It.” In its findings, CEA notes that, after several decades of preparation, the United States is finally in a place to substantially increase its energy generation and reduce oil imports. CEA predicts that “while technology will play a leading role in boosting domestic supplies... the real variable in it all is public policy.”
As such, Gibson says, Congress must:
• Promote an abundant and affordable energy supply by fully developing domestic natural gas, oil, coal and nuclear power resources, including, harnessing the energy and economic benefits of natural gas from shale formations.
• Approve the Keystone XL Pipeline without further delay.
• Ensure that federal regulations do not unilaterally raise the cost of all domestic energy sources. Several EPA regulations of the utility sector, including for greenhouse gas emissions, could raise the costs of electricity to large industrial customers like steel while potentially lessening the reliability of the electricity supply. Proposals to subject shale gas drilling to new federal regulations must maximize the potential economic and environmental benefits of this important domestic resource.
“Manufacturing on the whole supports an estimated 17.2 million jobs in the United States. Nearly 12 million Americans are employed directly in manufacturing,” Gibson says. “Greater development of energy resources means greater demand for manufactured goods, including steel. That translates into more jobs, and that’s good for everyone.”