EIA: U.S. manufacturers have lost flexibility to switch fuels

U.S. manufacturers have lost some of their short-term capability to switch fuels in recent decades ,which has made them more vulnerable to supply shortages, a report by the Energy Information Administration said on Friday.

About 16 percent of natural gas in the United States was used residentially, while the vast majority was used by a variety of industries. The EIA reports, however, that various industries have reduced theri ability to switch fuels based on market concerns. Photo by PublicDomainPictures/Pixabay
About 16 percent of natural gas in the United States was used residentially, while the vast majority was used by a variety of industries. The EIA reports, however, that various industries have reduced theri ability to switch fuels based on market concerns. Photo by PublicDomainPictures/Pixabay

In 1994, as much as 24 percent of U.S. manufacturing plants could take advantage of relative price differences or cope with supplies by switching fuels used in furnaces, boilers or ovens, but two decades later only one in ten factories had switching capacity, the report said.
“Reduced fuel-switching capabilities leave manufacturers less able to respond to changes in regulations and market conditions,” the EIA said.

In the case of natural gas, the most commonly used fuel in manufacturing, consumption rose from 35 percent in 2006 to 39 percent in 2014.

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As much as 28 percent of manufacturing plants that used natural gas in 1994 could switch to other alternatives but by 2014 only 11 percent were switchable, the report added.

Manufacturers moved to natural gas and away from other fossil fuels such as coal and petroleum as natural gas became increasingly available and it made it easier for manufacturers to comply with environmental regulations. As a result, these factors led manufacturers “to discount the value that fuel-switching had provided in earlier years.”

The industries that consume the largest amount of natural gas in the United States in 2014 were food, paper, petroleum and coal products, chemicals and primary metals, the EIA said. Together, these industries accounted for 81 percent of all natural gas consumption and also of total fuel consumption, the report said.

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The paper and food industries, however, show more ability to switch, it said.

In 2017, the U.S. consumed about 27.11 trillion cubic feet of natural gas. About 34 percent of that consumption was by electric power generators, 29 percent of industry, 16 percent by homes and 12 percent for commercial purposes.

Only 0.2 percent of the 2017 natural gas consumption was as vehicle fuel, with the rest for “lease and plant fuel consumption” and pipeline and distribution uses.

ByRenzo Pipoli