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ENERGY INTENSITY IMPROVEMENTS IN STEEL MINIMILLS
Author(s) -
Boyd GALE,
Karlson STEPHEN H.,
Neifer MARK,
Ross MARC
Publication year - 1993
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1993.tb00394.x
Subject(s) - energy intensity , changeover , electricity , steel mill , efficient energy use , recession , agricultural economics , engineering , energy (signal processing) , natural resource economics , operations management , economics , environmental science , macroeconomics , telecommunications , archaeology , transmission (telecommunications) , electrical engineering , statistics , mathematics , history
Over the past 20 years, U.S. steel manufacturing has experienced an episode of creative destruction. Iron‐ore based plants closed, and new electric arc furnace (EAF) plants–the “minimills”–opened. The steel industry is an energy intensive segment of manufacturing, and the changeover causes major change in energy use. The analysis here links a plant‐level database from the Bureau of the Census with publicly available sources and obtains measures of the best practice energy use in minimills. The analysis examines how technical efficiency, vintage, and capacity utilization affect plant‐level electricity use per ton of steel. This measure of electricity use gives a plant's “energy intensity.” Plants in the sample keep operating even during deep recessions, suggesting that energy, e.g., BTU, taxes may fall short of the fullest potential for reducing energy use. During recession, plants actually may continue to operate at lower output rates and higher energy intensities rather than close down. Substantial potential exists for energy improvements of as much as 1 billion kWh per year. New facilities exhibit energy intensity improvement of 6.2 kWh/ton per year. This finding is consistent with engineering estimates. Realizing this potential among all plants would require policies that assist capital turnover.