The chemical industry is an integral component of the U.S economy, converting various raw materials into thousands of diverse products. Many small to medium-sized firms comprise the industry, and are concentrated in areas abundant with other manufacturing businesses. Along the Gulf Coast, particularly in Texas and Louisiana, chemical plants are located near petroleum and natural gas production centers.
According to the U.S. Department of Labor, in 2002 approximately half of the establishments in the industry were located in California, Illinois, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Tennessee, and Texas.
From 1997 to 2004 the chemicals sector showed economic growth in terms of value added and total value of shipments. However, the number of plants has declined, as has employment. High energy prices, especially natural gas prices, have been a contributing factor to domestic declines, with companies looking to shift production and investment to operations overseas, particularly in the commodity chemicals segment of the industry.1
Chemicals are generally classified into two groups:
Commodity Chemicals
Manufacturers produce large quantities of basic and relatively inexpensive compounds in large plants, often built specifically to make one chemical. Since they make essentially equivalent products for general use in everyday consumer goods, sales are typically driven by price. Controlling production costs is crucial, which provides an incentive for energy efficiency improvements like installing a CHP system. At the same time, commodity plants often run continuously, typically shutting down for only a few weeks a year for maintenance. Thus, there is often a limited window of opportunity for which energy efficiency-related improvements can be made.
Specialty Batch Chemicals
Manufacturers produce smaller quantities of more expensive chemicals that are used less frequently. Often there is only one or a limited number of suppliers producing a given product. As sales are based on product performance, controlling production costs may be less of a concern than for commodity chemical manufacturers.
Energy Usage and Consumption
Chemical production is highly dependent on natural gas: in 2004 the sector consumed 36 percent of the U.S. natural gas supply both as fuel and process feedstocks.2 In terms of natural gas for fuel use, 55 percent is consumed as boiler fuel (with just over half of that faction used in CHP/cogeneration boilers and the remaining portion used in conventional boilers) and 40 percent use for direct process inputs (primarily process heating). The remaining faction is composed of non-process uses such as facility HVAC and conventional electricity production. Cogeneration and self-generation of electricity are important in this industry, with 31 percent of net electricity consumption produced through cogeneration processes in 2002.1
While energy consumption in this industry has increased in recent years (increasing 13.2 percent from 1994-2008, and 1.75% from 1998 to 2002), the sector has reduced energy consumption for heat and power per unit of output by at least 39 percent between 1974 and 1995.1 Energy intensity (in terms of fuel consumption per dollar value of shipments) decreased approximately 10.5 percent between 1998 and 2002.1
Current Status of CHP in the Gulf Coast Region
The Gulf Coast Region (Louisiana, Oklahoma, and Texas) currently contains over 14 GW of CHP capacity at 71 sites. The main prime movers used at these sites are boiler/steam turbine, combustion turbine and combined cycle technologies. Natural gas is the most popular fuel of choice in this region. The table below shows the breakdown in sites and generating capacity by state.3
Case Studies
Additional case studies can be found here.
Documents
References
ICF International, March 2007