Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 ....

21
Industrial Energy Consumers of America The Voice of the Industrial Energy Consumers 1155 15 th Street, NW, Suite 500· Washington, D.C. 20005 Telephone 202-223-1420 • Fax 202-530-0659· www.ieca-us.org February 23,2012 The Honorable Ken Salazar Secretary U.S. Department of the Interior 1849 C Street, NW Washington D.C. 20240 Dear Secretary Salazar: On behalf of the Industrial Energy Consumers of America (IECA), we urge you to not introduce new hydraulic fracturing related regulation on federal lands. Western states with federal lands already have regulations in place that protect the environment. New federal regulation is not needed and will slow natural gas and oil production just when it is needed most - impacting manufacturing jobs and competitiveness. Furthermore, gasoline prices are projected to reach $5.00 per gallon this summer. Ample supplies of domestic oil will help to reduce the increases and prevent U.S. economic growth from stalling. The Industrial Energy Consumers of America is a nonpartisan association of leading manufacturing companies with $700 billion in annual sales and with more than 650,000 employees nationwide. IECA membership represents a diverse set of industries including: chemicals, plastiCS, cement, paper, food processing, brick, fertilizer, steel, glass, industrial gases, pharmaceutical, aluminum and brewing. IECA member companies have good reason to be concerned. In the period from 2000 to 2005 natural gas prices doubled and tripled because demand exceeded supply. We remember that the Bureau of Land Management's (BLM) permitting system, heavy with increased bureaucracy and inadequate staffing, resulted in thousands of drilling permit backlogs. Wells did not get drilled, natural gas and oil did not get produced and the manufacturing sector and the economy as a whole suffered. There were plenty of natural gas reserves and the federal government was directly responsible for the failure to allow producers access to the natural gas in order to produce it for us, the consumer. The manufacturing sector lost 3.0 million jobs from 2000 to 2005 and a great number of these jobs were directly related to the high price of natural gas. Thousands of chemical, plastiCS, fertilizer, steel, paper, glass and aluminum manufacturing plants shut down. We cannot and should not let this happen again. In a recent interview you have commented that rules to be proposed by the Department of the Interior will focus on 1I0ne, disclosure, two, well bore integrity and three, what happens with respect to flowback water." Mr. Secretary, states, especially states with federal lands, have done an exceptional job in all three of these areas. It is also important to mention that federal

Transcript of Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 ....

Page 1: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Industrial Energy Consumers of America The Voice of the Industrial Energy Consumers

1155 15th Street NW Suite 500middot Washington DC 20005 Telephone 202-223-1420 bull Fax 202-530-0659middot wwwieca-usorg

February 232012

The Honorable Ken Salazar Secretary US Department of the Interior 1849 C Street NW Washington DC 20240

Dear Secretary Salazar

On behalf of the Industrial Energy Consumers of America (IECA) we urge you to not introduce new hydraulic fracturing related regulation on federal lands Western states with federal lands already have regulations in place that protect the environment New federal regulation is not needed and will slow natural gas and oil production just when it is needed most - impacting manufacturing jobs and competitiveness Furthermore gasoline prices are projected to reach $500 per gallon this summer Ample supplies of domestic oil will help to reduce the increases and prevent US economic growth from stalling

The Industrial Energy Consumers of America is a nonpartisan association of leading manufacturing companies with $700 billion in annual sales and with more than 650000 employees nationwide IECA membership represents a diverse set of industries including chemicals plastiCS cement paper food processing brick fertilizer steel glass industrial gases pharmaceutical aluminum and brewing

IECA member companies have good reason to be concerned In the period from 2000 to 2005 natural gas prices doubled and tripled because demand exceeded supply We remember that the Bureau of Land Managements (BLM) permitting system heavy with increased bureaucracy and inadequate staffing resulted in thousands of drilling permit backlogs Wells did not get drilled natural gas and oil did not get produced and the manufacturing sector and the economy as a whole suffered There were plenty of natural gas reserves and the federal government was directly responsible for the failure to allow producers access to the natural gas in order to produce it for us the consumer

The manufacturing sector lost 30 million jobs from 2000 to 2005 and a great number of these jobs were directly related to the high price of natural gas Thousands of chemical plastiCS fertilizer steel paper glass and aluminum manufacturing plants shut down We cannot and should not let this happen again

In a recent interview you have commented that rules to be proposed by the Department of the Interior will focus on 1I0ne disclosure two well bore integrity and three what happens with respect to flowback water Mr Secretary states especially states with federal lands have done an exceptional job in all three of these areas It is also important to mention that federal

Page 2 Industrial Energy Consumers of America

law already covers water quality and wastewater disposal issues At minimum we urge you to consult with the States and their regulatory agencies with federal lands before advancing new hydraulic fracturing-related regulations

For example Department of the Interior regulations similar to those that exist under the EPAs Underground Injection Control (UIC) Program would be inappropriate given that the UIC rules are designed to keep injected waste in the ground rather than to allow safe oil and gas extraction The result would be unnecessary delays of gas and oil production The draft rules would require filing a hydraulic fracturing fluid disclosure for each well no less than 30 days in advance of operations Once the disclosure form is submitted no changes can be made to the stimulation fluid makeup without resubmittal and the start of a new clock

Clearly these rules would slow down the production of the gas and oil that we need for economic growth Federal revenues from such production would slow as would revenue to the States themselves There are no winners - only losers

As significant consumers of natural gas we support disclosure of fluids used in the hydraulic fracturing process We have reviewed the Groundwater Protection Council and Interstate Oil and Gas Compact Commission national online registry FracFocus (httpfracfocusorg) and believe it to be a superb example of what is needed and demanded by consumers We recommend that the Department of Interior implement FracFocus as the vehicle for monitoring and protecting health and the environment

Since 2000 the manufacturing sector has lost 55 million jobs For the first time in two decades we have the potential for a manufacturing renaissance because of low natural gas prices Low natural gas prices provide a strategic advantage over our non-US competitors and companies are beginning to invest in the US We urge you to not impose regulations that are unnecessary - the consequences are too great

Sincerely

Paul N Cicio President

cc The Honorable Jeff Bingaman The Honorable Lisa Murkowski The Honorable Doc Hastings The Honorable Edward Markey The Honorable Fred Upton The Honorable Henry Waxman

PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT Marnie Satterfield February 23 2012 (202) 223middot1420

msatterfieldieca-usorg

IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on Federal lands

In a letter today to the Secretary of the Interior Ken Salazar Industrial Energy Consumers of America (lECA) raised deep concern over their efforts to introduce new hydraulic fracturing related regulation on federal lands Western states with federal lands already have regulations in place that protect the environment New federal regulation is not needed and will slow natural gas and oil production just when it is needed most - impacting manufacturing jobs and competitiveness

IECA member companies have good reason to be concerned In the period from 2000 to 2005 natural gas prices doubled and tripled because demand exceeded supply We remember that the Bureau of land Managements (BlM) permitting system heavy with increased bureaucracy and inadequate staffing resulted in thousands of drilling permit backlogs Wells did not get drilled natural gas and oil did not get produced and the manufacturing sector and the economy as a whole suffered There were plenty of natural gas reserves to be produced and the federal government was directly responsible for the failure to allow producers access to the natural gas in order to produce it for us the consumer

Since 2000 the manufacturing sector has lost 55 million jobs For the first time in two decades we have the potential for a manufacturing renaissance because of low natural gas prices low natural gas prices provide a strategic advantage over our non-US competitors and companies are beginning to invest in the US We urge Secretary Salazar to not impose regulations that are unnecessary - the consequences are too great

The Industrial Energy Consumers ofAmerica is a nonpartisan association of leading manufacturing companies with $700 billion in annual sales and with more than 650000 employees nationwide It is an organization created to promote the interests of manufacturing companies through research advocacy and collaboration for which the availability use and cost of energy power or feedstock playa significant role in their ability to compete in domestic and world markets IECA membership represents a diverse set

of industries including plastics cement paper food processing brick chemicals fertilizer insulation steel glass industrial gases pharmaceutical aluminum and brewing

Un-necessary Hydraulic Fracturing Regulations

Jeopardizes Manufacturing Jobs and Competitiveness

April 2012

Paul N Cicio President

Industrial Energy Consumers of America

1

Industrial Energy Consumers of America

The Industrial Energy Consumers ofAmerica is an association of leading non-partisan manufacturing companies with $700

billion in annual sales and with more than 750000 employees nationwide

It is an organization created to promote the interests of manufacturing companies for which the availability use and cost of energy power or feedstock~ playa significant role in their ability to compete in domestic and world marlltets

IECA membership represents a diverse set of industries including steel aluminum commodity and specialty chemicals fertilizer paper food processing glass plastics pharmaceutical

2

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 2: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Page 2 Industrial Energy Consumers of America

law already covers water quality and wastewater disposal issues At minimum we urge you to consult with the States and their regulatory agencies with federal lands before advancing new hydraulic fracturing-related regulations

For example Department of the Interior regulations similar to those that exist under the EPAs Underground Injection Control (UIC) Program would be inappropriate given that the UIC rules are designed to keep injected waste in the ground rather than to allow safe oil and gas extraction The result would be unnecessary delays of gas and oil production The draft rules would require filing a hydraulic fracturing fluid disclosure for each well no less than 30 days in advance of operations Once the disclosure form is submitted no changes can be made to the stimulation fluid makeup without resubmittal and the start of a new clock

Clearly these rules would slow down the production of the gas and oil that we need for economic growth Federal revenues from such production would slow as would revenue to the States themselves There are no winners - only losers

As significant consumers of natural gas we support disclosure of fluids used in the hydraulic fracturing process We have reviewed the Groundwater Protection Council and Interstate Oil and Gas Compact Commission national online registry FracFocus (httpfracfocusorg) and believe it to be a superb example of what is needed and demanded by consumers We recommend that the Department of Interior implement FracFocus as the vehicle for monitoring and protecting health and the environment

Since 2000 the manufacturing sector has lost 55 million jobs For the first time in two decades we have the potential for a manufacturing renaissance because of low natural gas prices Low natural gas prices provide a strategic advantage over our non-US competitors and companies are beginning to invest in the US We urge you to not impose regulations that are unnecessary - the consequences are too great

Sincerely

Paul N Cicio President

cc The Honorable Jeff Bingaman The Honorable Lisa Murkowski The Honorable Doc Hastings The Honorable Edward Markey The Honorable Fred Upton The Honorable Henry Waxman

PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT Marnie Satterfield February 23 2012 (202) 223middot1420

msatterfieldieca-usorg

IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on Federal lands

In a letter today to the Secretary of the Interior Ken Salazar Industrial Energy Consumers of America (lECA) raised deep concern over their efforts to introduce new hydraulic fracturing related regulation on federal lands Western states with federal lands already have regulations in place that protect the environment New federal regulation is not needed and will slow natural gas and oil production just when it is needed most - impacting manufacturing jobs and competitiveness

IECA member companies have good reason to be concerned In the period from 2000 to 2005 natural gas prices doubled and tripled because demand exceeded supply We remember that the Bureau of land Managements (BlM) permitting system heavy with increased bureaucracy and inadequate staffing resulted in thousands of drilling permit backlogs Wells did not get drilled natural gas and oil did not get produced and the manufacturing sector and the economy as a whole suffered There were plenty of natural gas reserves to be produced and the federal government was directly responsible for the failure to allow producers access to the natural gas in order to produce it for us the consumer

Since 2000 the manufacturing sector has lost 55 million jobs For the first time in two decades we have the potential for a manufacturing renaissance because of low natural gas prices low natural gas prices provide a strategic advantage over our non-US competitors and companies are beginning to invest in the US We urge Secretary Salazar to not impose regulations that are unnecessary - the consequences are too great

The Industrial Energy Consumers ofAmerica is a nonpartisan association of leading manufacturing companies with $700 billion in annual sales and with more than 650000 employees nationwide It is an organization created to promote the interests of manufacturing companies through research advocacy and collaboration for which the availability use and cost of energy power or feedstock playa significant role in their ability to compete in domestic and world markets IECA membership represents a diverse set

of industries including plastics cement paper food processing brick chemicals fertilizer insulation steel glass industrial gases pharmaceutical aluminum and brewing

Un-necessary Hydraulic Fracturing Regulations

Jeopardizes Manufacturing Jobs and Competitiveness

April 2012

Paul N Cicio President

Industrial Energy Consumers of America

1

Industrial Energy Consumers of America

The Industrial Energy Consumers ofAmerica is an association of leading non-partisan manufacturing companies with $700

billion in annual sales and with more than 750000 employees nationwide

It is an organization created to promote the interests of manufacturing companies for which the availability use and cost of energy power or feedstock~ playa significant role in their ability to compete in domestic and world marlltets

IECA membership represents a diverse set of industries including steel aluminum commodity and specialty chemicals fertilizer paper food processing glass plastics pharmaceutical

2

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 3: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT Marnie Satterfield February 23 2012 (202) 223middot1420

msatterfieldieca-usorg

IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on Federal lands

In a letter today to the Secretary of the Interior Ken Salazar Industrial Energy Consumers of America (lECA) raised deep concern over their efforts to introduce new hydraulic fracturing related regulation on federal lands Western states with federal lands already have regulations in place that protect the environment New federal regulation is not needed and will slow natural gas and oil production just when it is needed most - impacting manufacturing jobs and competitiveness

IECA member companies have good reason to be concerned In the period from 2000 to 2005 natural gas prices doubled and tripled because demand exceeded supply We remember that the Bureau of land Managements (BlM) permitting system heavy with increased bureaucracy and inadequate staffing resulted in thousands of drilling permit backlogs Wells did not get drilled natural gas and oil did not get produced and the manufacturing sector and the economy as a whole suffered There were plenty of natural gas reserves to be produced and the federal government was directly responsible for the failure to allow producers access to the natural gas in order to produce it for us the consumer

Since 2000 the manufacturing sector has lost 55 million jobs For the first time in two decades we have the potential for a manufacturing renaissance because of low natural gas prices low natural gas prices provide a strategic advantage over our non-US competitors and companies are beginning to invest in the US We urge Secretary Salazar to not impose regulations that are unnecessary - the consequences are too great

The Industrial Energy Consumers ofAmerica is a nonpartisan association of leading manufacturing companies with $700 billion in annual sales and with more than 650000 employees nationwide It is an organization created to promote the interests of manufacturing companies through research advocacy and collaboration for which the availability use and cost of energy power or feedstock playa significant role in their ability to compete in domestic and world markets IECA membership represents a diverse set

of industries including plastics cement paper food processing brick chemicals fertilizer insulation steel glass industrial gases pharmaceutical aluminum and brewing

Un-necessary Hydraulic Fracturing Regulations

Jeopardizes Manufacturing Jobs and Competitiveness

April 2012

Paul N Cicio President

Industrial Energy Consumers of America

1

Industrial Energy Consumers of America

The Industrial Energy Consumers ofAmerica is an association of leading non-partisan manufacturing companies with $700

billion in annual sales and with more than 750000 employees nationwide

It is an organization created to promote the interests of manufacturing companies for which the availability use and cost of energy power or feedstock~ playa significant role in their ability to compete in domestic and world marlltets

IECA membership represents a diverse set of industries including steel aluminum commodity and specialty chemicals fertilizer paper food processing glass plastics pharmaceutical

2

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 4: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Un-necessary Hydraulic Fracturing Regulations

Jeopardizes Manufacturing Jobs and Competitiveness

April 2012

Paul N Cicio President

Industrial Energy Consumers of America

1

Industrial Energy Consumers of America

The Industrial Energy Consumers ofAmerica is an association of leading non-partisan manufacturing companies with $700

billion in annual sales and with more than 750000 employees nationwide

It is an organization created to promote the interests of manufacturing companies for which the availability use and cost of energy power or feedstock~ playa significant role in their ability to compete in domestic and world marlltets

IECA membership represents a diverse set of industries including steel aluminum commodity and specialty chemicals fertilizer paper food processing glass plastics pharmaceutical

2

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 5: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Industrial Energy Consumers of America

The Industrial Energy Consumers ofAmerica is an association of leading non-partisan manufacturing companies with $700

billion in annual sales and with more than 750000 employees nationwide

It is an organization created to promote the interests of manufacturing companies for which the availability use and cost of energy power or feedstock~ playa significant role in their ability to compete in domestic and world marlltets

IECA membership represents a diverse set of industries including steel aluminum commodity and specialty chemicals fertilizer paper food processing glass plastics pharmaceutical

2

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 6: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Hydraulic Fracturing Disclosure BLM Rule Making

bull Un-necessary regulating because you can not because it is needed

bull Costly bull Will slow permitting drilling and

production

bull Creates regulatory uncertainty

bull Redundant reporting

4

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 7: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

8lM APD Approvals

8000 -----------------shy

7000

6000

en ~ 5000 +---------~F__----~-- -Colorado 0( ~ Utah o 4000 +--------~------------~ ~ -Wyoming ~ E 3000 +-------I---=----~--____T- - - TOTAL = z

-t-------------a~IIoE_--_T_-

+---------~---~~--

2000 +--------l~-------~----

Year

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 8: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

350

330

-+-I 310ltIJ QJ ~ ~ ~

Q 29 0= U r 0 ~ 270

~--~

250

230

Potential Natural Gas Consumption

Potential Increases in Demand In 2020 (TcO 1 Nine Waterborne Export Facilities 450

2 EPA Utility Regulations - Coal to Gas 200

3 Natural Gas Vehicle Demand 127

4 Expanded Pipeline Exports to Mexico 002

Growth Rate 2000-2010 19 2010-2020 4deg1

EIA Forecast

Total US Natural Gas Consumption

~~~~~~~~~~~~~~~~~~~~~

Sources 1 Waterborne Exports DOE 2 EPA Utility Regulation - Coal to Gas NERA 1012 3 Natural Gas Vehicle Coalition 31312 4 Expanded Pipeline Exports to Mexico Reuters 22712

210

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 9: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

There is a direct relationship between US energy prices and energy

intensive manufacturing competitiveness and jobs

2

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 10: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Lets Not Repeat History Natural Gas Prices Increased 210 from 1999 to 2008 (23yr)

Driven by production constraints

10 18000 Manufacturing Employment

~9 ~ ~ ~ 8

tI 0-4

rJJJ

7~ = ~ u ~t1 6 ~ = rJJ rtS rtS rJJ

_ 0~ = 5 rtS~ ~ E-I 4= ~ ~ ~ z ~ 3

-~ 2 rtS

--0

1

-0

0

1999 2000 2001 2002 2003200420052006200720082009 2010 2011

Source EIA Bureau of Labor Statistics

17000

~ 16000

~

8 --~

15000 sect 8 r t o =

14000 =~ rJJ tj

~ S 13000 ~~

--0

S12000 ~

11= 11000

10000

28

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 11: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

us Total 55 Million Manufacturing Jobs (32) Lost 54905 Facilities Lost (Since 2001)

18000

17000

16000rJj

0

~ = rJj 15000

0= = ~ 14000

-4= rJj

Q 130000 ~

12000

11000 I ----

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source Bureau of Labor Statistics

An Average Loss of 500000 per Year

JODscreafea in 20102011 shy 418000

28

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 12: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Loss of Manufacturing Competitiveness Resulted in About 86 Million Job Losses

+ --

Source NAM based on 2009 data

29

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 13: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Loss of Competitiveness Accelerated Imports by 51 (2000-2011)

Exports Imports

1700

1500

secttrI

1)00 ~ l=1 1100

1iIlshy

900

Loss of competitiveness accelerated imDorts

700

500

~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~ Source Department of Commerce

300

30

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 14: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Manufacturings Multiplier Effect Indirect Economic Activity Generated by $1 of Sector GDP

Manufacturing

Agriculture Forestry Fishing and Hunting

Construction

Transportation and Warehousing

Information

Arts Entertainment Recreation Accomodation and Food Services

Mining

Government

Other Services Except Government

Educational Services Health Care and Social Assistance

Finance Insurance Real Estate Rental and Leasing

Wholesale Trading

Retail Trade

Professional and Business Services

Utilities

I J 1 I I $tmiddot35

1 0middot97

$120

$Pmiddot95

$08~

~ $084

$082

$( middot74

$067

1 $066

$063

$058

$Pmiddot55

1 J

I I

$Pmiddot55

$0p2

Source Bureau of Economic Analysis 2010 Annual Input-Output Tables 15

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 15: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

_ U) -c c 0 E (I) c c gt-0 C)~-- (1)-2c C) w -shy_V)

_ 0 - shy U)

J -c c-

rIj

ra OIJ (

ra ~

= ra = bull

rJjbull ~ ~ 0

~ 0 rf

bull

~ ~

-J ~

~ -J ~

I ~ bull

rJjbull ~ ~ 0

~ 0 rf

bull

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 16: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

-c c 0 E (1)0Co

C-I U) -

0 2 Cgt~

()- )0shy~

J 0 Z

2 N N

2 0 rt

2 ~ rt

VJ rtI

Cj -4 rtI ~ J ~ jJ

rtI ~

iU

Z ~ 0

r1

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 17: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Operating in the US is 20 more expensive as compared to our major trading partners

bull Japan bull Mexico

bull Germany bull China

bull UI( bull Taiwan

bull Canada

bull I(orea

16

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 18: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Energy Price Sensitive Products are Essential for Economic Growth

Building Blocllt Industries

o o

Chemicals Plastics Fertilizer Glass ceramics Steel Aluminum Pulp and Paper Cement Food Processing

Convert to

Commercial amp Consumer Products

o Food Production o Defense industries o Automobiles o Consumer goods o Construction o Medical Supplies o Energy Production o Appliances o Household products o Telecommunication

23

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 19: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Examples of Energy Intensity (Small Energy Price Increases Have Large Competitive Impacts)

II Aluminum 30-35 II Recycled steel 25 II Integrated steel 85 energy and raw materials II Plastics 80 (feedstocllt) II Chemicals varies greatly 15-20 (fuel only) II Paper 10-20 II Glass 20-25 II Fertilizer 80 (feedstocllt) II Food processing 30 II Cement 25-35 II Refining 15-20 (fuel only)

20

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 20: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Energy Intensive Products are Essential to Economic Growth

III The aerospacedefense industry uses steel aluminum plastics and chemicals

III The air transport industry uses steel aluminum plastics and chemicals III The auto and truck industries use steel aluminum plastics chemicals III The beverage industry uses aluminum steel paper glass and plastic III The biotechnology industry uses chemicals III The commercial and home building construction industry uses brick

steel aluminum wood cement and glass III The oil and gas industry uses steel chemicals cement III The chemical industry uses chemicals steel cement and glass III The computer industry uses plastics chemicals and glass III The electrical equipment industry uses steel III The electric and gas utility sector uses steel and cement III The food industry uses fertilizer chemicals plastics and paper

24

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25

Page 21: Industrial Energy Consumers of America of · February 23, 2012 (202) 223·1420 . msatterfield@ieca-us.org "IECA Urges Secretary Salazar to Not Regulate Hydraulic Fracturing on . Federal

Energy Intensive Products are Essential to Economic Growth

II The heavy construction industry uses steel and rubber II The home furnishing industry uses wood glass chemicals II The home appliance industry uses steel aluminum glass and wood II The household products industry uses chemicals plastic paper

glass II The machinery industry uses steel chemicals and plastics II The maritime industry uses steel II The packaging industry uses plastics paper aluminum and steel II The paper forest products industry uses steel and chemicals II The refining industry uses steel chemicals and cement II The pharmaceutical industry uses chemicals glass and steel II Railroads use steel II The toiletriescosmetics industry uses chemicals plastics paper

and glass 25