Exec Aggregate Report 2012

Voluntary
Commitments to
Reduce Industrial
Energy Intensity
Report to Congress
June 30, 2012

United States Department of Energy
Washington, DC 20585

Department of Energy | [June 2012]

Message from the Secretary
I am pleased to present the enclosed Report to Congress on the Voluntary Commitments to
Reduce Industrial Energy Intensity in accordance with the requirements of Section 106 of the
Energy Policy Act of 2005. The report identifies the progress reported to date of voluntary
commitments by industry in partnership with the U.S. Department of Energy to reduce
industrial energy intensity, highlights program accomplishments, and describes the process the
Department undertook to verify a sample of energy savings estimates provided by participating
firms.
Pursuant to statutory requirements, this report is being provided to the following Members of
Congress:
●

The Honorable Joseph R. Biden, Jr.
President of the Senate

●

The Honorable John Boehner
Speaker of the House of Representatives

●

The Honorable Jeff Bingaman
Chairman, Senate Committee on Energy and Natural Resources

●

The Honorable Lisa Murkowski
Ranking Member, Senate Committee on Energy and Natural Resources

●

The Honorable Fred Upton
Chairman, Committee on Energy and Commerce

●

The Honorable Henry A. Waxman
Ranking Member, Committee on Energy and Commerce

If you have any questions or need additional information, please contact me or Mr. Jeff Lane,
Assistant Secretary for Congressional and Intergovernmental Affairs, at (202) 586-5450.
Sincerely,

Steven Chu

Voluntary Commitments to Reduce Industrial Energy Intensity | Page ii

Department of Energy | [June 2012]

Executive Summary
Section 106 of the Energy Policy Act of 2005 (Pub. L. No. 109-58) gives the Secretary of Energy
the authority to enter into voluntary agreements to reduce the energy intensity of production
activities with one or more persons in industrial sectors that consume significant quantities of
primary energy for each unit of physical output. The legislation also specifies that the goal of
these voluntary agreements is a reduction of energy intensity of not less than 2.5% each year
during calendar years 2007 through 2016. The statute further directs the Secretary to submit to
Congress a report not later than each of June 30, 2012, and June 30, 2017, that evaluates the
success of the voluntary agreements, and provides independent verification of a sample of the
energy savings estimates provided by participating firms.
In response to this directive, the U.S. Department of Energy (DOE) in 2009 established a publicprivate partnership program that aims to: (1) encourage companies to set voluntary energy
savings targets, and (2) build capacity within the industrial sector to achieve continuous energy
efficiency improvement. Companies joining the program set a 10-year, 25% energy intensity
improvement goal, establish an energy intensity baseline, develop an energy management plan,
designate an energy manager, and report energy intensity and energy use data to DOE
annually. DOE provides technical assistance to help participating companies meet their goals,
national recognition to publicize their accomplishments, and access to best practices training
taught by technical experts and industrial sector peers.
The program has now grown to include 108 participating companies, representing about 1,400
plants across more than 20 industries. Based on best available data, DOE calculated the
weighted average 2010 energy intensity improvement rate (weighted by baseline year energy
use) for reporting companies to be 2.84%, which exceeds the annual 2.5% per year program
target. Estimated 2010 source energy savings from the reporting companies is about 15 trillion
British thermal units, which is equivalent to about $80 million in cost savings, or $800 million
total, assuming the 2010 savings persist over the 10 years covered by the program. All energy
data provided to DOE are checked for common errors and obvious anomalies, at the same time
a sample of the energy savings estimates is subjected to more rigorous verification. In
accordance with Section 106 of the Energy Policy Act of 2005, this report details the process
and results of the verification process undertaken by DOE.

Voluntary Commitments to Reduce Industrial Energy Intensity | Page iii

Department of Energy | [June 2012]

VOLUNTARY COMMITMENTS TO REDUCE
INDUSTRIAL ENERGY INTENSITY
Table of Contents
I.
II.
III.
IV.
V.
VI.
VII.
VIII.

Legislative Language .........................................................................................................1
Introduction .....................................................................................................................1
Background ......................................................................................................................2
Better Buildings, Better Plants Program Status .................................................................4
Better Buildings, Better Plants Program Partners..............................................................5
Recognition ......................................................................................................................7
Verification Process and Results .......................................................................................8
Conclusion ........................................................................................................................9

Voluntary Commitments to Reduce Industrial Energy Intensity | Page iv

Department of Energy | [June 2012]

This report responds to legislative language set forth in Section 106 of the Energy Policy Act of
2005 (Pub. L. No. 109-58), wherein it is stated:
SEC. 106. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.
(a) DEFINITION OF ENERGY INTENSITY.—In this section, the term ‘‘energy intensity’’
means the primary energy consumed for each unit of physical output in an industrial
process.
(b) VOLUNTARY AGREEMENTS.—The Secretary may enter into voluntary agreements
with one or more persons in industrial sectors that consume significant quantities of
primary energy for each unit of physical output to reduce the energy intensity of the
production activities of the persons.
(c) GOAL.—Voluntary agreements under this section shall have as a goal the reduction
of energy intensity by not less than 2.5 percent each year during the period of calendar
years 2007 through 2016.
(d) RECOGNITION.—The Secretary, in cooperation with other appropriate Federal
agencies, shall develop mechanisms to recognize and publicize the achievements of
participants in voluntary agreements under this section.
(e) TECHNICAL ASSISTANCE.—A person that enters into an agreement under this section
and continues to make a good faith effort to achieve the energy efficiency goals
specified in the agreement shall be eligible to receive from the Secretary a grant or
technical assistance, as appropriate, to assist in the achievement of those goals.
(f) REPORT.—Not later than each of June 30, 2012, and June 30, 2017, the Secretary
shall submit to Congress a report that—
(1) evaluates the success of the voluntary agreements under this section; and
(2) provides independent verification of a sample of the energy savings estimates
provided by participating firms.

In accordance with the provisions of Section 106 of the Energy Policy Act of 2005 the U.S.
Department of Energy (DOE) in 2009 established a voluntary industrial energy savings
partnership program that challenges U.S. manufacturers to reduce their energy intensity
(energy consumed per unit of production) by 25% over 10 years. The goals of the program are
to drive energy savings, and to establish capability within the industrial sector for continuous
energy efficiency improvement. As part of this effort, DOE (1) provides technical resources to
participating companies to help them meet energy reduction goals, (2) supports public
recognition activities to highlight the energy efficiency accomplishments, and (3) provides

Voluntary Commitments to Reduce Industrial Energy Intensity | Page 1

Department of Energy | [June 2012]
participating manufacturers with best practices training taught by technical experts and
industrial sector peers.
When launched in 2009, this program was known as the Save Energy Now LEADER Initiative
(SENL), but in December of 2011, DOE evolved SENL into the Better Buildings, Better Plants
Program and Challenge. In its new form, the program retains the essential goals of SENL, but as
part of the transition, DOE established a new partnership framework that provides
manufacturers with a wider range of opportunities to participate based on their level of
commitment to energy efficiency.

All companies with a U.S. manufacturing presence are eligible to participate in the Better
Buildings, Better Plants Program and the Better Buildings, Better Plants Challenge. The core
requirements of the Better Buildings, Better Plants Program are that companies: set a 10-year
target to improve energy intensity by 25%; establish an energy intensity baseline, which reflects
the current state against which future progress will be measured; develop an energy
management plan consistent with ISO 50001, the newly released international energy
management standard; designate an energy manager; take steps to reduce their energy
intensity; and report energy intensity and energy use data to DOE annually. Manufacturers can
also partner with DOE through the Better Buildings, Better Plants Challenge, which entails
additional commitments that are more fully described below. To help companies achieve their
energy reduction targets, DOE assigns each company a Technical Account Manager (TAM).
TAMs have specific energy efficiency expertise, which allows them to work with the energy
managers of their assigned companies to help establish energy baselines, develop energy
management plans, and identify additional technical support.
This additional technical support has taken various forms, including access to Energy Savings
Assessments (ESAs), hands-on technical training, and energy audits from Industrial Assessment
Centers (IACs). ESAs were available only to large facilities consuming more than 0.5 Trillion
British thermal units (TBtus) of energy per year, but were phased out in December 2011
because a private sector service industry was developed that adequately meets large-industry
needs. In contrast, IAC assessments are reserved for small- and medium-sized manufacturing
plants.
DOE continues to provide technical training to partner companies through In-Plant Trainings
(IPT). Energy experts lead these 3–4 day sessions at partner facilities to train participants on
how to conduct assessments on one or more of the following energy systems: steam, process
heating, compressed air, fans, and pumps. While IPTs are conducted at a single plant, host
facilities increase the reach of these trainings by inviting personnel from other plants within the
company, as well as representatives from their supply chain, and from other companies within
the geographic region to participate. Training is also provided on other topics, including the use
Voluntary Commitments to Reduce Industrial Energy Intensity | Page 2

Department of Energy | [June 2012]
of DOE’s system-focused software decision support tools, development of energy management
systems, and implementation of energy efficiency projects.
Once a year, Better Buildings, Better Plants Program Partners (referred to as “Program
Partners” throughout this report) report their energy efficiency progress to DOE through a
White House Office of Management and Budget-approved information collection form.
Information collected includes companies’ energy baselines, as well as their current-year
energy consumption broken out by fuel type. Program Partners also calculate energy intensity
improvement, both on an annual and cumulative basis (as of their baseline year). Energy
intensity is typically calculated as Btu per pound of product, but alternate metrics are
occasionally accepted, such as Btu per dollar of revenue, especially for companies with diverse
and complex product mixes.
When launched in December 2009, DOE’s voluntary industrial energy efficiency partnership
program was known as SENL. In December 2011, SENL was renamed the Better Buildings,
Better Plants Program for three primary reasons: (1) to provide greater integration of DOE’s
energy efficiency efforts across the commercial and industrial sectors; (2) to align the program
with the Better Buildings Challenge, a national, multi-sector energy efficiency leadership
initiative; and (3) to provide manufacturers with a wider range of opportunities to partner with
DOE based on their level of commitment to energy efficiency. All companies previously
participating under SENL were automatically enrolled in the Better Buildings, Better Plants
Program, but given the opportunity to opt out. Only two companies chose to opt out of the
program. The program continues to be managed by DOE’s Advanced Manufacturing Office
(previously the Industrial Technologies Program).
As part of this transition, DOE launched the Better Buildings, Better Plants Challenge, which is
the industrial component of the broader Better Buildings Challenge, a multi-sector leadership
initiative announced by President Obama in February of 2011. Through the Better Buildings,
Better Plants Challenge, manufacturers have the opportunity to gain higher-level recognition
for exemplary energy efficiency leadership. Challenge Partners set similar energy efficiency
goals as Program Partners, but also pledge enhanced levels of transparency and innovation in
their approach to energy efficiency. Specifically, Challenge Partners commit to:
Set a goal to improve energy efficiency by at least 25% over ten years.
Announce an “implementation model” used to overcome key barriers to energy
efficiency within the corporation.
Conduct a “showcase project” that demonstrates near-term commitment to
energy efficiency within a single facility.
Report and make public on an annual basis corporate-wide energy use and
energy intensity improvement.
Report and make public on a quarterly basis data on implementation models and
showcase projects.

Voluntary Commitments to Reduce Industrial Energy Intensity | Page 3

Department of Energy | [June 2012]
The objective of these activities is to identify and publicize a set of key best practices and
business models organizations across different sectors of the economy have adopted to
overcome persistent barriers to energy efficiency. By leveraging the efforts of leading
organizations, the Better Buildings Challenge is developing “blueprints” other organizations can
adopt, thereby advancing energy efficiency at less cost to the taxpayer.

As of April 2012 there are 108 Program Partners, representing about 1,400 plants. These
companies use about 1,100 TBtus of energy annually, which is about 5% of the total U.S.
manufacturing energy footprint.1 The best available data to evaluate the energy savings
associated with the program comes from 2010. This is the latest year in which a majority of
Program Partners have submitted their annual reports. In 2010, two-thirds of reporting
companies recorded an average annual improvement rate greater than or equal to the 2.5% per
year target.2 The weighted average energy intensity improvement rate for these companies is
about 2.84%, and estimated 2010 primary energy savings is approximately 15 TBtu, 3 which is
equivalent to the amount of primary energy consumed by about 65,000 single-family homes for
a year. 4
DOE’s goal is to grow the Better Buildings, Better Plants Program to include 500 Program
Partners, representing approximately 7,500 plants, and 25% of the U.S. manufacturing energy
footprint, by 2015. If each of these companies meets its 10-year, 25% energy intensity
improvement target, this would result in energy savings of approximately 703 TBtu5, or more
than the total energy consumed by the State of Nevada in 2009. 6

1

The U.S. manufacturing sector as a whole consumed 21,644 Tbtus of primary energy in 2006, according to the
U.S. Energy Information Administration’s 2006 Manufacturing Energy Consumption Survey.
2
The 2.5% annual rate is approximately double the Energy Information Administration’s projected business as
usual rate for the U.S. manufacturing sector.
3
Estimated energy savings in 2010 are calculated by applying the weighted average 2010 energy intensity
improvement rate (minus the 1.2% projected EIA business as usual rate) from the partners that have submitted
annual reports to the sum of the reported baseline energy use from those same reporting companies. In this case,
baseline year energy use for the reporting companies is 908 TBtus, and the 2010 weighted average energy
intensity improvement rate is 2.84%, yielding an estimated 2010 energy savings of about 14.9 TBtus (908 *
(0.0284-0.012) = 14.9 TBtus).
4
Home energy savings equivalence is based on the 2005 Residential Energy Consumption Survey, Table-US9. On
average, single-family homes consume 225.9 million Btu of primary energy annually.
5
This number is calculated by first estimating energy use of the 500 projected partners, which in this case is 25% of
the 2006 MECS estimate for the manufacturing sector as a whole, or 21,644*0.25= 5,411 TBtus. Projected energy
savings are then calculated by applying the 25% energy efficiency target to the estimated energy use, and backing
out the EIA’s business as usual savings: 5,411 * (0.25-0.12) = 703 TBtus.
6
Source: Energy Information Administration, State Energy Data.
http://205.254.135.7/state/seds/sep_sum/html/pdf/sum_use_tx.pdf

Voluntary Commitments to Reduce Industrial Energy Intensity | Page 4

Department of Energy | [June 2012]

The table below lists all 108 Better Buildings, Better Plants Program Partners.
3M
Alcoa
Amcor Rigid Plastics
AT&T
Ball Packaging North America
Bentley Prince Street, Inc.
BIC APP North America
BPM, Inc.
Bradken
Bridgestone Americas
Briggs & Stratton
Brown Printing Company
The Buck Company
Buckeye Technologies, Inc.
CalPortland
Cargill Regional Beef of
Milwaukee
Carlton Forge Works
Carus Chemical Company
Chippewa Valley Ethanol
Company
Cummins, Inc.
Dahlgren & Company, Inc.
Danfoss
Darigold
Davisco Foods
Denison Industries
Didion Milling
The Dow Chemical Company
DSM North America
Duke Manufacturing
Company
Earth2O
Eastman Chemical
Corporation
Eaton Corporation
Eck Industries
Flambeau River Papers
Florida's Natural Growers
Flying Foods Group

General Dynamics Ordnance
and Tactical Systems
General Motors
Goodyear Tire and Rubber
Company, US Tire Plants
Gorell Windows & Doors
Grand River Printing
Graphic Packaging
International
Harrison Steel Castings Co.
Haynes International
HNI Corporation
Holcim (US) Inc.
Huntsman Corporation
Ingersoll Rand
Intel
Johnson & Johnson
JR Simplot
Kenworth Truck Company
Land O’Lakes
Legrand North America
Lockheed Martin
Lufkin Industries, Inc.
Manitowoc Grey Iron Foundry
Mannington Mills
Marquis Energy
McCain Foods USA, Inc.
McQuay International
MeadWestvaco (MWV) –
Specialty Chemicals Division
MedImmune
Metal Industries, Inc.
Mohawk Industries
Navistar International
Corporation
Neenah Foundry
Nissan North America
OMNOVA Solutions, Inc.
Osram Sylvania
Owens Corning

Owens-Illinois, Inc.
Patrick Cudahy
Patriot Foundry & Castings
PepsiCo
PPG Industries
Procter & Gamble
Quad/Graphics, Inc.
Raytheon Corporation
Revstone Castings Fairfield
Roche Diagnostics Operations
RockTenn – Harrison
Saint-Gobain Corporation
Schneider Electric
Serious Materials
Shaw Industries
Sherwin-Williams
The Shredder Company
Solberg Manufacturing, Inc.
Solutia
Sony DADC
Spirax Sarco, Inc.
Steelcase, Inc.
The Step2 Company
Sunoptics Prismatic Skylights
TE Connectivity
Textron, Inc.
Thilmany Papers
ThyssenKrupp Elevators
ThyssenKrupp Waupaca
Toyota Motor Engineering &
Manufacturing North America
Traco
United Technologies
Corporation
Verso Paper Corporation
Volvo Trucks North America
Weyerhaeuser
Whirlpool Corporation
World Kitchen, LLC

Voluntary Commitments to Reduce Industrial Energy Intensity | Page 5

Industries Engaged
Program Partners represent a variety of U.S. industries, with more than 40% representing the
most energy-intensive industries, including chemicals, metals, forest products, and food and
beverage products. The table below provides additional detail on the number of Program
Partners’ by industry classification.
Table 1: Number of Better Buildings, Better Plants Program Partners by Industry Type
Industry
Metals
Chemicals
Food and Beverage
Industrial Machinery
Home Equipment, Furnishings
Motor Vehicles and Parts
Forest and Paper Products
Aerospace and Defense
Packaging, Containers
Construction Materials
Electronics, Electrical Equipment
Publishing, Printing
Semiconductors and Other Electronic Components
Pharmaceuticals
Other
Total

Number of Program Partners
16
13
12
9
7
7
6
5
5
5
5
3
2
2
11
108

Size of Companies and Plant Locations
Company size, as measured by energy use, among Program Partners varies. Of the companies
that have provided confirmed energy use data: 21 are classified as large, using over 10 TBtu of
energy per year; 26 are medium, using between 2 and 10 TBtu; and 27 are small, using less than
2 TBtu. Program Partners have manufacturing facilities located across nearly all 50 states, as
shown in Figure 1 below. The states with the greatest concentration of Program Partners
include California, Ohio, and Pennsylvania.

Department of Energy | [June 2012]
Figure 1: Number of Better Buildings, Better Plants Program Partner Facilities by State

Program Partners have made significant progress toward meeting their energy reduction goals,
and DOE has recognized these accomplishments in several ways. Recognition efforts have
included awarding plaques, issuing recognition letters, speaking at Program Partners’ events,
and publishing case studies that highlight Program Partners’ energy saving accomplishments.
In addition, DOE has organized and sponsored several events over the last two-and-a-half years
that formally recognized Program Partner accomplishments. These included cost-shared energy
management showcases that highlighted energy efficiency successes resulting from companies’
partnership with DOE, signing ceremonies that celebrated companies for making the 10-year,
25% energy intensity improvement commitment, and other forums to discuss successful
strategies to reduce industrial energy consumption.

Voluntary Commitments to Reduce Industrial Energy Intensity | Page 7

Department of Energy | [June 2012]
Other opportunities for recognition have been provided to Program Partners, including the
ability to participate in Web-based best practice sharing events. Between December 2009 and
September 2011, AMO hosted 17 webinars for Better Plants Program Partners on topics related
to overcoming barriers to implementing energy efficiency projects. High-level corporate
executives from Program Partner companies delivered key messages during the webinar series,
utilizing a peer-to-peer format to present information to more than 850 total participants.

Program Partners work closely with their assigned TAMs to compile and report energy
performance data to DOE on an annual basis. TAMs review Program Partners’ annual reports
before they are submitted to DOE, checking for common errors such as failure to convert from
site to source energy or omission of certain fuel sources. TAMs also use their professional
judgment to follow up with companies about any anomalous numbers included within the
reports, such as dramatic year-over-year declines in energy use or double-digit improvements
in energy intensity.
In many cases, companies share internal documentation with the TAMs—these documents
track monthly energy use by plant and by source. Once TAMs are satisfied with the numbers
provided by Program Partners, the annual reports are submitted to DOE and stored in a central
database. As a result of TAM involvement, DOE has a high degree of confidence in the numbers
provided by Program Partners.
In January 2012, DOE initiated a more rigorous process to verify the energy savings estimates
provided by a sample of participating companies. DOE requested and reviewed two years of
raw energy bill data from eight companies―three small, three medium, and two large—and
compared it with the energy data contained in the annual reports submitted to DOE.
In most cases, companies submitted energy bill data for all of the plants participating in the
program. In instances where energy bill data was unavailable from all plants, DOE compared
the available energy bill data to the internal documents used by the companies to compile their
annual reports.
In seven out of eight cases, reported energy use was identical to the energy use recorded in the
companies’ energy bills. The one observed discrepancy was an approximately 4% difference in
the amount of coal use reported by a company to DOE versus the amount recorded in the
company’s energy bills. The coal discrepancy amounts to a little more than a plus or minus 2%
difference in total energy usage reported by this company. Spread out among the sample of
companies that participated in the verification exercise, the coal discrepancy amounts to less
than a quarter of a percent difference between reported and verified energy data. The limited
magnitude of this discrepancy provides confidence that the data presented in the annual
reports is accurate, and that it correctly reflects the progress being made by Program Partners.
Voluntary Commitments to Reduce Industrial Energy Intensity | Page 8

Department of Energy | [June 2012]

Through the Better Buildings, Better Plants Program, DOE is successfully implementing Section
106 of the Energy Policy Act of 2005. The program supports voluntary agreements between
DOE and manufacturing companies to reduce energy intensity by at least 2.5% annually. The
accomplishments of Program Partners are regularly recognized and publicized, and DOE has
provided technical support, as appropriate, to help these companies achieve program goals.
DOE plans to continue to grow the Better Buildings, Better Plants Program over time to drive
additional energy savings and build greater capacity for energy efficiency improvement within
the manufacturing sector. Additionally, DOE intends to leverage the activities of its Better
Buildings, Better Plants Challenge Partners to publicize successful energy efficiency
implementation models that U.S. manufacturers can adopt.

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