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Energy: The Flat
Glass Industry Is in Peril with Greenhouse Gas (GHG) Emission Regulation Consider this recent press release from Congress. “Today, Congress began debate on a bill that would enact permit costs on flat glass manufacturers that would more than wipe out profits.” The previous release was fiction (sort of), but if it was real would there be an outcry from the flat glass industry? Or would proponents of solar energy in need of large amounts of flat glass stand up for our industry? (I hope so!) Yet, in early June the US Senate debated just such permit costs as part of ‘The Lieberman-Warner America’s Climate Security Act’. With a current slowing economy and high gas prices, the US Senate (and especially its constituents) was in no mood for a ‘knock down drag out’ fight over energy that would mean increased costs for business. However, the issue will be back in 2009. Both remaining candidates for president support greenhouse gas (GHG) regulation. According to the candidates’ campaign positions, Senator John McCain supports a cap-and-trade system that would set limits on greenhouse gas emissions. Under Senator McCain’s plan, GHG emissions will be capped at 60 percent below 1990 Levels by 2050. Senator Barak Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by 80 percent below 1990 levels by 2050. For comparison, The Lieberman-Warner ‘America’s Climate Security Act that is expected to frame the Congressional debate in 2009 proposes a market-based cap-and-trade system to reduce carbon emissions by 65 percent below 1990 levels by 2050. Any cap and trade regime instituted is expected to include an auctioning of GHG emission credits (i.e. permit costs). The cost of these credits will unduly burden high GHG emitting industries such as the flat glass industry (and could wipe out profits). It is important to note that GHG regulation through a cap and trade regime has yet to be successful in Europe, an often cited example for what should happen in the US with regard to GHG regulation. The Washington Post reported in April 2007 that Europe’s program covers 45 percent of the continent's emissions, 10,000 companies and 27 European Union countries. However, “the approach has been a bureaucratic morass with a host of unexpected and costly side effects and a much smaller effect on carbon emissions than planned. And many companies complain that it is unfair.” ‘Europe's Problems Color U.S. Plans to Curb Carbon Gases’; By Steven Mufson; Washington Post Staff Writer; Monday, April 9, 2007; A01 The Pew Center on Global Climate Change reported in May of 2008 that the European Union cap-and-trade system, even after 3 years of development, is still finding it difficult to achieve significant reductions in GHG emissions. The EU effort is showing that economic conditions, such as the high price of natural gas, significantly impact the operation of cap and trade regimes. The EU example certainly demonstrates that the US must tread carefully with regard to GHG regulation in their economic times. Additionally, it appears that it will be years before any GHG reductions will occur under such a regime while the negative economic impacts on businesses may be more immediate. We. Must. Mobilize. The first step we must take is to educate legislative decision makers on the uniqueness of the flat glass production process. GANA is bringing this message directly to Capitol Hill through its Flat Glass Manufacturer Division Climate Change Committee. This committee drafted a set of considerations that will form the basis of the GANA case to energy issue stakeholders. The case for special consideration (Source: GANA Flat Glass Manufacturer Division Climate Change Committee): The flat glass industry is energy intensive. It takes 6-7,000 cu. ft. of natural gas to produce one ton of flat glass. Approximately 5.7 million tons of flat glass will be produced in the United States in 2008 – implying industry-wide consumption of 34-40 billion cu. ft. of natural gas. The industry also uses nearly 2 billion kWh of electricity annually. Despite recent improvements in reducing emissions, the technology to make dramatic further improvements is not on the horizon. Furnace design has been optimized for energy savings and significant further reductions in energy consumption are uncertain. Furnace efficiencies of more than 50% have been achieved on float furnaces, compared to about 30% in the 1970’s. Heat recovery is being explored to improve overall furnace efficiencies. Flat glass is critical to achieving greater energy efficiency in buildings and automobiles. Low emissivity coatings keep heat inside buildings in the winter and reflect solar heat in the summer, dramatically reducing both heating and cooling costs (and related greenhouse gas emissions). Coatings also reduce glare to allow maximum delighting, cutting the need for energy used for interior lighting. Coated auto glass reduces solar heat build-up, making possible a smaller air conditioning unit, reduced engine strain and increased fuel efficiency. Double-paned insulating glass units more than double the thermal efficiency of windows. Flat glass is also vital to the solar power industry. Low-iron flat glass provides a critical top cover for photovoltaic solar collectors. The concentrated solar power (CSP) industry relies on large parabolic mirrors made from flat glass. The GHG debate is just beginning, but GANA and its FGMD Climate Change Committee are poised to make an impact. For more information on GANA and its energy advocacy efforts please visit www.glasswebsite.com. | ||
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By
Bill Yanek, GANA Executive Vice President