World Resources Institute WRI

Midwest manufacturing snapshot : energy use and efficiency policies

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The workforce and economies of Midwestern states are more reliant on manufacturing than in any other U.S. region. Like the U.S. as a whole, during the past decade, the Midwest lost one-third of its total manufacturing workforce. With the central focus of state governments on economic development, there is a growing interest in understanding how industrial energy efficiency investments could contribute to regional economic recovery and long-term competitiveness for U.S. manufacturers. However, state-level energy-use data are not currently available from public sources at the level of detail needed to identify which sectors are using how much energy and where.


Manufacturing remains a cornerstone of the U.S. economy, and nowhere is this more evident than in the Midwest. Manufacturers are also significant consumers of energy; yet, manufacturing subsector fuel use data are not available at the state level, which greatly limits the public’s understanding of industrial energy efficiency potential and other related questions of public interest. Given the centrality of manufacturing to the Midwestern economy and energy consumption, policymakers, industry and other interested stakeholders would benefit from more detailed information regarding energy use across all manufacturing sectors.1

The primary purpose of this paper is to enable a constructive dialogue around effective strategies for achieving complementary environmental and economic outcomes in the Midwest. For the first time, this paper estimates manufacturing subsector-specific energy use for the 10 states in the Midwestern Governors Association (MGA).2 Detailed manufacturing energy-use and economic activity data are presented alongside state-by-state policy summaries, giving a snapshot of where energy is being used and current state approaches for reducing energy-related costs and emissions.

Some context for this paper is worth noting at the outset. The year 2011 saw modest economic recovery for U.S. manufacturing, as a whole, after a decade of historic job losses and high energy prices. In 2012, state budgets will likely remain tight and the last of federal Recovery Act funding for state energy efficiency programs will be spent. Many policymakers are prioritizing policies that spur new investments to create jobs and economic development in their states. With these goals in mind, energy efficiency investments offer promising returns, in terms of both economic growth and employment. More productive energy use begets a more productive and efficient economy, now and for decades into the future (Laitner et al., 2012).

This working paper is divided into five main sections. The first section describes national and regional trends in manufacturing energy use and economic activity. The second section describes available public data and our methodology for deriving more detailed state-level manufacturing subsector energy-use data. The third section introduces in greater detail the concept of industrial energy efficiency (EE) and highlights four emerging policy trends. The fourth section profiles the 10 member states of the MGA, including graphics and discussion of state-specific energy use and recent manufacturing trends, as well as high-level summaries of relevant state policies. The final section discusses further work needed to build on the information presented here to more specifically identify policies needed to reduce the energy intensity and increase the cost competitiveness of Midwest manufacturing.

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