Closer look: Senate committee to complete work on climate change bill in September

Second in a two-part series. See Page 8 of the July/August issue for the first part.

On June 26, the House of Representatives narrowly passed its version of a bill to cut carbon dioxide emissions from 2005 levels by 17 percent by 2020 and 83 percent by 2050, according to a July 9 article in The Washington Post. The leading Senate committee responsible for developing the climate change legislation expects to complete crafting the bill in September, after it gets back from a month-long break.

Like most other energy-intensive industries, the glass and glazing industry is concerned that the measure would increase the cost of its products and hurt production.

“The Climate Change Committee is most concerned with the greenhouse gas emission regulation portions of the American Clean Energy and Security Act,” said Bill Yanek, executive vice president, Glass Association of North America, Topeka, Kan. “The GANA Energy Committee is working to ensure that energy-efficient and solar glazing applications remain part of the renewable energy portion of the act.”

The flat glass industry will support two broad parameters in dealing with GHG regulations, Yanek said. “Most energy used in producing flat glass for windows is saved over the window’s life cycle,” he said. “Climate change measures should recognize the industry’s contributions to reducing emissions of GHGs; and GHG regulations must not disadvantage U.S. flat glass manufacturers with respect to foreign competitors that do not bear the same environmental costs. This would require either extra allocations or border adjustments for imports from countries not enforcing acceptable emissions standards.”

The Environmental Protection Agency is pushing to inventory and potentially regulate greenhouse gas emissions, and GANA is encouraging the EPA to consider flat glass manufacturing as a separate reporting classification due to its unique and energy intensive manufacturing processes, Yanek said. The organization has released a one-sheet document from its Climate Change Committee that outlines viewpoints from the flat glass industry in regards to possible climate change legislation. “Climate change legislation could gravely damage flat glass manufacturers if the concerns in this position paper are unheeded,” he said.

Industry's green contribution should be credited
The contributions made by the glass industry have enormous potential and the industry should be credited for its contribution to green products, such as low-E glass, says Victoria M. Holt, senior vice president, Glass & Fiber Glass, PPG Industries Inc., Pittsburgh. “From high-performance glass that reduces energy consumption for homes, buildings and automobiles, to glass and fiber glass essential to the production of clean wind and solar energy, glass is a quintessential building block of modern, sustainable life,” she says. “It is estimated that buildings in the U.S. consume 70 percent of the electric supply and produce 30 percent of our GHG emissions. This is where the flat glass industry can make a major contribution.”

A PPG research engineer calculated that if all existing buildings and new construction in the U.S. adopted use of the latest glazing advancement, it would save over 2 trillion BTU’s a year or 2 percent of the total U.S. energy consumption, Holt says. “That translates into $38 billion in gas/electric savings to building owners and 123 million tons of CO2 emissions. Even PPG’s low-E production alone could have the effect of reducing CO2 emissions by over 2.6 million tons, reducing 583,000 Kwh and 44,000 therms per year.”

The basis for all of this is an energy modeling done by Architectural Energy Corp. using a prototypical eight-story office building, Holt says.

However, to manufacture that same green glass, GHG emissions are unavoidable, says Yanek, even though the industry has become more energy efficient.

Michael Turnbull, director of international and environmental management, Guardian Industries, Auburn Hills, Mich., agrees. “Over the last 30–40 years, glass manufacturing has become approximately 30–50 percent more energy efficient in melting glass, Turnbull says. “Increasing energy efficiency is a continuous process but major double-digit gains that would be required under a cap and trade program may not be technologically possible.”

“For each ton of glass produced, about one-half ton of greenhouse gasses, primarily CO2, are emitted. About 4.7 million tons of flat glass were produced in the United States in 2007, implying GHG emissions of some 2.3 million tons.”

In 2008, North America produced around 5.7 million tons of glass, Holt says. Using natural gas, the CO2 emission per ton of glass is around .75 tons, she says. “Multiply that by the North American annual production, and you get an annual output of 4.28 million tons of CO2. If the cost of carbon is $10, $20 or $30--my latest check was that CO2 was selling at about 10 Euros [during this downturn]--that means the impact to the U.S. glass industry would range from $28.5 million to $128.4 million per year,” she says. “That’s before factoring in electricity, which varies regionally. That’s a lot of cost. Glassmakers, or the glass distribution chain for that matter, cannot absorb this cost. It will ultimately impact the glass consumer or end user.”

Potential strategies to cut GHG emissions
There are no proven ‘off the shelf’ readily available technologies to capture carbon for placement into long-term storage, i.e., sequestration, in the glass industry. Carbon capture and storage is still in the research, development, and in some very limited cases, scale-up stage for utilities, Turnbull says.

“Credit for reductions under a cap and trade program can be obtained with ‘offsets,’ ” he says. “Offsets can take several forms, but the most common are: wind generation displacing fossil fuel electrical generation, reforestation, and permanently taking cultivated rain forest and/or agricultural land out of production. Offsets can be created, bought, sold, and used to meet a cap.”

Of course, newer furnaces are a way to be more fuel efficient, Holt says. “Other investments that can significantly reduce CO2 emissions are the use of oxy-fuel fired furnaces, waste heat recovery and co-generation of electricity,” she says. “These each require double-digit million dollar investments and few glass makers have been able to justify a dollar return for such massive capital projects, particularly in this era of depressed pricing in the automotive and residential segments, historically the largest consumers of U.S. glass production. Cap and trade, however, could change these economics.”

Oxy-fuel technology can reduce natural gas consumption by 15 percent and CO2 by 10 percent, Holt says. “It is currently being installed in a new furnace being constructed in our Wichita Falls, Texas, facility. We have studies underway on waste fuel, cogeneration and other energy saving initiatives, but in the current business climate, it will be difficult to fund these projects. As a corporation, PPG reduced its GHG emissions by 1.4 percent from a 2006 baseline. Our recent rebuild of the furnace in Carlisle, Penn., should help continue this positive trend,” she says.

The effect
The extent to which a cap and trade program will cause erosion of U.S.-based manufacturing depends on whether there is either an international program to equalize compliance costs, or provisions in the U.S. program to offset costs for energy-intensive industries such as glass, Turnbull says. “For example, Chinese glassmakers could increase their exports to the U.S. and Europe if they do not and will not have the same cost burden as manufacturers operating under a cap and trade system,” he says. “Chinese furnaces are not as efficient as European and U.S. furnaces and it will take more energy to transport the cheaper-priced glass from China to western markets. The net result could be more GHGs being emitted overall with U.S. manufacturers taking the hit on their market share and bottom line. This is a major issue in current discussions of cap and trade legislation.”

Holt agrees. Market disadvantage is a big concern with the program, she says. “The threat posed by imported glass from countries without the added burden of a CO2 tax or other pollution control is quite serious,” she says. “It not only creates an unfair market advantage--seriously threatening U.S. jobs--it also undermines the purpose of a cap and trade system as the U.S. market would consume more glass made without regard for GHG’s. HR 1759 (Inslee-Doyle) attempts to address this with output based rebates to energy intensive industries, like glass. This bill is a good starting point to identify how we can address these competitiveness issues that a cap-and-trade system will create for glass and other energy-intensive manufacturers.”