Controlling Energy and Raw Material Costs and Availability
Manufacturers Need Reliable and Cost-Effective Energy Solutions
Die casting manufacturers are among the largest consumers of energy in the United States. Not only do they directly face rising prices, but when production costs increase for their suppliers and customers, these smaller businesses feel the pressure and are the ones who pay the greatest price. Especially when it comes to raw material pricing and availability, which is already under threat due to pending government import taxes.
An April 2016 survey conducted by the North American Die Casting Association (NADCA) showed that manufacturers of their size spent an average of $2.087 million last year on energy, including $1.25 million on electricity, for their production facilities. In addition, nearly two-thirds of respondents expect an increase in their energy costs this year. By the EPA’s own admission, their pending regulation of carbon emissions from existing power plants will increase electricity costs annually by 6-12%, while industry experts predict a 20% jump. This annual $250,000 increase for NADCA members comes before the average 4-7% yearly rise in costs die casters already expect from their suppliers.
NADCA encourages policymakers in Washington and around the country to overhaul our nation’s regulations and develop all of America’s vast energy resources—traditional, unconventional, and alternative.
NADCA believes Washington must:
- Increase energy production by supporting policies that promote, not hinder, all domestic energy sources;
- Expedite permitting and review processes to bring power generating units online faster;
- Encourage manufacturing businesses to incorporate energy efficient technologies and update facilities;
- Lessen America’s dependence on foreign sources of energy by increasing domestic exploration;
- Increase the use of alternative/renewable fuels such as wind, solar, hydro, and geothermal energy; and
- Support federal and public-private partnerships promoting the development and use of lightweight materials.
We must harness all of America’s energy sources to continue to domestically manufacture innovative products, including die castings. However, the federal government has blocked hundreds of proposed energy projects—many of them renewable—due to permitting delays and other obstacles. Meanwhile, U.S. carbon emissions from energy production in 2012 hit the lowest levels since 1994, according to a report from the Dept. of Energy. While politicians promote programs for energy independence, regulators are seemingly standing in the way of reliable and cost-effective energy solutions.
To promote energy independence, NADCA believes:
- The EPA must enforce current law and withdraw rules greenhouse gas carbon emissions from power plants;
- The EPA should withdraw its proposed regulation of ground level ozone emissions;
- The EPA should demonstrate that it is conducting a cost/benefit analysis of proposed regulations under various Executive Orders and as required by the Clean Air Act Section 321(a);
- Congress must finalize and pass a comprehensive energy reform bill, which:
- Expedites permits, reconciles environmental and energy laws, and increases domestic sourcing;
- Increases exploration of all domestic energy sources including, coal, hydro, solar, wind, nuclear, others;
- Promotes the use of energy efficient technologies, materials, and facilities by manufacturers; and
- Requires additional oversight, transparency, and analysis of new energy and environmental regulations.
More NADCA Resources on Energy and Raw Materials