Forty years ago, the steel mills and factories south of Chicago were known for their sooty smokestacks, plumes of steam, and throngs of workers. Clean-air laws have since gotten rid of the smoke, and labor-productivity initiatives have eliminated most of the workers. What remains is the steam, billowing up into the sky day after day, just as it did a generation ago.
The U.S. economy wastes 55 percent of the energy it consumes, and while American companies have ruthlessly wrung out other forms of inefficiency, that figure hasn’t changed much in recent decades. The amount lost by electric utilities alone could power all of Japan.
A 2005 report by the Lawrence Berkeley National Laboratory found that U.S. industry could profitably recycle enough waste energy—including steam, furnace gases, heat, and pressure—to reduce the country’s fossil-fuel use (and greenhouse-gas emissions) by nearly a fifth. A 2007 study by the McKinsey Global Institute sounded largely the same note; it concluded that domestic industry could use 19 percent less energy than it does today—and make more money as a result.
Economists like to say that rational markets don’t “leave $100 bills on the ground,” but according to McKinsey’s figures, more than $50 billion floats into the air each year, unclaimed by American businesses. What’s more, the technologies required to save that money are, for the most part, not new or unproven or even particularly expensive. By and large, they’ve been around since the 19th century. The question is: Why aren’t we using them?
One of the few people who’s been making money from recycled steam is Tom Casten, the chairman of Recycled Energy Development. Casten, a former Eagle Scout and marine, has railed against the waste of energy for 30 years; he says the mere sight of steam makes him sick. When Casten walks into an industrial plant, he told me, he immediately begins to reconfigure the pipes in his head, totting up potential energy savings. Steam, of course, can be cycled through a turbine to generate electricity. Heat, which in some industrial kilns reaches 7,000F, can be used to produce more steam. Furnace exhaust, commonly disposed of in flares, can be mixed with oxygen to create the practical equivalent of natural gas. Even differences in steam pressure between one industrial process and another can be exploited, through clever placement of turbines, to produce extra watts of electricity.
By making use of its “junk energy,” an industrial plant can generate its own power and buy less from the grid. A case in point is the ArcelorMittal steel mill in East Chicago, Indiana, where a company called Primary Energy/EPCOR USA has been building on-site energy plants to capture heat and gases since 1996. Casten, Primary Energy’s CEO from 2003 to 2006, was involved in several projects that now sell cheap, clean power back to the mill.
As a result of Primary Energy’s projects, the mill has cut its purchases of coal-fired power by half, reduced carbon emissions by 1.3 million tons a year, and saved more than $100 million. In March, the plant won an EPA Energy Star award. Its utilities manager, Tom Riley, says he doesn’t foresee running out of profitable projects anytime soon. “You’d think you might,” he says, “but you can always find more … Energy efficiency is a big multiplier.”
Casten wants to help everyone see such possibilities, so he’s been combining EPA emissions figures with Google Earth images to let investors “peer” into smokestacks and visualize the wasted energy. Recycled Energy Development recently received $1.5 billion in venture funding, which should enable it to expand its reach greatly. Casten gives a whirlwind tour of the targets: natural-gas pipelines, he says, use nearly a tenth of the gas they carry to keep the fuel flowing. Capture some of the heat and pressure they lose, and the U.S. could take four coal-fired power plants offline (out of roughly 300). Another power plant could be switched off if energy were collected at the country’s 27 carbon-black plants, which make particles used in the manufacture of tires. And so on through facilities that make silicon, glass, ethanol, and orange juice, until, Casten hopes, he has throngs of competitors. “I always thought that if we were successful, people would emulate us and I’d be happy at the end of the day. I just didn’t think it would take 30 years.”