According to EIA’s 2014 Manufacturing Energy Consumption Survey (MECS), the capability of the US manufacturing sector to switch the fuels it uses has declined in recent decades.
Namely, among the most commonly substitutable fuels used in US manufacturing, the amount that could be switched in less than 30 days dropped from 24% in 1994 to 10% in 2014. This leave manufacturers less able to respond to changes in regulations and market conditions.
In 2014, the main reason for not being able to switch fuels used in US manufacturing was that the equipment onsite would not support it, with 78%. 75% cited unswitchable electricity receipts, and 62% of unswitchable coal consumption. Other reasons for the inability to switch fuels included lack of availability of alternative fuels, environmental restrictions on alternative fuels, and restrictions of long-term contracts.
The shift away from using other fossil fuels in US manufacturing, was due to increased availability of natural gas, lower natural gas prices in comparison to other fuels, and the ability of manufacturers to comply with environmental regulations when using natural gas. These factors caused manufacturers to focus on natural gas use and to discount the value that fuel-switching capability had provided in earlier years. The share of manufacturing’s natural gas consumption that was unswitchable increased steadily between 1994 (72%) and 2014 (89%).
Finally, industries that have high demand for natural gas as a chemical feedstock to make other products find it less useful to invest in fuel-switching flexibility than industries without such requirements.
