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Industrial Consumption of Energy (ICE) Survey – Summary Report of Energy Use in the Canadian Manufacturing Sector, 1995–2009

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4 Energy consumption in the Manufacturing sector

The ICE survey collects energy use data from establishments that include all 21 subsectors of the Manufacturing sector (NAICS [North American Industry Classification System] 31 to 33). These establishments primarily transform materials or substances into new products.

This summary report examines energy consumption and energy intensity patterns for the Canadian Manufacturing sector. One way to define energy intensity in the Manufacturing sector is the energy use per unit of output; for example, it can be measured as the ratio of energy use to gross domestic product (GDP) in constant 2002 dollars. This ratio, which will be used throughout this summary report, provides a measure of the energy efficiency attained by a subsector that is easily comparable over time and between subsectors.

4.1 Energy intensity and total energy consumption in the Manufacturing sector

In 2009, the Manufacturing sector generated $146.6 billion in GDP, in constant 2002 dollars, and according to ICE estimates, it consumed 2047 petajoules (PJ) of energy. To put this into perspective, this amount is roughly twice the energy consumed for space heating, space cooling and lighting by all Canadian households (1006 PJ) in 2008.13

Canada’s Manufacturing sector used 18 percent less energy and produced 5 percent more output in 2009 than it did in 1995. The sector’s overall energy intensity declined 3 percent, from 18 megajoules per dollar of GDP (MJ/$GDP) to 14 MJ/$GDP (although it has been on the rise since 2007).

Figure 2 illustrates the indexed growth of energy intensity, energy use and GDP from 1995 to 2009. Between 1995 and 2000, despite significant growth in output, energy use in the Manufacturing sector was virtually unchanged, and therefore the energy intensity of the sector decreased substantially. From 2000 until 2003, there was little change in output and energy use and, consequently, in energy intensity. Between 2004 and 2006, energy intensity decreased because the sector’s output grew while energy consumption went in the opposite direction. Both output and energy consumption fell from 2007 to 2008 and continued to fall into 2009, although output fell at a faster rate than energy consumption.

Figure 2. Indexed growth of energy intensity, energy use and GDP for the Manufacturing sector, 1995–2009

Figure 2. Indexed growth of energy intensity, energy use and GDP for the Manufacturing sector, 1995–2009.

Caught in the global economic downturn, the Canadian economy started a downturn in 2008, which caused Canada to fall into a recession by the end of that year. According to a 2010 Bank of Canada report, “The global economic recovery is under way, supported by continued improvements in financial conditions and stronger domestic demand growth in many emerging-market economies …. Economic growth in Canada resumed in the third quarter of 2009 and is expected to have picked up further in the fourth quarter.”14

The fact that the downturn lasted late into the third quarter of 2009 explains, at least in part, the decrease in output between 2008 and 2009 (13 percent, from $167.9 billion in GDP in 2008 to $146.6 billion in GDP in 2009). Energy use also decreased over this period but at a lower rate (10 percent, from 2287 PJ to 2047 PJ). The Manufacturing sector, which was operating at a higher capacity utilization rate before the economic downturn, was likely benefitting from economies of scale, which disappeared when production dropped. In fact, Figure 3 shows that capacity utilization in the Manufacturing sector started its long decline in the second quarter of 2007 to reach its lowest point in the second quarter of 2009 (64.7 percent).15 The loss of these economies of scale contributed to the increase in energy intensity that the sector had experienced since 2007.

Figure 3. Manufacturing capacity utilization, 2006–2009

Figure 3. Manufacturing capacity utilization, 2006–2009.

4.2 Energy intensity and energy consumption by subsector

Figure 4 compares the energy intensity of the four Manufacturing subsectors that consumed the most energy in 2009, over the study period. These four subsectors accounted for 23 percent of the sector’s GDP and 76 percent of its energy consumption in 2009. The energy intensity varied across the selected subsectors, however. In 2009, it ranged from close to 19 MJ/$GDP for the Chemical Manufacturing subsector (NAICS 325) to more than 112 MJ/$GDP for the Petroleum and Coal Product Manufacturing subsector (NAICS 324).

Petroleum and Coal Product Manufacturing was the only selected subsector that experienced an increase in energy intensity over the 14 years (1995–2009). Further analysis of each selected subsector is provided in Section 5.

Figure 4. Energy intensity of the four selected Manufacturing subsectors,
1995–2009

Figure 4. Energy intensity of the four selected Manufacturing subsectors, 1995–2009.

Figure 5 shows the energy use of the selected Manufacturing subsectors for 1995, 2008 and 2009. The two biggest changes in both levels and percentages were as follows:

  • Energy consumption in the Paper Manufacturing subsector decreased 41 percent (370 PJ) from 1995 to 2009

  • Energy consumption in the Petroleum and Coal Product Manufacturing subsector increased 25 percent (74 PJ) from 1995 to 2009, declining slightly from 2008 to 2009.

Figure 5. Energy consumption of the four selected Manufacturing subsectors,
1995, 2008 and 2009

Figure 5. Energy consumption of the four selected Manufacturing subsectors, 1995, 2008 and 2009.

4.3 Energy consumption by energy category

From 1995 to 2009, the energy consumed by the Manufacturing sector shifted from some energy sources16 toward others. Figure 6 outlines the variances in the share of energy categories in 1995, 2008 and 2009. The share of electricity increased the most, whereas the share of spent pulping liquor decreased the most.

Figure 6. Share of energy consumption of the Manufacturing sector by energy category, 1995, 2008 and 2009

Figure 6. Share of energy consumption of the Manufacturing sector by energy category, 1995, 2008 and 2009.

According to the ICE survey, spent pulping liquor is produced and used only by the Paper Manufacturing subsector. This subsector has been in decline since 2004, as shown by the drop in the subsector’s GDP, from $12.0 billion in 2004 to $8.6 billion in 2009 (or 28 percent). This decline might explain, at least in part, the decreased use of spent pulping liquor since 2004 (a decrease of 41 percent). Similarly, refinery fuel gas17 is produced and used exclusively by the Petroleum and Coal Product Manufacturing subsector – and almost entirely by its Petroleum Refineries industry (NAICS 32411).18 This subsector saw its energy consumption increase by 25 percent from 1995 to 2009, which explains the increase in refined petroleum products during that period.

Electricity has replaced natural gas as the most-used energy source since 2003. As shown in Figure 7, the rapid growth in the price of natural gas compared with that of electricity may help explain this energy source shift, which in turn influenced the Manufacturing sector’s fuel mix.

Figure 7. Indexed growth of industrial natural gas and electricity prices,
1995–2008

Figure 7. Indexed growth of industrial natural gas and electricity prices, 1995–2008.

In addition to the price of fuels, the structure of a sector, in terms of production, contributes to the fuel mix. For instance, the increase in GDP of the Primary Production of Alumina and Aluminum industry (NAICS 331313), which is an electricity-intensive industry, contributed to the increase in electricity use.

As a complement to Figure 6, Table 3 illustrates the energy use by energy category and energy source for the Manufacturing sector in 1995 and 2009. Overall energy consumption in the sector fell by almost 18 percent over 1995–2009, with significant reductions in the consumption of most energy sources. Overall, energy consumption of the refined petroleum products (RPP) energy category is down only 1 percent. However, within the category, there were significant changes to the fuel mix. Heavy fuel oil and propane were down 53.9 percent and 46.7 percent respectively, while refinery fuel gas and middle distillates were both up, 55.5 percent and 43.3 percent respectively. Meanwhile, in the coal/coke energy category, petroleum coke and coal also experienced a slight increase in use.

Table 3. Manufacturing sector’s energy use by energy source, 1995 and 2009

Energy category Energy source 1995 energy 2009 energy Growth, 1995—2009
    (PJ) (%) (PJ) (%) (%)
Electricity Electricity 624.7 25.1 614.5 30.0 -1.6
Natural gas Natural gas 777.8 31.2 563.0 27.5 -27.6
Coal/coke Coal 41.3 1.7 41.8 2.0 1.3
Coke 102.9 4.1 56.1 2.7 -45.5
Coke oven gas 27.4 1.1 19.9 1.0 -27.3
Petroleum coke and coke from catalytic cracking catalyst 64.6 2.6 70.2 3.4 8.7
Total, coal/coke 236.2 9.5 188.1 9.2 -20.4
RPP* (incl. propane) Heavy fuel oil 139.8 5.6 64.4 3.1 -53.9
Middle distillates 17.2 0.7 24.6 1.2 43.3
Propane 12.3 0.5 6.6 0.3 -46.7
Refinery fuel gas 127.6 5.1 198.5 9.7 55.5
Total, RPP (incl. propane) 297.0 11.9 294.2 14.4 -1.0
Spent pulping liquor Spent pulping liquor 343.6 13.8 177.6 8.7 -48.3
Steam and wood Steam and wood 212.3 8.5 209.3 10.2 -1.4
Total 2 491.7 100.0 2 046.7 100.0 -17.9

Note: Due to rounding, the numbers in the table may not add up.
*RPP = refined petroleum products

Between 2008 and 2009, energy consumption in the Manufacturing sector fell by almost 10.5 percent, a significant one-year reduction. As outlined in Table 4, energy consumption of all energy sources decreased substantially from 2008 to 2009, with the exception of middle distillates and refinery fuel gas, which increased slightly.

Table 4. Manufacturing sector’s energy use by energy source, 2008 and 2009

Energy category Energy source 2008 energy 2009 energy Growth, 2008—2009
    (PJ) (%) (PJ) (%) (%)
Electricity Electricity 679.3 29.7 614.5 30.0 -9.5
Natural gas Natural gas 617.7 27.0 563.0 27.5 -8.96
Coal/coke Coal 53.4 2.3 41.8 2.0 -21.8
Coke 98.9 4.3 56.1 2.7 -43.2
Coke oven gas 25.9 1.1 19.9 1.0 -23.0
Petroleum coke and coke from catalytic cracking catalyst 78.5 3.4 70.2 3.4 -10.5
Total, coal/coke 256.7 11.2 188.1 9.2 -26.7
RPP* (incl. propane) Heavy fuel oil 76.2 3.3 64.4 3.1 -15.5
Middle distillates 24.4 1.1 24.6 1.2 1.2
Propane 8.2 0.4 6.6 0.3 -19.6
Refinery fuel gas 198.1 8.7 198.5 9.7 0.2
Total, RPP (incl. propane) 306.9 13.4 294.2 14.4 -4.2
Spent pulping liquor Spent pulping liquor 184.2 8.1 177.6 8.7 -3.6
Steam and wood Steam and wood 242.3 10.6 209.3 10.2 -13.7
Total 2 287.2 100.0 2 046.7 100.0 -10.5

Note: Due to rounding, the numbers in the table may not add up.
*RPP = refined petroleum products

13 Natural Resources Canada, Energy Use Data Handbook, 1990–2008, Residential Sector, Table 1, oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tableshandbook2/res_00_1_e_4.cfm.
14 Bank of Canada, press release, January 19, 2010, www.bankofcanada.ca/en/fixed-dates/2010/rate_190110.html.
15 Statistics Canada, The Daily, December 14, 2009, www.statcan.gc.ca/daily-quotidien/091214/dq091214b-eng.htm.
16 See Appendix A, Glossary, for a definition of energy source.
17 Included in “refined petroleum products” (RPP) in Figure 6.
18 See Appendix B, North American Industry Classification System.

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