Summary Report of Energy Use
in the Canadian Manufacturing
Sector, 1995-2010

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4. Energy consumption in the Manufacturing sector

The ICE survey collects energy use data from establishments in 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. Energy intensity patterns and energy efficiency improvements are discussed in greater detail in the Energy Efficiency Trends in Canada 1990 to 2009 report at oee.nrcan.gc.ca/publications/statistics/trends11/index.cfm.

4.1 Energy intensity and total energy consumption in the Manufacturing sector

In 2010, the Manufacturing sector generated $155.7 billion in GDP, in constant 2002 dollars, and according to ICE estimates, consumed 2135.9 petajoules (PJ) of energy. To put this into perspective, this amount is roughly equal to the energy consumed for space heating, space cooling, water heating and lighting by all households and all commercial and institutional buildings in Canada in 2009.¹⁰

Canada’s Manufacturing sector used 14.3 percent less energy and produced 11.0 percent more output in 2010 than it did in 1995. This translated into a 22.8 percent decline in the sector’s overall energy intensity from 17.8 megajoules per dollar of GDP (MJ/$GDP) to 13.7 MJ/$GDP, although intensity was briefly on the rise from 2007 to 2009 (see Table A.1 in Appendix A).

Figure 2 and Table A.2 in Appendix A illustrate the indexed growth of energy use, GDP and energy intensity from 1995 to 2010. 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 2004, 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. From 2009 to 2010, with the economy on an upswing, both output and energy consumption began to rise again, although output grew at a faster rate, causing energy intensity to decrease slightly (3.7 percent) during that year and recapturing some of the economies of scale lost during the recession.

Figure 2. Indexed growth of energy use, GDP and energy intensity for the Manufacturing sector, 1995–2010

After a difficult year in 2009, Canada’s Manufacturing sector began a comeback in 2010 with widespread growth and the reversal of many downward trends. In 2010, growth was reported in 19 of the 21 subsectors. Among Manufacturing industries, annual capacity utilization reached 77.1 percent in 2010, up from 70.9 percent in 2009, indicating increased strength in the economy (see Table A.3 in Appendix A). “Capacity utilization rates act as an indicator of overall demand in the economy. Higher capacity utilization rates reflect that resources are in high demand, and may also lead to new capital investments, such as new plants and equipment that promote growth in the future.”¹¹

Figure 3. Manufacturing capacity utilization, 2006–2010

4.2 Energy intensity and energy consumption by subsector

Figure 4 compares the energy intensity of the seven Manufacturing subsectors that consumed the most energy in 2010, over the study period. In 2010, these seven subsectors accounted for 91.0 percent of the sector’s energy consumption and 44.5 percent of the sector’s GDP. Their energy intensities ranged from 5.9 MJ/$GDP for the Food Manufacturing subsector to 101.7 MJ/$GDP for the Petroleum and Coal Product Manufacturing subsector. All seven selected subsectors experienced a decrease in energy intensity from 1995 to 2010, but significant decreases were shown for the Non-Metallic Mineral Product Manufacturing subsector (47.2 percent), the Paper Manufacturing subsector (27.0 percent) and the Primary Metal Manufacturing subsector (22.6 percent). For a full breakdown of energy intensity data for the seven subsectors, see Table A.7 in Appendix A.

Figure 4. Energy intensity of the seven selected subsectors, 1995–2010

Figure 5 shows the energy use of the selected Manufacturing subsectors for 1995, 2009 and 2010. Some of the biggest changes in both levels and percentages were as follows (see Table A.5 in Appendix A):

• Energy consumption in the Paper Manufacturing subsector decreased 39.3 percent (354.5 PJ) from 1995 to 2010.
  
  
• The Petroleum and Coal Product Manufacturing subsector consumed 15.5 percent (45.5 PJ) more energy in 2010 as compared to 1995, although the 2010 level was down slightly (5.4 percent) from 2009.
  
  
• From 1995 to 2010, energy consumption in the Food Manufacturing subsector increased 20.7 percent, and similarly, that of the Wood Product Manufacturing subsector grew 18.5 percent.

Figure 5. Energy consumption of the seven subsectors, 1995, 2009 and 2010

4.3 Energy consumption by energy category

From 1995 to 2010, the energy consumed by the Manufacturing sector shifted from some energy sources toward others. Figure 6 outlines the variances in the share of energy categories in 1995, 2009 and 2010 (refer to Tables A.8 and A.9 in Appendix A for trends from 1995 to 2010). The share of steam and wood, coal/coke and electricity increased, whereas the share of spent pulping liquor¹² and natural gas decreased. The share of refined petroleum products¹³ (including natural gas liquids) increased from 1995 to 2009 (2010 data are confidential and cannot be reported).

Figure 6. Share of energy consumption of the Manufacturing sector by energy category, 1995, 2009 and 2010

Note that, according to the ICE survey, spent pulping liquor is produced and used exclusively 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 $8.8 billion in 2010 (or 26.7 percent) (see Table A.6 in Appendix A). This decline might explain, at least in part, the decreased use of spent pulping liquor from 2004 to 2008, although 2009 and 2010 saw a slight increase in use of this energy source (due to a similar increase in output by the subsector during that same 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 between 1996 and 2006 may help explain this energy source shift, which, in turn, influenced the Manufacturing sector’s fuel mix (see Table A.10 in Appendix A). However, the gap between both of these energy sources narrowed over the last four years, with the price of natural gas dropping. For a breakdown of the share of energy consumption in the Manufacturing sector by energy source from 1995 to 2010, refer to Table A.8 in Appendix A of this report.

Figure 7. Indexed growth of industrial natural gas and electricity prices,
1995–2009

*kW (kilowatt) refers to electrical power load, whereas kWh (kilowatt hour) refers to electrical energy consumed, i.e. the amount of electrical power consumed over a period of time.

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

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 2010 (see Table A.8 in Appendix A for a full breakdown). Overall energy consumption in the sector fell by over 14 percent over the period 1995 to 2010. The table outlines significant reductions in the consumption of most energy sources. Within the RPP energy category, there were significant changes to the fuel mix (i.e. heavy fuel oil and propane were down 68.3 percent and 42.9 percent respectively, while consumption of middle distillates was up 53.4 percent). Petroleum coke and coal also experienced a significant increase in use during the period, whereas both coke and coke oven gas decreased.

Table 3. Manufacturing sector’s energy use by energy source, 1995 and 2010

Between 2009 and 2010, total energy consumption in the sector rose slightly (3.1 percent), whereas output increased by 7.0 percent. As outlined in Table 4, there were increases in energy consumption of all energy sources from 2009 to 2010, with the exception of heavy fuel oil, which was the only energy source to decrease (22.6 percent).

Table 4. Manufacturing sector’s energy use by energy source, 2009 and 2010

¹⁰ Natural Resources Canada, Comprehensive Energy Use Database, 1990–2009, Residential Sector, Table 2, oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablestrends2/res_ca_2_e_3.cfm, and Commercial/Institutional Sector, Table 4, oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablestrends2/com_ca_4_e_4.cfm.
¹¹ Taken from the Capital and Repairs Expenditure survey done by Statistics Canada.
¹² See Appendix B, Glossary, for a definition.
¹³ See Appendix B, Glossary, for a definition.

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