Industry Leaders Interview: Dow CEO Andrew Liveris

Industry Leaders Interview: Dow CEO Andrew Liveris

Founded in 1897, The Dow Chemical Company has demonstrated a commitment to environmental stewardship and energy efficiency for decades. Company president and CEO Andrew Liveris recently sat down with Alliance to Save Energy's e-FFICIENCY NEWS to discuss U.S. energy policy, natural gas prices, and the role of the chemical industry in promoting energy efficiency.

e-FFICIENCY NEWS: The Dow Chemical Company is a major contributor to the Power is in Your Hands campaign, which focuses on arming consumers with tips to lower their anticipated high winter energy bills. Explain for us the importance of private sector contributions to education and outreach programs that seek to lower dependence on foreign oil and reduce overall energy costs and consumption.

Andrew Liveris: High energy prices are a critical issue for all American consumers, including the manufacturing sector. Dow is committed to doing its share to be part of the solution to America's energy challenges -- not only through supporting important campaigns like The Power is in Your Hands, but by continuing to focus on energy efficiency within our own company and by producing products that help everyone save energy.

Focusing on energy efficiency is the best near-term action that consumers can take to help address the skyrocketing costs of energy, particularly natural gas. The Power is in Your Hands campaign represents a significant effort to arm Americans with the tools and information they need to save energy and money this winter. By joining this campaign, we very much want to enlist as many Americans as possible to save energy, to grow our economy and promote greater energy independence.

EN: As a major energy consumer, what steps has The Dow Chemical Company taken to be more energy efficient?

AL: Energy efficiency has been part of our heritage since the very early years of our company. For example, in the early 1900's our founder Herbert H. Dow teamed up with George Westinghouse to develop one of the first generators for industrial cogeneration, which allowed us to power our manufacturing processes more efficiently and reduce our fossil fuel requirements. More recently, we exceeded an aggressive public commitment to achieve a 20% reduction in the amount of energy that it takes to produce each pound of product versus a 1994 baseline. In fact, by year-end 2005 Dow reduced its energy intensity by 22% worldwide saving more than 900 trillion Btu's of energy, a savings that when converted to electricity would be more than sufficient to meet the electricity needs of all residential energy users in the state of California for one year. In the process, Dow also realized $3 billion in energy savings.

Dow achieved these substantial energy savings by: upgrading our power plants; implementing hundreds of projects to increase energy savings and minimize waste at our manufacturing facilities; utilizing available energy-efficient technology where practical; and increasing energy capture from by-products, such as hydrogen.

EN: With the recent passage of comprehensive energy legislation and the ongoing concern about continuing increases in prices for every fuel, what do you think are some of the key issues the nation needs to address to insure reliable, clean and efficient energy? Do you think we have an adequate national energy policy?

AL: The Energy Policy Act of 2005 was a good start. But more must be done, especially on natural gas. There is still a fundamental imbalance between government policies that spur demand for natural gas while limiting access to the nation's natural gas supply. The legislation calls for a major energy conservation and efficiency public education program. Yet it must be funded. We need to meet our electric power growth needs with other fuels besides natural gas. Electricity must be both generated and used as efficiently as possible. Advanced coal, renewables and inherently safe nuclear technology must all be considered if we are going to address the dual issues of energy security and climate change. We must also look for environmentally respectful ways to produce more American natural gas, particularly in the deep waters of the Outer Continental Shelf. Energy efficiency has huge potential, but the world's energy needs are such that we need a balanced array of tools on both the supply and demand sides of the equation.

EN: Where do you see the role of the chemical industry or the industrial sector generally in terms of energy efficiency and energy responsibility?

AL: The chemical industry is a leader in the efficient use of energy. We have to be, because we use petroleum and natural gas as both a fuel and a raw material. We operate in a global economy where competitors have access to raw materials at a fraction of U.S. costs. Everything from milk jugs to tires and pharmaceuticals -- even insulation, require raw materials based on oil or gas. Some of the best manufacturing jobs in the world are right here in the American chemical industry -- and they depend on globally competitive natural gas prices. We can do more to leverage our experience in energy efficiency by convincing others that it's a win-win for the environment and the economy.

EN: Natural gas prices are a chief concern of the chemical industry. Traditionally, The Dow Chemical Company has advocated for measures and policies to both increase supply and decrease demand. From an energy-efficiency standpoint, where do you see the biggest opportunities to achieve some type of balance between these two competing approaches?

AL: It is unfortunate that these are seen as competing approaches to addressing America's energy challenges. The reality is that energy is vital to our modern standard of living and essential to manufacturing products that are part of our daily life -- from cars, to medicine, to computers. As a result, we see energy demand rising around the world, as consumers aspire to improve their standard of living and manufacturers produce products to meet this growing consumer demand. The key to meeting this energy demand and enabling economic growth, while utilizing America's energy resources responsibly, is a balanced energy policy approach.

The need for environmentally responsible exploration to increase this nation's energy supply is inescapable. At the same time, it is the duty of all American energy consumers to do their part to reduce this nation's energy demand -- by focusing on efficiency. Neither supply- nor demand-side measures can, alone, solve this nation's complex energy challenges. An effective and sustainable energy solution will require both.

This article has been reprinted with kind permission from e-FFICIENCY NEWS, an electronic newsletter published by the nonprofit Alliance to Save Energy. It was first published in March 2006.