When the Lights Go Out -- Keep your flashlights handy-increasing energy concerns could leave you soldering in the dark.

With rolling blackouts in California and the concern of energy shortages throughout the U.S., members of the electronics industry, and the nation, are paying close attention to the availability of affordable and reliable energy. What is the impact on electronics manufacturing? What caused the current energy crunch and what can be done about it?

The Energy Problem

In 1973 the U.S. (and the world) experienced an energy crisis as a result of decreased supply and a sharp increase in the price of Organization of the Petroleum Exporting Countries (OPEC) oil. In the short term, the impact manifested as long lines at the gas station and, in the long term, as a recession. Today's energy situation is different but has wide-reaching consequences. The U.S. economy is faced with a shortage of reliable, low-cost energy for residential and industrial customers. Companies in California have been faced with shortages of electric power, and the promised blackouts will only get worse.

Increased energy prices affect the cost to manufacture and transport goods. Regions of the U.S. and Canada that have sufficient power generation capability are also affected by the energy crisis. Such areas will now have to deal with increased transportation costs based on rising fuel prices. Some segments of the electronics industry will feel the monetary impact more than others. Semiconductor fabricators are big energy users. Increased energy prices directly impact contract assembly by only a few percentage points of the total production cost. With lost revenue and decreased productivity during periods without power, even service industries are affected by blackouts.

Given the present situation, one wonders how some of the world's most powerful economies could be reduced to an energy situation typically associated with underdeveloped countries. OPEC has cut oil production twice since early 2001, and the price of oil has risen to $28 per barrel. Legislation to cap energy prices for the consumer, coupled with the fact that little power production capacity has been added (no new nuclear power plants have been added in the last 30 years), have exacerbated the problem. In addition, the U.S. has built no new refineries in the past 20 years. Until recently, refining gasoline and heating oil was a low-profit business with excessive capacity. According to the Energy Information Agency, the U.S. had 324 refineries in 1981 when the industry was deregulated, but only 158 last year1. Demand for energy has continued to soar, but the supply has not kept pace.

Solutions?

Clearly, a need exists for increased power production, but what new problems might such an increase create? Does this mean drilling for oil in the pristine Alaska Arctic Wildlife Refuge? The same refineries that process crude oil from the Persian Gulf cannot process crude oil from Alaska. Does this mean the introduction of more coal burning plants? Acid rain and air pollution from coal burning plants was a terrible problem many years ago. Does the need for new refineries mean the construction of nuclear plants? Does anyone want another Three Mile Island in his or her backyard?

Natural gas offers one of the cleanest sources of energy. The pollution from a 750-megawatt gas power plant represents less air pollution than 350 sport utility vehicles (SUVs). The U.S. Environmental Protection Agency (EPA) reports that a gallon of gas generates 20 pounds of CO2 while the Sierra Club reports a figure of 28 pounds-the Sierra Club does not recommend that members drive SUVs. Distribution of natural gas poses other problems-the use of antiquated pipelines creates safety concerns, and issues with property right-of-ways limit new construction. Choosing new sources of energy is not easy.

Conclusion

Previously, conservation has not been a major priority, but may be a smart way to help improve the energy situation. Certain contract electronics assembly operations have already started to shift production to off-peak hours. Newer facilities and building renovations are considering improved energy conservation solutions. Some companies have found ways to insulate equipment to improve energy efficiency. A number of programs are available to provide solutions for businesses, including energy efficiency audits by utilities and independent consulting services.

What effect the economy and the energy crunch will have on each other remains unclear. On one hand, the economic slowdown means plant closings, and idle manufacturing lines will result in a reduced demand for energy. Alternatively, rising energy prices could shock the economy and cause a prolonged economic slump. The road ahead will prove challenging-no easy solutions exist.

E. Jan Vardaman is president of TechSearch International, Austin, TX; e-mail: [e-mail].

Reference

1. Time Magazine, May 21, 2001, p. 49.

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More Information on Energy Conservation

A crucial part of the long-term energy solution, as indicated by past experience and experts in the field, is conservation. According to Staci Homrig, spokesperson for Pacific Gas & Electric (PG&E, San Francisco, CA), the largest electrical supplier in California, electrical demand in PG&E's service area has been reduced by 123 billion kilowatt-hours since the company began conservation programs in 1976. Dominion Virginia Power Energy (Richmond, VA) offers an audit program to assist customers in conservation programs. Private companies such as TGM, Inc. (Richardson, TX) offer customized insulated heating jackets for cleanroom vacuum exhaust piping systems that can reduce energy consumption.

Companies can research ways to decrease energy consumption using the Internet. The majority of energy conservation sources are governmental, including the Department of Energy (DOE, Washington, D.C.), www.energy.gov, and the Environmental Protection Agency (EPA, Washington, D.C.), www.energystar.gov, which promotes the Energy Star Program. Privately funded sites, such as The Energy Foundation (San Francisco, CA), www.ef.org/aboutus/index.cfm, and Consortium for Energy Efficiency, Inc. (Boston, MA), www.ceeformt.org, also provide beneficial information.

Another source for information is quasi-state governmental organizations such as California Independent System Operators Corporation (Folsom, CA). An executive board runs this organizatio, and the administration acts independently of state government. The organization's Web site provides information on current system load, the current day's peak demand, the day's forecasted peak and the next day's forecasted peak in megawatts. For more information on the organization, visit www.caiso.com/PowerCentral/conservation.html.

The Environmental Energy Technologies Division at the Lawrence Berkeley National Laboratory (Berkeley, CA) features industry-related reports on its Applications Team Web site, http://ateam.lbl.gov. Quick links on the site include areas concerning energy efficient cleanrooms, laboratory design guides and high-performance laboratory fume hoods. The cleanrooms information area provides information to help design a resource-efficient cleanroom, which complies with ISO 14000 and conserves energy. International SEMATECH (Austin, TX) has also conducted studies on energy efficiency for semiconductor fabricators, and the information can be found at www.sematech.org/public /docubase/document/3939aeng.pdf.

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