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INSULATION , A CRTICAL COMPONENT OF INSULATION , A CRTICAL COMPONENT OF HIGH HIGH- -PERFORMANCE BUILDINGS PERFORMANCE BUILDINGS The Importance of The Importance of The Importance of The Importance of Mechanical Insulation Mechanical Insulation High High Performance Insulation: Increasing Energy Efficiency Protecting High High-Performance Insulation: Increasing Energy Efficiency, Protecting Performance Insulation: Increasing Energy Efficiency Protecting Performance Insulation: Increasing Energy Efficiency, Protecting the Environment, Creating Jobs, and Stimulating our Economy the Environment, Creating Jobs, and Stimulating our Economy NASEO May 19, 2010 Webinar NASEO May 19, 2010 Webinar 1

An Unprecedented Alliance An Unprecedented Alliance May 2009 May 2009 National Insulation Association and International National Insulation Association and International Association of Heat and Frost Insulators and Allied Workers Association of Heat and Frost Insulators and Allied Workers With the changes in our nation’s capital and the economy, NIA and the International recognize an unprecedented opportunity to help our nation move toward energy efficiency and independence unprecedented opportunity to help our nation move toward energy efficiency and independence, protecting the environment, and job creation/preservation. 2

Defining Mechanical Insulation Defining Mechanical Insulation MECHANICAL INSULATION MECHANICAL INSULATION encompasses all thermal, encompasses all thermal, acoustical, and personnel and life acoustical, and personnel and life safety requirements in Industrial safety requirements in y y q q Industrial and and Commercial Commercial Building Building applications: applications: > Mechanical piping and equipment > Mechanical piping and equipment > Mechanical piping and equipment, > Mechanical piping and equipment, hot and cold applications hot and cold applications > Heating, Ventilation & Air > Heating, Ventilation & Air Conditioning (HVAC) applications Conditioning (HVAC) applications > Refrigeration and other low > Refrigeration and other low - - temperature piping and equipment temperature piping and equipment applications applications 3

Mechanical Insulation Saving Energy, Protecting the Environment, Creating Jobs Private Sector Industrial Market Commercial Market Government Sector 4

Mechanical Insulation Mechanical Insulation Industry Segments Industry Segments y y g g Commercial, HVAC & Industrial Commercial, HVAC & Industrial Food Processing Retail & Wholesale Industry Pulp & Paper Industry Schools Schools District Heating Education Sector Hospitals Healthcare Sector Manufacturing Multi ‐ Family Residences Petroleum Industry Power & Process Industries Office Buildings Entertainment Industry Chemical Industry OEM, Marine, Cryogenic, Refractory, Metal Building OEM, Marine, Cryogenic, Refractory, Metal Building 5

The Importance of Insulation M Mechanical insulation is the “Rodney h i l i l ti i th “R d “R d “Rodney Dangerfield” Dangerfield” of energy conservation, emission reduction job creation and emission reduction, job creation and many other initiatives ! “No respect” for the potential “No respect” for the potential benefits of mechanical insulation benefits of mechanical insulation or the potential Return on or the potential Return on Investment (ROI) Investment (ROI) Mechanical insulation is the Mechanical insulation is the “Forgotten Technology “Forgotten Technology” Forgotten Technology Forgotten Technology 6

Mechanical insulation is the “Forgotten Technology “Forgotten Technology”  The thickness of mechanical insulation has not substantially changed in 20 years  10-30% of all mechanical insulation is missing or damaged within 1-3 years of initial installation 7

ASHRAE 90.1 History 5 4 1/2 Pipe Insulation p 4 4 tion Thickness, in. 3 1/2 Commercial Sector 275F/2" NPS 3 225F/4"NPS 2 1/2 180F/2"NPS 140F/1"NPS 2 2 Insulat 42F/3"NPS 1 1/2 1 1/2 3 1/2 0 0 1989 1999 2001 2004 2007 2010 3 Year HVAC Insulation 2 1/2 hickness, in. 275F/2" NPS 2 225F/4"NPS Insulation Th 180F/2"NPS 140F/1"NPS 1 1/2 42F/3"NPS 1 1/2 0 1989 1999 2001 2004 2007 Year

These are examples of normal occurrences These are examples of normal occurrences Ice forming due to improper 350 ⁰ F Un-insulated pipe design, installation & maintenance

Mechanical insulation is the “Forgotten Technology” “Forgotten Technology  The thickness of mechanical insulation has not substantially changed in 20 years  10-30% of all mechanical insulation is missing or damaged within 1-3 years of initial installation  Computer modeling programs for buildings do not  C t d li f b ildi d t include specific modifications to adjust for increased mechanical insulation  In a 4-year mechanical engineering program, less than 1 hour is spent on thermal insulation 10

WHY IS INSULATION THE FORGOTTEN WHY IS INSULATION THE FORGOTTEN TECHNOLOGY? TECHNOLOGY? TECHNOLOGY? TECHNOLOGY? – Reduced knowledge base has led to R d d k l d b h l d t underutilization and insulation systems being applied but rarely engineered applied but rarely “engineered” – No gauges – No monitoring No monitoring – No computer chip – Insulation is normally part of larger Insulation is normally part of larger mechanical contract – “value engineered” The benefits are instantaneous The benefits are instantaneous The benefits are instantaneous, The benefits are instantaneous, but invisible and taken for granted but invisible and taken for granted 11

Putting The Power of Insulation to Work g WHY INSULATE? WHY INSULATE? 1. Reduce energy cost 2. 2 Reduce polluting emissions Reduce polluting emissions 3. Control condensation, mold & Corrosion Under Insulation (CUI) ( ) 4. Provide workplace safety and life safety 5. Improve work environment 6 6. I Improve process control t l 7. Use with sustainable design initiatives 8. 8. Improve facility life-cycle costs Improve facility life cycle costs 9. Provide exceptional Return on Investment (ROI) 12

Capitol Hill Likes Numbers Capitol Hill Likes Numbers Capitol Hill Likes Numbers Capitol Hill Likes Numbers 13

Mechanical Insulation Mechanical Insulation Opportunity/Potential Opportunity/Potential Energy CO ₂ Jobs Source Savings Reduction ROI/20 yrs Created/ Billions Billion Preserved $/yr $/yr Lbs/yr Lbs/yr Industrial Maintenance $ 3.6 83.5 94.5% 27,567 Regulatory Changes: Pipe Market $ .3 3.3 22.5% 2,000 HVAC Market $ .9 9.6 9.7% 60,000 Other, To Be Determined Other, To Be Determined TBD TBD TBD TBD TBD TBD TBD TBD Total $ 4.8 96.4 9.7 ‐ 94.5% 89,000 These estimates do not include commercial retrofit, upgrading of These estimates do not include commercial retrofit, upgrading of These estimates do not include commercial retrofit, upgrading of These estimates do not include commercial retrofit, upgrading of insulation values or thicknesses in existing commercial or industrial insulation values or thicknesses in existing commercial or industrial facilities or other specialty applications facilities or other specialty applications 14

What do those numbers really What do those numbers really mean? mean? ? Energy savings of $4.8 billion per year equates to: • 45 billion kWh of electricity, enough to power 45 billion kWh of electricit eno gh to po er 4.2 million households for a year and equivalent to annual output from 10,300 wind turbines • 82 million barrels of oil, enough to fill about 41 supertankers • 19 million tons of coal, enough to fill 190,000 • 19 million tons of coal enough to fill 190 000 railcars • 480,000,000,000,000 Btus (0.48 quadrillion Btus) of primary energy— or 1.83 days of energy f i 1 83 d f consumption for the entire United States Mechanical Insulation Mechanical Insulation Opportunity/Potential Opportunity/Potential 15

What do those numbers really What do those numbers really mean? mean? ? 43 MMTCO 2 of CO 2 reduction per year equates to: • Adding 1.9 billion mature trees (4.3 million acres Addi 1 9 billi t t (4 3 illi of new forest, an area the size of Connecticut and Delaware combined) • Removing 7.9 million cars from the roads, about 3% of 254 million cars registered in the United States States • Installing 730 million compact fluorescent light bulbs, equivalent to 2.3 light bulbs for every man, bulbs, equivalent to 2.3 light bulbs for every man, woman, and child in the United States Mechanical Insulation Mechanical Insulation Opportunity/Potential Opportunity/Potential 16

Non-fossil energy use grows rapidly, but fossil fuels still provide 78 percent of total energy use in 2035 provide 78 percent of total energy use in 2035 quadrillion Btu History Projections 120 120 Renewables (excluding liquid biofuels) 100 Liquid biofuels 80 Liquid fuels 60 Coal 40 Natural gas Natural gas 20 20 Nuclear 0 1980 1980 1985 1985 1990 1990 1995 1995 2000 2000 2005 2005 2010 2010 2015 2015 2020 2020 2025 2025 2030 2030 2035 2035 Richard Newell, SAIS, December 14, 2009 Source: Annual Energy Outlook 2010 17

Source: The McKinsey Quarterly, 05 2007 A Cost Curve for Greenhouse Gas ReductionEnkvist, Naucler, Rosander