Very good news, now if they will just lower our taxes a little and couple it with the EPA decision today we could actually see some manufacturing increases here soon.
Posted on 06/29/2015 8:41:40 AM PDT by thackney
“Made in the U.S.A” is becoming more affordable. The reason? Fracking.
You don’t need to a Nobel Prize in economics to know that the fracking revolution has been good for the U.S. What’s not so well known is just how competitive cheap oil and gas has made American manufacturing. BCG, the Boston consultancy, estimates the average cost to manufacture goods in the U.S. is now only 5% higher than in China and is actually 10% to 20% lower than in major European economies. Even more striking: BCG projects that by 2018 it will be 2% to 3% cheaper to make stuff here than in China.
Part of the reason for the narrowing gap is that wages have been rising in China. And American companies have been boosting their productivity faster than many of their international competitors. But perhaps the single largest factor is that fracking has helped dramatically drive down the price of oil and gas that’s being used in energy intensive industries such as steel, aluminum, paper and petrochemicals. BCG calculates that U.S. industrial electricity prices are now 30% to 50% lower than those of other major exporters.
“A 5% price discrepancy in manufacturing between China and the US doesn’t amount to much,” says BCG’s David Gee, “when you consider that US manufacturers face the risks of delay when shipping from China, the threat of port strikes, and the local investments and partnerships that Beijing often requires of foreign companies doing business there.”
Lower energy prices can also open up new opportunities such as a using natural gas to power fleet vehicles and trucks, which would reduce American dependence on foreign oil and cut greenhouse gases. Natural gas can also be converted into hydrogen to power fuel cells like the ones in Toyota’s Mirai passenger car. (The Japanese car giant will start taking orders for the Mirai in California this summer.)
Over the last few years, cheap energy has encouraged players in various industries to earmark $138 billion for new U.S.-based investments. This spring, for example, the petrochemical giant Sasol started construction on an $8.1 billion ethane cracker at Lake Charles, La. And energy companies like Cheniere are building multi-billion LNG terminals on the Gulf of Mexico to export overseas, where natural gas can be three to four times more expensive than it is in the U.S.
How long will America’s advantage last? Harvard Business School’s Michael Porter, who along with BCG issued a new report in June called “America’s Unconventional Energy Opportunity,” says that America has about a 15-year lead on other nations when it comes to fracking. The most telling number to make that point? The U.S. has 101,117 fracked wells, followed by Canada’s 16,990. By contrast China has 258.
Bringing the regulatory costs and taxes down would lead to a boom.
Unfortunately, the left and the EPA will fight “energy intensive” industries.
Last year America ran a new all-time record high trade deficit with the Peoples Republic of China.
342 billion dollars. Way up from the year before.
And that is still growing.
The global trade system, is completely broken.
Very good news, now if they will just lower our taxes a little and couple it with the EPA decision today we could actually see some manufacturing increases here soon.
Look at the graph closely, There is a 5% difference. The savings in social welfare spending would more than offset the 5% difference. Man, what does it take to get free traitors to see the light. My God they would sell out there fellow Americas for a nichel.
. . .in other news
FEDERAL JUDGE BLOCKS OBAMA FROM IMPLEMENTING
DRACONIAN FRACKING RULES
DENVER — A federal judge agreed Tuesday to postpone the Obama administration’s tough new hydraulic fracturing restrictions just hours before they were scheduled to take effect.
U.S. District Court Judge Scott Skavdahl in Casper, Wyoming, gave both sides another week to submit arguments and citations before making a final decision on the request for a stay, which is expected July 22.
Four Western states — Colorado, North Dakota, Utah and Wyoming — along with two oil and gas industry groups had asked the court to delay the Bureau of Land Management rule slated to kick in Wednesday until their lawsuits could be heard. . .
http://www.washingtontimes.com/news/2015/jun/23/judge-postpones-obama-administrations-fracking-rul/
So Judas, you would continue to shut down factories and small towns for a nickel?? Wow.
Is that the cost of raw materials and energy ?
Lower taxes, regulations, get rid of unions and might be able to produce cheaper than China ?
The key to wealth formation is and always has been on access to relatively cheap energy.
Even FDR and New Deal realized that, when it came to bringing rural electrification to the homes and farms in those regions far from metropolitan centers. People do not know it, as apparently it is not being taught in schools anywhere, but in 1930, a large part of America had little or no electricity or telephone service, and the fastest way to communicate was the Ford Model T, and the local newspaper. Power was still by horse teams, or possibly an F-20 Farmall or GP John Deere, both rather clumsy machines, but by using twelve-cent-a-gallon distillate fuel, they produced food in such profusion that it became necessary for the New Deal brain trust to destroy large quantities of grains, livestock, and even some manufactured foods, then place quotas on the individual farmers limiting how much they could produce. Electricity on the farms allowed the farmers to dispense with most hired labor, as electric motors took over the chores of drudgery work, and the now unemployed farm labor were free to go off and enlist (or get drafted) in the US Military, the generation that fought World War II.
Total cost including labor.
Much of my work went to China, I understand the hidden costs more than most do and why it happened.
A nickel? try less than half a penny if you are GM, Ford or Chrysler.
Manufacturing Cost are low because we are not manufacturing anything!
In the most recent data, manufacturers contributed $2.09 trillion to the economy. This figure has steadily risen since 2009 when manufacturers contributed $1.73 trillion. The sector accounts for 12.0 percent of GDP.
Manufacturing supports an estimated 17.6 million jobs in the United States—about one in six private-sector jobs.
http://www.nam.org/Newsroom/Facts-About-Manufacturing/
“Bringing the regulatory costs and taxes down would lead to a boom.”
Add Unlimited Civil Liability to the costs brung down, and it would literally be a renaissance for manufacturing, and the American Economy, that could last generations.
IT would be better if Judas Iscariot was in charge of the economy than the current Benedict Arnolds.
“Brung” should be “Brought””
Mind fart today.
Well then, just WOW !
Government just needs to stay out of the way.
I truly don’t believe in the words “trade deficit” anymore after another FRiend explained it all to me. Just saying.
“Much of my work went to China, I understand the hidden costs more than most do and why it happened.
A nickel? try less than half a penny if you are GM, Ford or Chrysler.”
When the costs of regulation, compliance, liability, corruption, and taxes is more than the cost of shipping a container from Central China, sometimes by several factors, the business decision really does become a no-brainer.
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