Natural Gas Boom Is Attracting Manufacturing To The US From Overseas

In the wake of the American shale gas boom and the resulting cheaper power, U.S. manufacturers have been moving their work back home from overseas, and now foreign manufacturers, especially from Europe, are moving their facilities to the U.S.

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While prices in the U.S. power market have fallen due to cheap natural gas, prices in Europe’s power market are much higher, lifted by subsidies for renewable wind and solar power projects. European utilities have been decommissioning thousands of gigawatts from turbines in an effort to minimize losses.

One of the latest examples of a European company moving its manufacturing to the U.S. is Germany’s Siemens AG (FRA:SIE), which supplies equipment to companies that extract and ship natural gas, converts the fuel into power, and uses electricity on a large scale for manufacturing.

"Even though we have already missed a few opportunities, especially in unconventional oil-and-gas exploration, we still have excellent market-entry opportunities, especially in North America," Siemens CEO Joe Kaeser said at a news conference on Wednesday.

On Tuesday, Kaeser named former Royal Dutch Shell PLC (LON:RDSB) strategy head and American Lisa Davis as the new chief of the power business for Siemens. She will work from the U.S, a first for Munich-based Siemens, the Wall Street Journal reported. Siemens competes with Conneticut-based General Electric Co. (NYSE: GE).

Germany’s BASF SE (ETR:BAS), the world’s largest chemical company, announced this month it was considering building a $1.4 billion plant in the U.S. to convert natural gas into propylene, used in many petrochemicals.

Austria-based steelmaker Voestalpine AG announced plans last year to invest more than $760 million in a Texas plant, motivated by inexpensive shale gas.

While a decade ago, American manufacturing jobs were flowing to China, this year, more than 50 percent of $1 billion-plus U.S. companies with operations in China are considering moving all or part of their production back home, according to Boston Consulting Group. For example, Wal-Mart Stores, Inc. (NYSE: WMT) plans to move about $50 billion in manufacturing to the U.S.

According to the National Association of Manufacturers, the exodus is due to high Chinese energy prices compared to America’s, escalating wages in China, lack of protection for intellectual property, air pollution and land prices.

The liberals will hate that.

Boy, Obama has to speed up his environmentalist take down of fracking.

The liberals will hate that.

So will some Freepers who think we can only have jobs here if we have high tariffs and other protectionist policies…..because they can't get it thru their heads that if economic conditions are simply right, manufacturing will come back.

Shipping it to the EU will solve the problem of manufacturing returning in short order.

economic conditions are simply right, manufacturing will come back.

It takes more than economic conditions it takes a nurturing government not a anti business dictatorship like we have now.

North America is an energy colossus. Cheap, plentiful energy is the key to explosive economic growth.

So let’s talk investing; gold mining profit was made not on the gold itself in the gold rush, but on accommodations, tents, pickaxes, shovels, hats, boots...

In fracking, all the mobile home manufactures are private (unfortunately); what companies have nice moats around them and supply things like drill bits, and similar supplies? I was tracking CVCO, which was doing nicely. Anyone have any ideas?

US needs to make a strategic decision. If we keep NG/Oil at home we will have the most cheap energy source to power our factories and cars, or we sell it to the world who needs this badly. Right now the world buys NG at $ 12 to $ 15 per 1000 BTU. US consumers buy it at $ 4 to 5. If we export our NG that world price will drop but our domestic prices will rise to about $ 9 to $ 10. Here is the trade off. Higher prices means US may have a trade surplus in energy and tax revenues to help our gov pay down our debt/finance our military and political power against Russia and China. But it comes at a cost to the middle class as domestic prices will rise. On the other hand if we keep NG home we get low prices for factories and consumption, but we must find a way to balance our gov deficit which will eventually hold down US military and economic power. Both approaches have its trade offs and great implications to our future.
If you want nonentanglement, keep NG/oil home and power the middle class and industries and find a way to deal with the gov deficit over time. Under this scenario, the US cannot play empire till the deficit is squared away.
Sell the NG/oil overseas, fed gov will have a new revenue stream that can be used to pay down our debt, thus preserving US world power status, but the middle class will pay higher energy costs and temptation by neocons to play empire America. Thats my 2 cents in this matter.

"There was a natural gas boom in Algebra class late Monday afternoon after they served tacos in the cafeteria. BOOM!"

sorry....

Can’t have this. Obama is right now looking for ways to add regulations to fracking. Got to shut all this down in his mind.

The only fly in the ointment is that with the Russians supplying significant portions of the natural gas used in Europe, there comes a question of energy hegemony and influence. Europe, imho is going to have to develop enough of their own resources or import from other sources in order to retain any of their independence from that influence.

I think we’ll end up with a mixture, but I’d like to see manufacturing come back to the US, and for all the enviros griping the standards here are high enough.

That way, energy costs here would be kept lower while more of the middle class would be back to work.

Absolutely. The Liberal/Eco-Freak Anti-business Anti-Progress
establishment will put their efforts into overdrive to quash this. Anything that actually creates private-sector jobs and helps regular Americans lower their energy costs is to be nipped in the bud.

NY’s Cuomo has done his duty for Obama...no fracking here!!

Obama continued....”how do we tax that stuff....and how many folks do we have to hire to oversee these drilling “idiots”.

The liberals will hate that.
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True but they will take credit for the increased revenue that it brings to government and if the new money threatens to balance the budget—which it will —they will fund new spending projects.

Boy, Obama has to speed up his environmentalist take down of fracking.
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He’s managed to pretty well kill all new drilling on federal lands.

Right now he can’t do this on private lands where all the activity is taking place.

Shipping it to the EU will solve the problem of manufacturing returning in short order.
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Agree that there is rising demand for natural gas.

But supply is rising even at current prices and falling drilling. The drillers have shifted over their emphasis to liquids but even the liquid wells pull up natural gas. a lot is flared off but some contributes to rising supplies. The amount of natural gas coming out the marcellus formation in pennsylvania is just huge and growing.

I don’t really know what to make of this. Because if supply is as big as some seem to intimate — then it can easily absorb excess demand for a couple decades. That’s all that really needed. Why? because a couple decades from now there’s likely to be a couple of energy revolutions that will moot this discussion

NY’s Cuomo has done his duty for Obama...no fracking here!!
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Yeah I’m amazed by that. Those people could easily go over the border to Pennsylvania to see with their own eyes the effects good or bad on Pennsylvania.

But they don’t.

Or if they do, they believe their eyes are lying and the liberal hymn is true because to believe the liberal hymn was not true would be too awful to contemplate. It would be like either all of the bible is true or none of it is true.

Natural Gas Boom Is Attracting Manufacturing To The US From Overseas To Take Advantage Of Cheaper Fuel, Feedstock