Skip to comments.Manufacturing Is Fueling America's Recovery
Posted on 05/31/2013 8:10:38 AM PDT by thackney
Whoever said the days of American manufacturing were over spoke too soon. America's manufacturing days may have stalled for a period, but they are far from over. I see many good days ahead for our nation and manufacturing, but it will take work and the cooperation of government and business to make it happen. Advances in shale development have changed the picture. Today, supplies of oil, natural gas and natural gas liquid (NGL) from shale, once thought unobtainable, have led to record-breaking volumes of fuel and raw materials that will rewrite our future.
While attention has primarily focused on the ability of newly-tapped oil deposits to guide the country toward a future of energy independence and national security, there is a larger story to tell. Businesses and consumers are seizing upon the abundant supply of shale natural gas as a cheaper source of energy. But what is also occurring, primarily under the radar, is the narrative of how NGL is transforming the nation's manufacturing sector.
You may recall from a past chemistry class that NGL is used to produce petrochemicals, which is the feedstock, or building blocks, used by manufacturers to produce consumer goods and plastic products. Petrochemicals touch the average person multiple times just in getting dressed in the morning. Shampoo, soap, toothpaste, deodorant, combs, blow dryers and clothes are just a few modern conveniences made possible as a result of petrochemicals. Increased production of NGL is behind the $80 to $100 billion in planned investments by the petrochemical industry and will help revive communities that lost their manufacturing base decades ago.
A little historical perspective, beginning in the 1970s: higher costs for raw materials and labor, among others, were significant factors that prompted many American manufacturers to move their operations overseas in order to remain globally competitive. But new supplies and availability of raw materials has shifted in our favor and manufacturers are looking at the United States once again. Today, due to the cost advantage of energy and raw materials, and manufacturing facilities and infrastructure already in place, many companies are beginning to move their operations back within our shores.
In Youngstown, Ohio, for instance, V&M Star is building a $650-million steel mill 34 years after the iron and steel industry left the region. Just last year, General Electric began building appliances previously made in China and Mexico in its long-deserted Appliance Park manufacturing plant in Louisville, Kentucky. Nucor Corp. is opening a new plant in Louisiana this summer. In Houston, Texas, the number of employees in the manufacturing industry has increased from 165,000 to 250,000 since 2009, as companies grow to keep up with the demand for parts needed in the hydraulic manufacturing process. These are just a few examples of the millions of dollars in planned investments as a result of the increased availability of natural gas and NGL.
But there's more to be done if we are to truly capitalize on the full potential of an American manufacturing renaissance. Important factors to consider include infrastructure, labor and regulatory roadblocks. Although we already have much of the necessary infrastructure in place to convert raw materials to feedstocks and materials that manufacturers use, more is needed to connect the new sources of raw materials to where they are needed for manufacturing.
Without the right infrastructure in the right places, manufacturing as a whole is inefficient, and companies find it hard to be competitive. While the U.S. already has a tremendous head start on this front, many of the raw materials manufacturers need today are located in previously-untapped areas of the country. This geographical shift has created "bottlenecks" in the movement and storage of raw materials. New infrastructure such as storage facilities and pipelines are needed to create a more efficient process. Once that infrastructure is in place and existing structures are upgraded, the manufacturing supply chain will get a much-needed boost.
The labor piece of this puzzle faces similar obstacles. As manufacturers return to the U.S., they are facing a shortage of workers with the skill set needed to work in the industry and to build out the infrastructure. Yet that is changing, too. Efforts are underway to educate and inform a new generation of manufacturing workers about opportunities in the industry.
Our government will play an important role in the return of manufacturing and the jobs it will create. Responsible development of shale reserves can make the U.S. a global leader in energy production and at the same time, a manufacturing powerhouse. But excessive regulation will have a detrimental effect on the industry's growth. Regulations should be based on science, technology, and real-world practices. Moreover, an efficient permitting process - one without onerous complications - is needed to ensure future progress.
I believe that America's best manufacturing days are ahead of us. Newly-discovered shale formations are ushering in a new era in the way everyday consumer products are produced in this country. The growth seen already in places like Texas, Ohio and Kentucky are prime examples of how the manufacturing industry is fueling economic recovery. This country is turning a corner - one that is vital for future American prosperity. Let's allow it to proceed.
Charles Drevna is president of American Fuel and Petrochemical Manufacturers.
I’m glad to see it back!
And you can bet your bottom dollar that they want somebody else to train them.
Looking forward to seeing “Made in the USA” on everything I buy.
With the massive industrial exportation of US jobs to other third and forth world countries, I am wondering why now a representative of the oil and former manufacturing industrial complex is so up beat on America’s outlook.
Could it be massive government infusion of training dollars, coupled with in-kind ‘contributions’ to Obama’s ideological transmogrification efforts?
Could it be an excuse to put to use 11 million newly citizenized ‘Americans’ previously here illegally?
Or, could it be just another in a long line of Green Energy, Traditional Energy, Infrastructure, and good-sounding sinkholes that have befallen this administration since it’s ignominious inception?
Color me very dubious at the prospect.
What percentage of this manufacturing surge is related to firearms?
People can believe what they want about the future, but what we know for sure is that the DOC's totals for US manufacturing--
--is at an all time high.
“There is a Providence that protects idiots, drunkards, children and the United States of America.”
Otto von Bismarck
Just when we think that our government has destroyed our economic vitality with taxation, regulation and welfare dependency; when we think the American people have lost their competitive edge, God grants us the know-how and ingenuity to tap into this energy boon to keep us going. It’s really amazing when you think about it.
Increased production of NGL is behind the $80 to $100 billion in planned investments by the petrochemical industry and will help revive communities that lost their manufacturing base decades ago.
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We have had several articles here at FR on new plant expansions due to the increased feedstock for the plastic industry. Much of it related to gas shale production.
You can bet your next-to-last bottom dollar that any government-sponsored training will be designed and reserved for those already on welfare or “in the system”, and those who are just scraping by on odd jobs or savings and not collecting unemployment or welfare checks will be turned away.
Oh come on..., manufacturing? We don’t need manufacturing.
Those jobs are antiquated. We now have information jobs.
Why this is a scandal of gigantic proportions.
Heads must roll!
Anyone holding a manufacturing job should be arrested and executed. It’s just unAmerican. And whoever hired them deserves the same. And whoever took their money, why them too! We’ll get you my darlings, and your little dog too.
Unfortunately, that infrastructure includes machine tools manufactured outside the United States and N. America.
Yes, close your eyes, cross your fingers and really, really hope, really hard. See, it's there.
Adjusted for change in the value of a dollar?
And how much of this is a consequence of the $85 billion infusion every month?
Also, there is a lot of manufactured parts that come into US as sub assemblies. assembly is only part of the manufacturing total.
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He's upbeat because energy costs are really low. Did you even read the thing?
Although I doubt that statement, how does the reason for new purchases change the value of new purchases?
much of this is a consequence of the $85 billion infusion
a lot of manufactured parts that come into US as sub assemblies
show adjustment for deflated (inflation)of US currency
So mortgage securities means no manufacturing? Deflation means overestimating? Hey, I have to pay attention to actual numbers whether they're good or bad because that's what business is like, but anyone here wanting bad things for America's doesn't need to grasp at straws because belief is simply a matter of choice.
There you go. Another story to vouch for the fact that manufacturing in the United States is evil. It sure has hurt China too... :^)
So what you’re saying is that the United States couldn’t have benefited from additional business and employment over the last twenty years.
Well thanks. I sure didn’t realize that.
Look at what manufacturing has done for China. And quite frankly, we became China’s number one cash cow.
So you tell me, which nation did grow faster during the last 20 years?
And while you’re at it, are you aware that the United States has 40 million fewer employed citizens than it should have right now?
Thankfully, according to your figures, we have a very robust manufacturing situation in the United States didn’t lose one job.
40 million unemployed, and another 40 million underemployed. You numbers aren’t worth s—t!
Germany's manufacturing is some of the most advanced and productive in the world. They didn't lose millions of jobs to Red China.
What are you paying for gas and electricity?
I guess you’re thinking all the manpower will
come from all the college grads that can’t find
Abundant, inexpensive, reliable energy is key to our prosperity. But an intrusive government, such as we have today, can kill that prosperity.
We, The People, need to reign in this government to ensure prosperity for our posterity!
They didn’t choose to. We did.
That’s basically it.
Our cities are decaying, and their cities are seeing the biggest booms in China’s history.
Don’t dare say manufacturing had anything to do with it. That can’t be it. /s
We, The People, need to reign in this government to ensure prosperity for our posterity!
And that is the full story of the last five years, isn't it?
And what happens over the next 3 1/2 years will determine whether We, The People have succeeded.
There is no point in manufacturing anything in the USA or Europe when a third world peasant in Asia or SA can do it instead. The sooner we ditch all of our manufacturing and send it to Asia and train the newly unemployed to be neurosurgeons and scientists the better.
You’re quite the sage. Despite the United States being 40 million jobs short for it’s citizens, you want to send more jobs overseas.
This idea has been tested, and found to be the worst single idea in our nation’s (jobs related) history.
No other idea has cost us more jobs in less than one generation.
In the twelve years ending in January 2013, the United States added just over 2 million jobs. On average we add at least 21.5 million over that period of time.
Now, what else happened during that period. Well we sent tens of millions of manufacturing jobs overseas, China’s economy grew by leaps and bounds as we set up a cash pipeline to it.
And what happened to our economy? Can you remember?
We have 40 million fewer buyers in this nation. The purchasing power of 40 million citizens has been eliminated. That also means the government has 40 million fewer people paying taxes. Our states and local communities have suffered due to the lack of tax income. And yet you gain nothing from that fact.
Sheesh! What will it take for you to see the truth of this?
Okay, I’m sorry I didn’t realize you were kidding.
You don’t know how many countless posts I have responded to since around 1995 on, when I realized that our government supported sending manufacturing jobs overseas, and started to speak out against it.
Yours looked like just another one of those.
I already said that I think our energy prices are too high, but that they are a relative bargain to Europe's. I don't understand at all what point you're trying to make.
I got your reply to my # 30. To my knowledge I posted nothing to after that.
This most recent reply of yours was to the same post. ??????