If you care about manufacturing….

By February 10, 2006Taking It for Granted

Blog-Icon-MI.jpgEarlier today the Chief Blogger posted The Map. This is a map with the prices of natural gas around the world, showing the huge disparity in natural gas pricing. The United States is near the top of the heap, with some of the most expensive natural gas anywhere. This is particularly odd since, unlike Japan and some other industrial countries with lower priced gas, this country still has vast reserves of the stuff. Not drilling for it (and not importing much of it as liquefied natural gas) means that we have these spectacularly high prices. So who cares?

If you care about manufacturing, you would care a lot about this. That’s because in the debate over how much is being manufactured in the United States, we are sitting here today witnessing the outmigration of one of our greatest manufacturing sectors: chemicals. Their basic feedstock is natural gas and they simply can’t compete from the US when we have among the highest prices on the planet. An article about this some time ago in Business Week was entitled: “No Longer the Lab of the World: US Chemical Plants are Closing in Droves as Production Heads Abroad.” They thoughtfully put that article on page 80. My, oh, my. Page 80.

You’d think that a high paying, high-technology, innovative sector like this, with $500 billion in sales, would prompt our media, legislators and leaders to sit up and take notice. Even take action! These are the engineering, science and technical jobs that everyone wants more of in America. But alas, public officials seem to be in some kind of sleepwalk where they pay homage to this while doing virtually nothing. Chemicals are used throughout manufacturing. Yet 70 chemical facilities were closed here in 2004 and employment has fallen from over a million in 2002 to around 800,000. While there is often little we can do when overseas countries build up their own manufacturing, here is a case where a change in US public policy would have a positive effect on retaining this key manufacturing sector.

If you care about manufacturing, you will relentlessly bug your elected officials until they do something about natural gas prices. A big chunk of innovative manufacturing is at stake here. If we take it for granted, it will soon be gone.