Noon: America needs to use more energy, not less
During the 2016 election, both candidates promised to bring manufacturing back to the U.S.
“The rhetoric,” reports U.S. News & World Report, “has struck home with Americans across the country — particularly those currently or formerly employed in the embattled U.S. goods-producing and manufacturing sectors, who have repeatedly borne the brunt of corporate efforts to move work overseas.”
Harry Moser, founder and president of the Reshoring Initiative, which aims to bring manufacturing back home, is optimistic. He told me: “We’ve gone from losing somewhere around 200,000 manufacturing jobs a year in 2000 to 2003 to net breaking even. Balancing the trade deficit will increase U.S. manufacturing by about four million jobs at current levels of productivity”
While there are many factors driving offshoring, lower wages give countries like China and Mexico a competitive advantage. Energy costs, however, give the U.S. an advantage as “manufacturers need a lot of energy to make their processes work,” stated Gary Marmo, director of sales for New Jersey’s Elizabethtown Gas. He says: “A typical office building will use 5,000, 10,000, 20,000 therms a year. A good sized manufacturing plant will probably use that same amount in just a couple of days.” Electricity frequently represents one of the top operating costs for energy intensive industries such as plastics, metals, chemicals, and pharmaceuticals — and, according to a recent study comparing costs in the U.S. and China, electricity is about 50 percent higher in China.
Because manufacturing is energy intensive, bringing industry back to the U.S. will increase our energy consumption.
President Obama has derided U.S, energy use: “The U.S. uses far more electricity than its North American neighbors combined,” but the U.S. also does more with our energy. Comparing the Gross Domestic Product and energy consumption numbers for the U.S. and Canada, for example, both use a similar volume of energy but the U.S. has substantially higher GDP. A study of global energy consumption versus GDP found: “energy is so intrinsically linked to GDP that energy policy more or less dictates how our economy performs.”
Mike Haseler, the study’s author, explains: “rising GDP is an indication of a prosperous economy” — which is why economic commentators cite GDP numbers when they say: “President Barack Obama may become the first president since Herbert Hoover not to serve during a year in which the growth in real GDP was at least 3 percent.” Yet, in the name of climate change, through government policy, many countries are trying to discourage energy use by forcing costs up. Haseler states: “They are cutting energy use as the economy of Europe collapses because European industry can no longer compete with countries where energy prices are not artificially raised by senseless ‘green’ policies.”
If we can bring back manufacturing jobs — or at least stem the flow of them from our country — we need to be encouraging low-cost energy and making more of it available. Moser believes: “balancing the trade deficit should be the No. 1 national priority.” He told me that would take a 25 percent increase in manufacturing — which would require about a 10 percent increase in energy usage. Yet, climate change policies demand that we take greater cuts than the developing countries like China and India. If our energy costs continue to go up, we’ll lose the best competitive advantage we have.
To bring manufacturing back to the U.S. we need energy that is abundant, available and affordable — and we’ll need to use more, not less. If we want to balance our trade deficit, boost GDP, and have a prosperous economy, energy is the key. Which is why I say: “Energy makes America Great!”
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy. She hosts a weekly radio program: America’s Voice for Energy — which expands on the content of her weekly column.