The collapse in the price of natural gas and the automation of labor in factories are two factors poised to return America to its glory as a manufacturing powerhouse for the world.
Thanks to an extraction technique known as ‘fracking,’ we will be the dominant producer of natural gas in the world for decades to come. About 60% of Americans use this clean-burning fuel to heat our homes and to cook with. But it will also fuel massive amounts of manufacturing in the United States.
Part of my excitement about natural gas stems from the export possibility. Our natural gas can be frozen into LNG and exported via terminals to places around the world where it sells for 4-5 times what it does here.
I believe we are the Saudi Arabia of natural gas. The best guess is that we’ve got enough of this stuff to handle our energy needs for the next 100 years and that’s only the beginning. From what I’ve read, the natural gas boom and resulting industry will create 3 million jobs by the end of 2020.
But manufacturing is completely different now than it was 20 years ago. The equipment is very often sophisticated and automated. So a factory that may have required 1,000 people in 1992 today is able to put out the same amount of goods with only 75 people on staff.
That one-two punch will make us more efficient than the lowest labor cost countries in the world including mainland China! While we won’t have the same amount of jobs we used to because of the automation of manufacturing, it will nonetheless create national wealth.
For years and years, we sent money overseas by buying cheaply made foreign goods and consuming foreign oil. But now we have a chance to right that ship.
So while some folks are getting ready to write our national epitaph, thanks in no small part to a highly dysfunctional Washington, we have so many capitalist and technological fundamentals working in our favor that we will do just fine — in spite of the politicians!