Is fracking creating a ‘manufacturing renaissance’ in the U.S.?
Is fracking creating a ‘manufacturing renaissance’ in the U.S.?
The technology known as “fracking” or hydraulic fracturing has environmentalists deeply concerned with groundwater pollution. Then there’s the effect on global temperatures of burning the resulting fossil fuel.
But is it possible that America’s new energy boom could bring factory jobs back from overseas? Chris Farrell, Marketplace’s economics commentator, has been considering what some see as a new manufacturing boom in this country. He says that when it comes to companies deciding to move more production to the U.S., “there’s definitely a trend in the making.”
“I think something new is going on. It’s a sticker shock,” Farrell says, on why the U.S. suddenly looks more appealing to manufacturers. “The price of natural gas has gone down — it’s the fracking boom. And an unexpected side effect of the fracking boom is a manufacturing renaissance.”
Farrell says the U.S. has the potential to recapture significant production that has been farmed out to other countries in a globalized economy.
“The Boston Consulting Group — they’ve done a bunch of research in this area — and they’re arguing that if you take the U.S. cost advantage in labor and energy, that the U.S. could end up capturing $70 billion, $115 billion in annual exports from major manufacturing nations that are our competitors,” Farrell says. “What is underpinning it is cheap energy and stable energy supplies and an uncertain global economy.”
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