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Higher Oil Prices Are Starting To Bring Jobs Home
penguin_dance notes a report up at ABC News that high oil and gas prices in the US may be moving jobs back home in a trend that some economists are calling "reverse globalization." It's becoming more and more expensive to ship finished product from other countries, so some companies are moving the manufacturing back to the US. The article hints that this trend may spill over soon to raw materials such as steel. One economist is quoted: "It's not just about labor costs anymore. Distance costs money, and when you have to shift iron ore from Brazil to China and then ship it back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour."
It would be nice if there was a favorable reaction to high fuel prices such as some manufacturing coming back home.
We can only hope that the trend continues.
Codifex Maximus ~ In search of... a shorter sig.
from my home to my office....when will my company start teleworking as an option!
But US jobs and stable prices despite the raising fuel costs is great news!
Recently I saw a show that visited Asbury Park in NJ, and it was stated that the slow decline of the park started with cheap airfares. It immediately struck me that this trend should now start to reverse itself, as travel costs are rising while consumer confidence is dropping.
High gas prices are going to have some bad side effects, but also quite a few good ones. Hopefully, reduced travel will be effected on almost every scale: suburbs will wilt and cities will grow stronger, local foods will become more popular, inefficient business travel will be replaced by online meetings, etcetera. I think most people who have wanderlust aren't going to let higher airline prices stop them, but perhaps they'll take fewer and longer trips in order to reduce expenses - e.g., instead of going to France and Spain on one trip, and the U.K. on another, they'll wait and take a longer trip to visit all three.
It less oil to use rail over ships to move iron ore and other big stuff.
my dad owns a drycleaning plant. steel hangers are one of his biggest supply expenses now. a few years ago a hanger might have been $0.10 or so, then 2 or 3 years ago it doubled overnight to $0.20, and a few weeks ago *that* doubled.
some of the larger hangers are 50 cents each. 50 cents for a metal coat hanger. he needs several hundred of these in a given week, nevermind the price of all the other supplies going up. it hurts, bad, and he has had to raise prices because of it (though not enough to actually cover the added cost)
By and large, language is a tool for concealing the truth. -- George Carlin
You won't get any more local steel production unless there are local manufacturers that want it or if it can be produced at internationally competative prices. Steelmaking is one of those things that is not labour intensive so nobody can honestly blame unions or cheap labour countries on the price of the stuff - it comes down to effective or ineffective management.
my dad owns a drycleaning plant. steel hangers are one of his biggest supply expenses now. a few years ago a hanger might have been $0.10 or so, then 2 or 3 years ago it doubled overnight to $0.20, and a few weeks ago *that* doubled.
some of the larger hangers are 50 cents each. 50 cents for a metal coat hanger. he needs several hundred of these in a given week, nevermind the price of all the other supplies going up. it hurts, bad, and he has had to raise prices because of it (though not enough to actually cover the added cost)
Perhaps your dad could provide a discount for customers who provide their own hangers.
they don't make steel in Pittsburgh any more. US Steel may be based here but most of the steel plants are no longer in the region. They make steel in Pittsburgh the same way they make cars in Detroit. Pittsburgh is mostly medical science and hospitals now. When industry comes back to the U.S. it will be in places that are less union friendly. (for the record, I do live in Pittsburgh)
In the 50's it was Japan,
In the 60's it was Hong Kong
In the 70's it was Taiwan
In the 80's and early 90's it was South East Asia
In the late 90's to now it has been China
To be worthwhile producing elsewhere you have to be able to produce for less than 30% of your home costs.
There is nowhere left to go
We have to manufacture our own again
So maybe we will get decent working conditions at last!
The memories of a man in his old age are the deeds of a man in his prime - Floyd, Pink
Sails can be helpful, I've seen models for tall vertical turbines that are independent of wind direction (not independent of wind, however). And my old friend the Stirling cycle engine could still be useful here - exploit the temperature differential by dipping the cold-side heat exchanger of the engine in the stream of running water. Would work on warm days, no acreage of solar panels required. You don't need a huge temperature differential for them to work, although it would need some form of low-drag integration into the hull. Maybe just a few square meters of copper integrated into the bottom of the hull, a black surface for the hot end topside. I like Stirling engines...no fuel, just a temperature differential, sometimes a bit slow to start up. Cool technology. http://en.wikipedia.org/wiki/Stirling_engine/
Do not mock my vision of impractical footwear
The problem with telecommuting is that your job is basically dependent on the quality of the IT staff to a much higher degree. My employer tries to do telecommuting, but somewhere between cost cutting in IT, draconian security restrictions, and a dodgy network connection, it fails to be useful for getting real work done.
We've been looking to move out of our high cost of living area for quite some time, but the rising cost of gas has put that on hold. I would like to buy a house - and can afford one on the edge of the suburbs, but alas, any saving in mortgage payments would be consumed by the cost of fuel. Even though I'm just a fifteen minute commute from work, I spend nearly fifty dollars a week getting there and back.
So yeah, it might bring some manufacturing jobs back home. But those of us who have become used to working in the city and commuting out from the cheaper communities are finding themselves in quite a bind. I can't afford a house in my current area, and I can't afford the gas to drive from the places where I can afford a house.
I'm slowly coming to the conclusion that I'm going to have to wait another 5 to 10 years for the next housing market crash before I'll be able to move into a house. When my Dad was my age, the loan on his (our) house was up - and he was a factory worker. Today, I make almost four times what he did, and can't even afford a three bedroom house. So much for the American Dream.
The society for a thought-free internet welcomes you.
From the summary: Distance costs money, and when you have to shift iron ore from Brazil to China and then ship it back to Pittsburgh, Pittsburgh is looking pretty good at 40 bucks an hour.
No it isn't if the alternative is (probably less than) 40 bucks per month.
True, handling and treatment of raw materials may be one of the first things to become cheaper when
handled in what I'll call "the west" as opposed to "the east", because huge quantities are handled
by relatively few people.
But what are we going to do with all those raw materials at home? They still need to be transformed
into consumable goods, which involves much more labour - cheapest done "somwhere else".
True, sea transport costs more than twice es much today than just a few years ago, but if you look at the
absolute numbers, it still is more or less for free compared to the worth of the shipped goods. There needs
to be at least another tenfold increase in shipping costs before businesses really start to feel it in
their manufacturing costs.
I know for a fact that it is (in quite a lot of cases much) cheaper to import presorted recovered paper
(for paper production) from China and India to Europe than to collect it and have it sorted in Europe directly.
Transport costs simply don't matter in that case.
This situation is changing at the moment - not because of higher bulk shipping rates, but because of developing
paper industries in China and India, consuming more of the recovered paper on the spot, thereby increasing prices for
the exported good "recovered paper". Interesting side effect: The shipping costs' percentage in the total price/weight is
therefore even decreasing.
Environmentalists have been hoping for high fuel prices, to encourage use of less fuel.
They weren't expecting the return of blast furnaces to Pittsburgh, however. So we burn a little less gasoline, and dump tons of coal and limestone in the steel furnaces.
Although high oil prices will force us to live more frugally and locally (probably a good thing in terms of the environment), the US has the small problem that its transportation infrastructure is designed based around the roads. Cars specifically.
A coherent bus network simply doesn't exist, Amtrak is a pathetic mess, and Americans (white people, specifically*) hate the concept of public transport.
*I hate to bring race into this, but for whatever reason, it's more or less a heavily recurring trend that, outside of big cities, white Americans don't use public transportation. I'm white, in my 20s, and take the bus to work every day. It's an extremely rare situation to spot somebody from my own demographic on the bus that isn't also homeless.
-- If you try to fail and succeed, which have you done? - Uli's moose
Perhaps you missed the part where the libs, enviro-whackos, and "intellectuals" lobbied successfully against building any new reactors.
Why the hell should anyone research nuclear power generation technology when there was no way to build them and recoup the research costs?
You guys fucked it up big time in the 80s by shutting down nukes. Now you are all shitting bricks over "climate change" (not Global Warming anymore, is it?...at least not for another 10 years)
So the one thing that could have averted the latest end-of-the-world scenario is dead in the water because of a previous end-of-the-world scenario.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
On December 12, 1952 a combination of mechanical failure and human error led to a now-famous power excursion and fuel failure in the NRX reactor at AECL Chalk River Laboratories. At the time NRX was one of the most significant research reactors in the world (rated at that time for 30 MW operation), in its sixth year of operation.
During preparations for a reactor-physics experiment at low power, a defect in the NRX shut-off rod mechanism combined with a number of operator errors to cause a temporary loss of control over reactor power. Power surged ultimately to somewhere between 60 and 90 MW over a period of about a minute (the total energy surge is estimated to be approximately 4000 MW-seconds). This energy load would normally not have been a problem, but several experimental fuel rods that were at that moment receiving inadequate cooling for high power operation ruptured and melted. About 10,000 Curies of fission products were carried by about a million gallons of cooling water into the basement of the reactor building. This water was subsequently pumped to Chalk River Laboratories' waste management facility, where the long-term ground water outflow was monitored thereafter to ensure adherence to the drinking water standard. The core of the reactor was left severely damaged.
This accident is historically important, not only because it was the first of its type and magnitude, but also because of its legacy to Canadian and international practice in reactor safety and design. Nobody was killed or hurt in the incident, but a massive clean-up operation was required that involved hundreds of AECL staff, as well as Canadian and American military personnel, and employees of an external construction company working at the site. In addition the reactor core itself was rendered unusable for an extended period. Environmental effects outside the plant were negligible, as was radiation exposure to members of the public. The health record of AECL and Canadian military personnel involved in the clean-up was scientifically reviewed in the 1980s (no significant health effects were observed).
Several of today's fundamental safety principles of reactor design and operation stem from the lessons learned at this formative stage of Canada's nuclear program, making Canada an early leader in this field. Among these were:
The accident also demonstrated that, due to a combination of redundant safety features, emergency procedures, and a level of inherent "forgiveness" (or robustness) in the technology, a major fuel-melt accident in a nuclear reactor can occur without significant environmental effects and radiation exposure to the surrounding population.
The NRX core was completely rebuilt, improved, and restarted within 14 months following the accident (the first time something like this was attempted), and the reactor continued to perform for another four decades before being retired.
As with the analysis of the accident itself, the clean-up and re
Ok I'll bite.
Nuclear power, even when considering the one nuclear meltdown that we have had and all the deaths caused by it, has resulted in less deaths than any other form of power generation per MWh generated. Including wind and solar.
Secondly, Nuclear power in the only baseload power source which does not release significant amounts of CO2. If you believe that we need to reduce CO2 emissions significantly in the next few years to avoid catastrophic anothropogenic global warming, then Nuclear Power is your best currently available option.
Thirdly, Uranium is one of the most abundant materials in the earths crust - though it does cost quite a bit to extract. We have known reserves that will last us quite some time (though the same is true for coal).
Lastly, we are currently in the third generation of nuclear power plants, which now in the event of an emergency automatically shut down. i.e. it requires individuals to be pushing buttons to keep the reactor running and in a "dangerous" mode. If human intervention stops, the reactor ceases being dangerous (well excluding the radioactivity danger present in the fuel itself).
The problem with nuclear power is threefold - public perceptions (generally from irrational fear), high water usage and high long run marginal costs. Canada and France have shown us that nuclear power can provide a significant amount of baseload power relatively safely.
And then please bring back the navy patrols, the destroyers and the thirty-dozen-vessel-convoys. Because with the world today, you'd have so much more to worry about than some Nazis in slow U-Boats trolling the Atlantic. And no matter how fast that ship would be, radio transmissions within the enemy navy are faster.
One captured nuclear vessel could power a substantial part of most rogue state's economies all the while producing dirty bomb material or worse. And a small bomb hidden on the reactor could bring so much Allahu Ackbar to our ports it's not funny anymore.
So you'd better have a carrier battle group defending the thing OR an undocumented remote self-destruct mechanism, so you can wipe out the entire environment of whoever captures such a vessel. But then again, our own people might be a bit uneasy about these perceived future Chernobyls, whether that is reasonable or not.
With the world what it is today, these things would be efficient transport vessels AND readymade sea-going, self-propelled dirty bombs with free access to hundreds of large cities anywhere.
Thank you, but with some peaceful religions around, a ship like that is certainly not halal.
Guess what's different from 1999...
- the US dollar is worth ~40% less than it was in 1999
- there are over 2 billion people whose economy, and therefore demand for energy, is surging.
- there is an oil supply graph that, rather than increasing every year, has been roughly flat for the past three years (not coincidentally, the time when the price has skyrocketed)
Oil, in our lifetimes, is a finite commodity. It has an energy return on investment higher than anything else out there right now. There is still a lot in the ground, which is to say, we're not going to run out any time soon. But we have skyrocketing demand and a constrained supply. In the past, high prices have led to exploration and increased production. Well guess what. The large deposits of easy to retrieve oil have been found. We've reached a point of diminishing returns. Oh, there's still a lot of oil. The Saudis continue to pump almost 10 million barrels of it a day, more or less the same amount they've been pumping for the past 5 years. But in that time, they've been bringing new drilling projects online, in order to make up for declining production out of their old fields. And their oil exports have dropped by over 10% in just the past 2 years, due to increased domestic demand from a booming economy.
You can tell yourself it's all speculation, if it makes you happy. But the supply of oil to global markets is no longer increasing, while demand remains high, globally. And there are a whole lot of people in Asia who will gladly buy any oil that we don't.
I think people forget that this is not the first time people have been looking for a new fuel for industrial purposes.
Up until the 1850's, lighting lamps were fueled by whale oil, and with the rapid decline in the whale population even by then there was considerable concern about what to substitute for whale oil. The discovery of using kerosene derived from crude oil about this period changed all that, and that was the foundation of the oil industry as we know it today.
Today, rapid changes in technology could make gasoilne obselete as a motor fuel within the next 20 years. The most important announcement was MIT's announcement of research into high-energy supercapacitors using carbon nanotubes back in 2006; that may just open the way for a drastic reduction in the size of the battery pack needed for a battery-electric vehicle (BEV), making it possible for a practical electric car that could carry four passengers in comfort yet go up to 400 km (248 miles) or more on a single charge, and the charge time for the battery pack would be a tiny fraction of even Li-On battery packs.
That same technology could make it possible to have electrical storage units from home size to city size that could provide power after being charged up by a solar cell array or wind turbine array. I can imagine a single house with a sun-facing solar cell array (now much cheaper thanks to nanotechnology) that provides power during daytime and charges a supercapacitor electrical storage unit for use at night.
In short, I see within 20-25 years most homes and apartment complexes with cheap solar arrays on their roofs and supercapacitor electrical storage units somewhere in the building.
Your sarcastic reply neglects to mention that most Americans are free to move around the country to find the jobs in their field, but most Americans aren't free to immigrate to India or China or Malaysia to keep their job.
As long as labor can't flow as freely as jobs can, there's a place for tariffs.
It doesn't hurt to be nice.
Yes. OPEC will decrease production soon. They will do this to keep prices high. They will also do this because they have no choice.
Currently only Saudi Arabia has any excess oil production capacity, and even this is illusory: most Saudi "spare capacity" is 'sour', high-sulphur-content oil that no one especially wants; the rest of Saudi "spare capacity" can only happen if they squeeze the Ghawar facility harder, which will cause (has already caused!) a reduction in ultimate recoverable in that basin.In other words, if Saudi Arabia increases production in 'sweet oil' they risk slitting their own throats by destroying their production capacity. Oil extraction works that way.
Yes, OPEC will certainly decrease production. All the more reason to abandon oil-based systems, the sooner the better. It's a pity this will result in billions of human deaths.