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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 should be bringing nuclear wessels. With the cost of oil to fire a ship being what it is, the Savannah would have been competitive back in the 70's. The only problem to solve is that high seas piracy still exists and the US government doesn't want the nebulous "bad guys" to steal a nuclear wessel and reuse its atomic fuel for something nasty.
Javascript + Nintendo DSi = DSiCade
"The 163 pounds of uranium she consumed is estimated to have provided the equivalent power of nearly 29 million gallons of fuel oil."
That just put everything in perspective. Holy hell. For the amount of money you saved you could hire a small army to arm your vehicle. US Government could nationalize some ships.
29 million gallons of fuel.
Damn. Just Damn.
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
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.
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.
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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.
Oil was $10 a barrel in 1999.
That's down from $34 in 1982 (about $80 in 1999 inflation-adjusted dollars).
http://www.ioga.com/Special/crudeoil_Hist.htm
Why would the saudi's sell oil for $10 when they could sell it for $34?
Because they can't.
Every day this goes on, the longer oil prices will be low.
Every day, more people start carpooling, move closer to work, replace a 13mpg truck with a 31mpg (or higher) car, start riding public transportation, start working from home 2 days a week, start working 9/80 schedules.
My morning commute is now consistently 5 minutes faster in the morning and 15 minutes faster in the evening because the number of cars on the road has dropped that much.
Already, Iran is stacking up tankers because their online storage tanks are full.
Already our national gas usage is down about 4% in one month.
The current prices are caused by speculation. The same bubble of excess wealth passing through it that passed through the stock market in 1996-2000, housing in 2002-2005, and commodities now. The true "last barrel" cost of producing oil right now is about $50 a barrel. Everything over that is excess.
Once demand drops like a stone, then the oil companies STILL have to pay the bills. A lot of them are spending money like water. A very few of them are investing the current profits wisely.
They will sell oil to whoever will buy it- because just like the average salaryman in the U.S., they are just a couple paychecks from being homeless.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
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.