DALLAS — You would think that the terms “insourcing” and “reshoring” would be all over the media, social networks and on everyone’s tongues like the latest word-aday calendar after this long slog through economic recession.
Exciting words backed by studies from MIT and Boston Consulting Group, and yet, where’s the buzz?Could the media’s reticence have something to do with the fact that America’s jobs are trickling back thanks to the shale gas boom that would not be possible without fracking?
The MIT Forum for Supply Chain Innovation conducted a survey of 340 manufacturing companies in 2012, and found that 33.6 percent are considering and 15.3 percent are definitely planning on bringing manufacturing operations back to the U.S.
Boston Consulting Group (BCG)’s 2012 survey of American manufacturing companies similarly reported that 37 percent of respondents with annual sales above $1 billion and 48 percent with sales above $10 billion said they are planning or actively considering shifting production facilities from China to America.
And, the cherry on top: a 2013 Deloitte study of found that 76 percent of companies who had brought IT operations back to the U.S. are either satisfied or very satisfied with their insourcing programs. None reported complete products, right here at being dissatisfied with their decision home.
to insource. We’re already seeing how this plays
In fact, the Reshoring Initiative, an out in the chemical industry, which is organization that helps companies the largest natural gas-consuming assess where to manufacture their industry in the U.S. Natural gas liqproducts, estimates that 50,000 jobs uids are such important feed stocks in have returned to the U.S. in the last chemical production that domestic three years, accounting for 12 percent chemical production is expected to of the total U.S. manufacturing jobs increase annually by 7.8 percent added since 2010, according to Bureau through 2020 as a result of the of Labor statistics. increased supply.
This will translate to
Among those companies bringing at upward of $80 billion in chemical least some of their production back to industry investment over the next 10 the U.S. are Whirlpool, Rolls Royce years, resulting from increased pro-Aerospace, Siemens Gas Turbines, duction of shale gas.
General Electric, Apple, Caterpillar The chemical industry is just one and Ford. example of the many industries that
But that figure of 50,000 jobs stand to benefit from America’s shale returning to the U.S. since 2010 is not gas boom. The accountancy firm the one that should be getting Ameri- PricewaterhouseCoopers expects the cans excited. lower U.S. energy prices to drive 1
The truly thrilling number is 5 mil- million more manufacturing jobs to lion, as in BCG expects “reshoring” the U.S. as companies build new fac-— also known as insourcing and tories here.
onshoring — to drive 5 million more Where’s the Ticker Tape Parade for jobs to the U.S. by the end of this Fracking?
decade as the cost of manufacturing You’d think that all of this would certain goods for the American mar- lead to greater support for the oil and ket will become as cheap here as in gas industry, but opposition to frack-China. ing seems to be keeping regulators
Chinese labor costs have risen as from recognizing the net positive American wages have fallen or effect of fracking.
remained static, while oil prices have Greenhouse gas emissions have risen and natural gas prices have fall- fallen, according to the EPA, at the en, making manufacturing on Ameri- same time that U.S. crude oil produccan soil a more attractive option. tion is at its highest in eight years and
As more companies bring produc- natural gas production has surpassed tion to the U.S., it will create a healthy its 1973 peak. How can that be?
“ecosystem” for the manufacture of According to the Department of Energy, “The decline in coal-related Oil and Gas and Breitling Royalties, emissions is due mainly to utilities which he also founded and serves as using less coal for electricity genera- CEO. The companies are in the oil and tion as they burned more low-priced natural gas exploration, production and natural gas.” investment business. Mr. Faulkner’s
That’s a mathematic equation sure diverse and extensive background in the to make the anti-fracking folks’ heads oil and gas industry in North America, explode: Fracking to produce more Europe and the Middle East covers all natural gas both reduces greenhouse aspects of oil and gas operations, gas emissions and is a key driver in including project management, producbringing desperately needed manufac- tion, facilities, drilling and business turing jobs back to the U.S. development. Mr. Faulkner serves as an advisor to the ECF Asia Shale.
Faulkner is the Founder and CEO of Dallas-based Breitling Energy Companies- sits on the Board of Directors , the holding company of Breitling for the North Texas Commission.