Abundant and Affordable Energy Fuels U.S. Gains in Global Manufacturing

August 21, 2014

Pillar III: Permitting a New Manufacturing Renaissance into Existence

A new study from Boston Consulting Group shows the U.S. is making significant progress in regaining its position as the world’s manufacturing leader. The report suggests the gap between the U.S. and China is closing as China and other nations are losing their competitive edge over the U.S. thanks in large part to our abundant supply of affordable energy. BCG categorizes China as a nation “under pressure” as its competitiveness has declined, while the U.S is labeled as a “rising global star.”

CNBC reports, “Higher energy costs also are dampening China's manufacturing prowess. The cost of industrial electricity rose by about 66 percent in China and 132 percent in Russia. The cost of natural gas soared by about 138 percent in China and 202 percent in Russia from 2004 to 2014, according to Boston Consulting research. … If manufacturing in China is getting dicier, the prospects for the U.S. and Mexico are improving. And cheaper energy prices are a key reason why. Natural gas prices have fallen by 25 to 35 percent since 2004 in North America due to large-scale production of shale.”

And according to CBS Money Watch, “Perhaps the biggest sign of this change: As China has modernized, its estimated advantage in manufacturing costs over the U.S. has declined to a less than five percent. Last year, the U.S. Bureau of Labor Statistics noted that utility costs in China had risen 15 percent between 2010 and 2011.”

America’s growing supply of affordable energy can help put American manufacturing back on top, but only if we have the right policies in place to allow it. New federal regulations like EPA’s proposed power plant rules threaten to eliminate our competitive advantage as these rules will drive up energy costs. And there are still more rules to come, like EPA’s pending ozone standard, which is already contributing to uncertainty and holding back investment. 

Unleashing America’s manufacturing renaissance is a priority for the Energy and Commerce Committee, and it is one of the pillars of the Architecture of Abundance. In addition to working to stop costly new rules that will make energy more expensive, we are working to bring certainty to the permitting process for new U.S. factories and expansion projects.

To learn more about the Architecture of Abundance, and our plan to say yes to American energy and manufacturing jobs, visit: http://energycommerce.house.gov/yes2energy