Higher Oil Prices Are Starting To Bring Jobs Home 777
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."
Size of product isn't the issue, cost is the issue (Score:3, Informative)
Are you kidding? You think that the product size actually matters? There is very little difference in shipping a container of refrigerators vs. a container of pens. It's a tiny fraction of fuel economy (a few percent) due to weight differences. The cost & distribution challenges come in breaking up the product at distribution centers, but that happens regardless of where the product is manufactured.
What will matter is raw ores (iron ore) and other relatively dense materials (steel, lumber), which greatly increase transportation costs and are easily replaceable commodities. This will be the first place the effects are seen, but it will spread to other products.
"The cost of shipping a refrigerator across the sea is way smaller than the cost of trucking it across a state."
Perhaps if you ship them one at a time. But that's not how trucks or ships work.
The statement in the article notes an increased container shipping cost of $3,000 to $8,000 shipping from China to NY. That $5,000 difference is about 1,000 gallons of diesel, which is enough to drive more than 4,000 miles carrying the 29+- tons of a fully loaded standard shipping container.
Re:higher oil prices = higher prices = higher wage (Score:4, Informative)
No, it's a lose-lose broken window fallacy.
http://en.wikipedia.org/wiki/Parable_of_the_broken_window [wikipedia.org]
Paying for breathing air might increase the GDP, but it would only be making the world net poorer. By definition of the consumer price index (CPI) being fraudulent data, so too is the GDP fraudulent data. Double the supply of money, ceteris paribus, the GDP doubles. Twice as much money trades for the exact same things. But in the real world inflation works it way through the economy discretely and unevenly, not universally evenly. People who get the new money and new credit first, spend more on specific things first. In the late 90s it was internet stocks, from 2000-2007 it was houses, and now it's commodities like oil. The poorest (last to receive the new credit and dollars) will suffer the worst for the longest time.
Trade imbalance and exchange rates (Score:1, Informative)
Re:Interersing trend... (Score:1, Informative)
The only problem to solve is that high seas piracy still exists
The steel thing is already happening (Score:5, Informative)
Re:Interersing trend... (Score:3, Informative)
The price of the average house is falling because it was never worth what the bubble fanatics thought it was.
That McMansion out in the exburbs is looking to cost a lot more to heat this winter ... and next, ... and the year after. Transportation costs are going up as well. Plus, people don't want to spend an hour each way commuting. Cities are going to make a comeback, and those McMansions, stuck in the wilderness, with a declining tax base, will be the new slums. Look for a reverse donut-hole effect.
Comment removed (Score:4, Informative)
Re:Interersing trend... (Score:5, Informative)
The EU is doing just fine dealing with $5+ for a gallon of gas,
Are you kidding? So far Europe has had truck drivers go on strike against fuel tax [bbc.co.uk], fuel delivery drivers go on strike for a 14% pay increase [scotsman.com], annual electricity/gas bills rising at 40%/year threatening to push a quarter of all households (5 million families) into fuel poverty [timesonline.co.uk], councils raising the cost of school meals due to the expense of transportation [northlincs.gov.uk]. Even the police are having to cut back on front line staff due to the additional expense [telegraph.co.uk]. Food bills have risen by 20% since the start of the year. [telegraph.co.uk]
The advertisements on the sides of public transport buses read "Fed up of paying fuel duty to go nowhere, take the bus instead and stop your wallet from going empty". Otherwise many people are choosing to cycle in to work, especially university staff.
All of this is predicted to send house prices down by at least 10%, and then one minister tells people that should stop being so miserable about the rising cost of living. [telegraph.co.uk]
Re:higher oil prices = higher prices = higher wage (Score:4, Informative)
Less energy afforded and produced makes the world net poorer exactly the same way less food afforded and produced makes the world net poorer. Decreasing the supply of drinking water by half may make the price of that water double, but that means the world is twice as worse off by definition of having half as much water.
Increasing the costs of trade is just increasing the costs of the division of labor. Would you be better off if you to make everything you have completely by yourself? Grow and harvest your own food, make your own clothes, build your own house, manufacture and build your own computer? You wouldn't have enough time and skill to do it all by yourself and thus you would be much poorer operating as an isolated autocratic individual.
Re:Telecommuting (Score:5, Informative)
I've seen that happen because if you're not there when the execs ask the team for advice, you don't get asked and don't get a boost in perceived value. You won't get invited to adhoc meetings and you'll miss all those water-cooler conversations. You also don't get invited to lunch with the team or the management, which often spread news regarding the project, so when you actually do show up to a planned meeting, you'll appear extremely unprepared because you missed all those casual details. You also don't get the special projects handed out at a moment's notice, which generally saves someone's ass gaining you another supporter. Volunteering for those special projects makes you look like a go-getter, but you'll be completely bypassed because you weren't there to raise your hand. Also, if your teammates work late, it's assumed you're not. If they can't see you putting in extra time, you gain no benefit from doing such. You will watch helplessly as your teammates slowly rise in ranks. They will receive the flagship projects to work on, while you get handed the maintenance projects, which only buries you deeper because you have no chance to shine on those projects. Your teammates will be recognized every time they complete something, which will never happen on on your crappy maintenance project.
I worked at a job in which every member of the team was remote, and it worked out very well, but once the team was consolidated in the office, the stragglers had a difficult time proving they were working as hard as the ones showing up in person. I watched previously great workers drift off into mediocrity because they suffered declining perceived value by management.
But, like I said earlier. I think it works if everyone does it, but not if 1 or more teammates don't.
Value of the Dollar and cost of goods (Score:3, Informative)
Gas and oil are such global commodities that they were the first to jump up in price. Now we're seeing other goods do the same. I think the US is getting to the point where it's no longer the rich superpower it used to be, and that places like China and the EU can dictate economic terms to a larger degree than in the past.
Re:Interersing trend... (Score:5, Informative)
Who cares about the environment, it can recover in 20-40 years.
Where do you get this crap? Take a look at the island of Crete. This island used to be almost completely covered in forest. Then the Minoans began clear-cutting it for lumber to build ships. This continued for several generations. When the forest was clear cut, there was no longer any mechanism for the top soil to be held in place. It washed into the sea. The isle of Crete is now a wasteland in terms of the ability to grow forest -- solid forest has not grown there in thousands years.
You are naive, ignorant, short sighted, and have an offensive disregard for the natural world.
Re:Interersing trend... (Score:2, Informative)
Except they are dealing with almost US$9/gallon.
When it was only US$5/gallon all was well.
Re:Interersing trend... (Score:5, Informative)
Re:Interersing trend... (Score:3, Informative)
Also, the 1002 area (the area where we want to explore) is about 2000 acres, or the size of Dulles Airport, out of a total ANWR size of 20 MILLION acres, or about the size of N. Carolina. Less than .01% of ANWR would be touched. Would your governor forbid your from building an airport in your state because of a NON-endangered species that lives on the other side of the state?
Besides, oil and gas development and wildlife are successfully coexisting in Alaska 's arctic today. For example, the Central Arctic Caribou Herd which migrates through Prudhoe Bay has grown from 3000 animals to its current level of 32,000 animals. The arctic oil fields have very healthy brown bear, fox and bird populations equal to their surrounding areas. So any supposed environmental catastrophe is a myth anyway.
And, don't get me wrong, I'm all about conservation and renewable research. Unfortunately, renewables won't be viable for another 20 years at best, so WTF are we supposed to do until then? This forced conservation that we are in now is going to ruin the economy and punish everyone for no apparent reason other than unfounded, outdated environmental concerns. Local drilling serves the purpose of making the US energy independent until we can develop alternatives and get the infrastructure set up to replace petroleum.
I understand that drilling in ANWR is not THE solution. But then again, neither is wind and/or solar. Should we give up on those ideas also because they are not THE solution to all of our energy problems? Of course not. Wind and solar are only part of a total energy solution. Just as conservation and alternatives are part of the solution as well.
Oh, and as for the topic at hand, rather than blame oil as the sole reasons jobs are returning home, it may be wise to also consider that the falling dollar has made outsourcing that much more expensive.
Re:Interersing trend... (Score:1, Informative)
Re:Interersing trend... (Score:5, Informative)
Yet with all this new supply pouring in from the north the price of oil hasn't dropped a bit.
Re:Interersing trend... (Score:2, Informative)
Despite what the media says, the housing crisis is not a national crisis either. It hasn't hit many area of the U.S. however it has hit California, Nevada, Arizona and Florida the worst which just happens to be where home values were sky high to begin with.
Re:Size of product isn't the issue, cost is the is (Score:3, Informative)
You're right in there is little difference in the cost between shipping a container of pens versus a container of refrigerators. The difference is that a container load of pens is worth more than a container load of refrigerators and the container of fridges would probably weigh less than the one filled with pens. A 40' ISO container has a maximum loaded weight of about 35 short tons. Let's take a pessimistic estimate for RR fuel consumption of 350 ton-miles per gallon (the Florida East Coast averages in excess of 1,000 ton-miles per gallon due to the flat terrain). This gives us about 10 miles per gallon for the container, so 1,000 gallons of diesel fuel will get you 10,000 miles. BTW, at speeds above about 25 mph, trains are more efficient than ships.
Re:Interersing trend... (Score:2, Informative)
Re:It's also putting the kibosh on the American Dr (Score:4, Informative)
The American Dream is overrated because the "advertised" American dream is not necessary. If the standard to "achieving" the American dream is to own a house with an ample lot size, a nice car or three, and enough cash to throw parties every weekend or whatever other activity you find fun, well I say that's just the TV and popular culture brainwashing you.
You can be perfectly happy and successful living in a town house without a yard and an econobox car. Almost every form of entertainment or activity is still accessible without the McMansion or the SUV. The only lacking thing is the increased expenses and the ability to flex your debt-inflated-penis with your shiny SUV and spinners.
I'm probably in the same boat as you. I make more than my parents yet I can't afford a house near work. I can afford a 2 bedroom condo though. And after thinking, I would be plenty happy with condo as long as I was single. I'd still be happy with it if I was married. The only time it would start to feel cramped is if I wanted to have a family. But by then, I would probably be married and I figure a 3 bedroom town house would suffice. The only thing I really get with a bigger house is bragging rights and a whole lot more maintenance. For example if there was a yard I'd have to pay for a gardener or do it myself. If there were extra rooms I'd have to clean yet another room. I don't need that. A 2 bedroom condo with a decent kitchen, living room, and a few complex facilities (pool/patio) is plenty to keep me happy.
Houses (with full yards, extra rooms, and large garages) only make sense in rural areas. In places like suburbs they're just a luxury and bragging rights.
Re:Interersing trend... in 1985 (Score:5, Informative)
> we haven't figured out what to do with the tons of nuclear
> waster we have NOW,much less if we did like McCain wants and
> added 45 new plants.
Of course ``we'' have:
http://www.eoearth.org/article/Fast_neutron_reactors_(FBR) [eoearth.org]
Prohibited by the Carter Administration in the USA, but used
throughout the World. Breeder reactors use the output of
conventional fission plants as fuel and the resultant waste,
once reprocessed, has a half-life of a few centuries instead
of hundreds of millenia.
Re:Interersing trend... (Score:3, Informative)
The refuge supports a greater variety of plant and animal life than any other protected area in the Arctic Circle. A continuum of six different ecozones spans some 200 miles (300 km) north to south...Each year, thousands of waterfowl and other birds nest and reproduce in areas surrounding Prudhoe Bay and Kuparuk fields and a healthy and increasing caribou herd migrates through these areas to calve and seek respite from annoying pests(1).
Go Edumacate [wikipedia.org] yourself before you force me to hit you with the cluebat [thebackrow.net].
(1) Wikipedia contributors. Arctic National Wildlife Refuge. Wikipedia, The Free Encyclopedia. June 15, 2008, 01:44 UTC. Available at: http://en.wikipedia.org/w/index.php?title=Arctic_National_Wildlife_Refuge&oldid=219402881 [wikipedia.org]. Accessed June 25, 2008.
Quit buying into the bull puckey talking points (Score:5, Informative)
Check out this article which details exactly what this lease and usage entails.
http://online.wsj.com/article/SB121391719487790187.html?mod=rss_opinion_main [wsj.com]
In other words, the politicians are using word play to infer that the oil companies are drilling on the lands relying on public ignorance that a lease of oil producing lands does not equate to a guarantee of oil.
So basically, the process is.
1. Secure the lease
2. Get the permits to do test drilling
3. Do test drilling
4. Determine if its economically feasible to recover the oil
5. Get permits to actually to set up a site to manage it
6. Get permits to drill on the site
7. Go to court to keep your permits after being sued by every other environmentalist group
8. Drill for oil
9. Profit?
Remember the first rule : If a Congressman's lips are moving he is 99% of the time telling you a lie or a falsehood by omission.
only half of the equiation (Score:3, Informative)
Dude, you missed about half of the equation.
What about the wealth we create from the oil we buy? Like plastics, cheap electricity, a mobile workforce, etc. Surely those things help create some of the wealth we all enjoy, right?
Only focusing on the COSTS is only looking at half of the equation. And I'm nor arguing that we use oil efficiently - we don't. But you can't dismiss the wealth created from the oil we bought from the Saudis. We didn't just transfer X trillion dollars to them for nothing. We are getting at least as much out of the deal as they are.
That's called "commerce" and "the market". You should read about it sometime and I think you'd better understand what is going on. Carbon credits create artificial limits on that market. Maybe we need them, maybe we don't. But the justification you give for them is.....simple at best. High prices are the result of what is happening "in the market". They are not the starting point.
Re:Telecommuting (Score:3, Informative)
I worked for a company that ran overlapping 8/5, 10/4, and 12/3 shifts. They did productivity measurements per hour, which they could do very accurately since we were largely manufacturing, some design. Their claim was that they saw almost no drop in productivity at 10/4 compared to 8/5 (and, in fact, saw better productivity on the last scheduled workday) and saw very slight drops in productivity in the 12/3 shift compared to the 8/5. However, what they *did* see was significantly more mistakes after about 7 hours for all three workschedules, increasing with the time spent. They ended up cutting the 12/3 because they said it wasn't cost-effective, but the 10/4 was still a winning proposition for them. It's probably much more of an issue for high-value production (engineering, for instance.)
Re: piracy (Score:4, Informative)
I don't have the energy to go through this all over again, so I'll punt to the experts:
http://goliath.ecnext.com/coms2/gi_0199-6700447/Scrubbing-dirty-bombs-explosive-hype.html [ecnext.com]
http://www.news.uiuc.edu/gentips/02/07dirtybomb.html [uiuc.edu]
http://www.notposta.com/?p=19 [notposta.com]
http://www.onthemedia.org/yore/transcripts/transcripts_072503_fear.html [onthemedia.org]
Long story short: Dirty bombs don't work. It's not nearly as easy to distribute radioactive materials as the media would have you believe.