'World News' Shows High Energy Prices Boost U.S. Manufacturing

      It’s a change from the usual complaints about high energy costs from the mainstream media, especially ABC [1]. But, the June 24 “World News Tonight” showed that higher fuel costs may be helping Americans by making domestic manufacturing more competitive

     “Tonight, we have a closer look at what may be a surprising upside to all the hardship being caused by record oil and gas prices,” “World News” fill-in anchor Elizabeth Vargas said. “And that is the creation of new American jobs.”

     “Over the past 10 years, more than 4 million manufacturing jobs have been lost in this country, many as companies found they could make things more cheaply overseas and then ship them here,” she said. “But now, with the cost of energy and shipping skyrocketing, made in the USA suddenly makes sense.”

     Although oil hasn’t traded at $20 a barrel in nearly a decade [2], ABC correspondent Sharyn Alfonsi showed the costs associated with exporting and importing raw materials and finished goods, with oil at over $135 a barrel, isn’t cost effective as it once was. Savings on overseas labor are offset by soaring freight charges.

     “When oil was $20 a barrel, it cost $3,000 to ship a 40-foot container from Shanghai to New York,” Alfonsi said. “Today, that same container costs $8,000 and that has some businesses abandoning ship. So, after decades of watching plant after plant close and work go overseas, some jobs are now coming back.”

     Alfonsi called it “reverse globalization.” One potential benefactor, according to CIBC World Markets chief economist Jeffrey Rubin, is the U.S. steel industry.

     “When you have to ship iron ore from Brazil to China to make steel, and then ship it back to New York – Pittsburgh’s looking pretty good,” Rubin said to “World News.”

     In the 1980s, Pittsburgh lost more than 100,000 steel-related jobs, according to the May 28 Chicago Tribune [3]. Steel became cheaper to manufacture in Canada and overseas, making it more affordable to import, as opposed to produce domestically.