While the focus has been on oil in this "shale revolution" saga, I think gas - both natural gas and the accompanying NGLs - will prove to be the bigger issue over time.
The fact that Foxconn is planning a multibillion dollar plant in the heart of US union country rather than expand in China is a huge story.
The combination of rock bottom prices for feedstock coupled with extraordinarily low power prices - derived from natgas fueled plants - augars well for US industry for decades to come.I agree completely.
There were two data points in that comment:
- the future of natural gas in the US
- the reason Foxconn is coming to the US
But in the big scheme of things, I do think that inexpensive, accessible energy is the main driver for manufacturers coming to the US.
Back to the linked article in case the link breaks:
News today that Foxconn, famous as the assembler of Apple's iPhone, is planning a $10 billion investment in a display production plant in the US. This is a decision driven mostly by transport costs, little else. The cost of capital doesn't vary much around the world these days, the costs of labour are converging, leaving transport costs as really the one big variable. Something small and valuable like an iPhone, transport costs are a minimal consideration. Something large like the current display systems those transport costs could indeed be the thing which swings the location decision.Earlier in the year, Forbes had a similar article, but a slightly different take. In this, the writer argued more about "cost of time" to move things from China to the US.
Both articles were written by Tim Worstall.
If folks have followed the stories about the strikes at the west coast ports, one wonders if that might not be the over-riding concern for an operator like Foxconn.