“Made in the U.S.A” is becoming more affordable. The reason? Fracking.
You don’t need a Nobel Prize in economics to know that the fracking revolution has been good for the U.S. What’s not so well known is just how competitive cheap oil and gas has made American manufacturing. BCG, the Boston consultancy, estimates the average cost to manufacture goods in the U.S. is now only 5% higher than in China and is actually 10% to 20% lower than in major European economies. Even more striking: BCG projects that by 2018 it will be 2% to 3% cheaper to make stuff here than in China.
I – Word Understanding
Fracking – a technique designed to recover oil and gas from shale rock
II – Have Your Say
1. Aside from lower energy cost, rising wages in China and increased productivity of American companies contribute to lower manufacturing costs in the US.
2. Why is fracking controversial?
– it uses huge amounts of water that must be transported to the fracking site
– potentially carcinogenic chemicals used may escape and contaminate groundwater
– fracking process can cause small earth tremors
– fracking is distracting energy firms and governments from investing in renewable sources of energy, and encouraging continued reliance on fossil fuels.