Let’s frack manufacturing
They’ve already started in El Segundo
America outsourced manufacturing for a reason: it isn’t very profitable. Writing software, providing services, or designing the iPhone in Cupertino but assembling it in China are much more lucrative.
We’re not going to solve our “build nothing” problem by going backwards. We’ll need to raise standards of living in the process. Luckily, we’ve solved a similarly “unsolvable” problem before.
You may be old enough to remember how hopelessly dependent the US was on Middle Eastern oil. “Peak oil” seemed to guarantee America was stuck as an energy beggar.
Today the US produces more oil than any country in the history of the planet:
We have frackers and their relentless innovation to thank for our energy independence. Given we now depend on Chinese factories as much as we once depended on Saudi oil, let’s look at how America did it.
1) We innovated.
We didn’t solve our oil problem by rationing gasoline or tariffing Saudi Arabia. We innovated.
American drillers once needed $70 oil to break even. Now, certain projects are profitable near $30. Not because they got lucky and struck more oil. But because roughnecks in West Texas reinvented every aspect of oil extraction to become the world's most elite operators.
American frackers:
Discovered that horseshoe wells, which go sideways and take a U-turn underground, can cut costs in half.
Created robo drills that steer themselves, automatically adjusting to stay within an oil-rich sweet spot.
Revolutionized sand logistics, building infrastructure like the Dune Express. The world’s longest conveyor belt, it can move 13 million pounds of fracking sand a year. The Dune Express replaces 400 truckloads of sand a day, cutting traffic, emissions, and costs.
2) We went forward, not backwards.
We did not go back to burning dirty coal.
Instead, America’s total carbon emissions have dropped 20% since peaking in 2006. Not because of solar or wind, but because of natural gas. Fracking made natural gas so cheap, it replaced coal as America's No. 1 power source.
In manufacturing, going backwards would be making sneakers in American factories again.
Going forward looks like Hadrian’s state of the art factories where 3D printers whir and robots glide to make high-value-added products.
3) We grew a lot wealthier in the process
The “father of fracking” George Mitchell first lost millions trying to unlock the Barnett Shale formation in Texas. He finally succeeded after 16 years and sold Mitchell Energy for $3.5 billion in 2002.
Thanks to men like George Mitchell and countless anonymous innovators, America now generates $1.8 trillion per year from fracking. Fracking has also generated hundreds of thousands of good jobs.
Not to mention the incalculable benefits all Americans have enjoyed from cheap energy.
4) It started with a story
After meeting with futurist Buckminster Fuller in the 1960s, fracking father George Mitchell realized civilization faced catastrophe without new energy sources.
That vision kept him pushing forward for 16 years, even when bankruptcy loomed.
Here’s the story today:
America can't build stuff. We can't compete with China. Factories are never coming back.
Like peak oil, “peak manufacturing” is an illusion. By applying its innovation superpower, America can again be the world’s powerhouse of building stuff, while generating trillions in new wealth.
In 20 years, we could be producing more stuff than China. They’ve already gotten started in El Segundo.
Dan Steinhart is a co-founder of the Rational Optimist Society.
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In 20 years, the US could be producing more stuff than China. Could. Might.
China is exceptionally good at "borrowing" technology. As an analogy, Ukraine won a substantial advantage in its war with Russia with cheap, innovative drones that killed tanks and soldiers. A few months later the laughter stopped abruptly when Russia started using copies of these drones against Ukraine. Stalemate.
Another thing that China is exceptionally good at is picking winners. The West picks winners too, but just as many losers. Why? China excludes social factors such as number of jobs, increasing the median wage, regeneration of depressed regions, and (obviously) vote-gathering potential.
China produces 5 million STEM graduates a year, close to ten times as many as does the US. China's advantage will persist, and out-accelerate the West.