(PJ Media) We know that high gas prices are a complex matter, but we also know that the Biden administration has played a key role in rising fuel costs. The price of gas doesn’t just affect Americans at the pump; there are other ripple effects throughout the economy. And we’re starting to see those ripples reach U.S. manufacturing.
Bloomberg reported on Thursday that manufacturing plants across the country are scaling back production or shutting down for the long-to-medium term because power costs have gotten so high. And this isn’t some temporary blip on the radar screen. Instead, it has major implications for our economy.
“On June 22, 600 workers at the second-largest aluminum mill in America, accounting for 20% of US supply, learned they were losing their jobs because the plant can’t afford an electricity tab that’s tripled in a matter of months, write Joe Deaux and Naureen S Malik. “Century Aluminum Co. says it’ll idle the Hawesville, Kentucky, mill for as long as a year, taking out the biggest of its three US sites.”
The report states that the shutdown process takes about a month, and the plant will need another six to nine months to come back online when the company decides it’s time to resume operations. So a year-long shutdown for the plant in reality will take closer to two years. But there’s more.
“At least two steel mills have begun suspending some operations to cut energy costs, according to one industry executive, who asked not to be identified because the information isn’t public,” Deaux and Malik continue. “In May, a group of factories across the US Midwest warned federal energy regulators that some were on the verge of closing for the summer or longer because of what they described as “unjust and unreasonable” electricity costs. They asked to be wholly absolved of some power fees—a request that, if granted, would be unprecedented.”
This emerging trend here in the U.S. is following what has already happened in Europe.
“Europe is scrambling to fill its underground gas storage ahead of the winter,” PBS reports. “Gas utilities fill reserves over the summer when, hopefully, they can buy less expensive gas and then draw from those reserves over the winter as heating demand rises. The current reductions will make refilling storage more difficult and expensive.”
Natural gas issues have shut down manufacturing in Europe and Asia, and now those same issues have made their way here to America. (So congratulations to those who want us to be more like Europe; your wish has come true.)