Editor’s note: This is the second in a multi-part series
In last week’s column I professed my view about tariffs being bad economic tools as they are nothing more than a form of taxation on consumers made palatable by the perception of patriotism. Especially in this era of uncomfortable inflation, Americans don’t need any more added to their cost of living.
Being anti-tariff is probably a contrarian view among US-based manufacturers. But, that doesn’t mean I’m against other forms of public policy that allow producers to be competitive with foreign factories.
As I noted last week (in a piece that can be found in the archives of this website), I have plenty of thoughts on that; after all, my team and I at Confer Plastics are in the trenches of the global trade wars every day. But, for brevity’s sake I wanted to limit it to five big ones. In that column I offered two of those with a focus on intellectual property.
This week, I continue the discussion about what industry actually needs to survive and thrive with this sentiment: Invest in clean, reliable energy.
Manufacturing takes a lot of electricity.
At my company, we utilize around 12 million kilowatt hours of electricity per year – as much as all the homes in the village of Middleport times two.
But, we’re a small fry in that regard.
Consider Micron: The microchip plant that is planned for upstate New York will use 16 billion kWh, which is the total electrical usage of all of New Hampshire and Vermont combined.
If you think that’s an incredible amount of energy, it’s just the tip of the iceberg. Throughout the United States, 73 microchip fabrication facilities are under construction or planned for the coming years. Granted, not all of them will be as massive as Micron could be, but they’ll be big. And, that’s just chips – there’s still all the demand created by other manufacturing sectors as well as the growing data center, artificial intelligence, and cryptocurrency markets (a typical data center uses electricity at a magnitude of what my factory does). Total electrical demand for the nation is expected to rise 16% by 2029. That’s a huge leap in just a few years.
So, the only way to hang with the Chinas of the world in both volume and cost of goods, and ensure our country can produce more things than it is now, is to further invest in energy.
Many policymakers have said this can be done and should be done through renewable energy -- solar and wind.
Such sources are nice to have in your market basket, but, in order to produce what the economy actually needs, and to compete, they shouldn’t dominate what’s in the grid as they are both intermittent and unreliable. Manufacturers are 24-hour facilities (as are data centers…and the homes that will have electrified heat and cars charging overnight). You need electricity in volume at all hours and not at the mercy of available daylight or the wind. Plus, the demand will be so great that a hyper-focus on such sources would lay waste to the open spaces they are allegedly supposed to protect.
And, it’s protecting that environment that’s just as important as protecting the economy.
So, how do we manage both?
The quick answer, and likely the best answer, is nuclear energy.
In the old days, those were dirty words, based on the fear of fallout in the event of a reactor failure, disposal of waste, and sabotage.
But, those actually were the old days. As with everything, the technology and safety have improved. Small advanced reactors, which run on fuels different from those used on traditional reactors, are becoming the wave of the future and the investments of today. These reactors typically use a coolant other than water and operate at lower pressures and higher temperatures, and the computer and safety controls are top-notch.
Not only has the science improved, so has the interest: Billionaires like Bill Gates and Warren Buffett are pouring money into next-generation nuclear energy; New York’s lawmakers are adjusting their tunes in support of nuclear which, just a few years ago, was all but left out of the sources approved by the Climate Act; AI investors like Sam Altman have said their technology can only succeed only with an influx of nuclear; and more environmentalists – independent of environmental groups – are promoting it.
To further the development of such energy, and the construction of small reactors throughout the country, the political and economic energy being directed at tariffs and aggressive trade wars should be rerouted and directed at energy itself. Tariffs are a bandage. If you really want to stem the bleeding of manufacturing from our borders, having cheap, reliable electricity is paramount. Without electricity, you don’t have production. It’s that simple.
President Trump has repeatedly mentioned energy as a key part of his campaign and presidency, but, by his speeches, it seems like his focus is more on oil and gas. Hopefully it’s not. The federal government must continue to invest in nuclear, as it has of late (for example, the $4 billion, 500 megawatt TerraPower project in Wyoming received half of that in federal funding). It has to be all hands on deck if you want the things in modern life that you take for granted…and if you want them made in America.
From the 01 February 2025 Greater Niagara Newspapers and Wellsville Sun
