Natural Gas Prices Kill The Pink Flamingo

Have you ever heard of Union Products? Probably not, but I'm guessing that you've probably seen the item their best known for: The plastic Pink Flamingo.

They've made millions of them over the years, but they closed their doors yesterday because of rising energy costs, in particular, the rising cost of natural gas. Here's how our friends at NAM Blog put it:

Union Products is closing its doors because of RISING COSTS for plastic resin and electricity, in addition to some financing problems, according to the AP article. Plastic resin is a chemical product and the basic feedstock for it is natural gas. And many public utilities use natural gas as a power source. Congress has failed to open new areas for U.S. natural gas production, (we have vast reserves of it). So we can lay the demise of yet another manufacturing facility at the feet of those in Congress who have stalled and killed off several measures pushed this year to ease this cost pressure.

Just another concrete example of how volatility in natural gas markets helped eliminate some American jobs. But if you're the sort of person who won't shed a tear at the demise of the Pink Flamingo, what about the American chemical industry? Here's Andrew Liveris, CEO of Dow Chemical, at the Detroit Economic Club Monday, in a speech on how rising energy prices are killing his industry too:

The United States is losing major business investments and high-paying manufacturing jobs because it does not have an adequate energy policy to address rising natural gas prices, said Dow Chemical Co. CEO Andrew Liveris in a speech Monday to the Detroit Economic Club.

The United States has vast amounts of natural gas along its coasts, but environmental laws prevent drilling. Liveris, head of the $46-billion Midland-based global company, said he would like to build more chemical plants in the United States, but the country's environmental laws and lack of a coherent energy policy are discouraging.

"Faced with the choice of investing here in the United States, with the certainty of higher and more volatile natural gas prices, how can I recommend to my board and to my shareholders to invest here?" Liveris asked.

So what's the solution? Well, as our friends at NAM would tell you, opening up more areas to drilling for natural gas would help, but another piece of the solution would be to build more nuclear power plants in order to displace natural gas-fired electric generating capacity. In turn, that would make more natural gas available for chemical production, agriculture and manufacturing and bring some price stability to the North American market for natural gas.

Split an atom, save American manufacturing.

Technorati tags: Nuclear Energy, Nuclear Power, Energy, Technology, Environment, Electricity, Massachusetts, Union Products, Natural Gas