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Global Supply Chains May Shift as New Energy Sources Are Discovered

The global energy landscape is shifting—and that shift will fundamentally change the way global supply chains operate. The use of shale gas has expanded the United States’ competitiveness and allowed for a big boost in supply chains. This article by Patrick Burnson explains how other countries are likewise expanding their energy sources, and likewise how their own global supply chains. For right now, however, the shift seems to be moving back to the US: A new study by IHS estimated that in the United States alone, the surge in unconventional oil and gas extraction has led to the creation of 1.7 million jobs and added $62 billion to federal and state coffers in 2012. The big drop in energy prices has also led to a surge in investment in the United States, posing a risk for Europe and Asia which face migration of manufacturing to North America and the loss of competitiveness, said Behravesh. This expansion of unconventional energy sources is leaving investors to wonder where the next big surge of manufacturing will take place. Opportunities continue to be identified worldwide, with a wildcard coming from the reinvestment in the traditionally underdeveloped Iraqi oil production. With new energy comes new focus by international investors in laying down roots—and those roots can mean dramatic restructurings of how supply chains flow, where they flow, and the manufacturers who participate. The “old” players in the global supply chains that exist today may want to pay close attention to what areas of the world begin producing more energy—they’ll be the future competitors in the global market.

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