View Complete 2011 Structural Cost Report 
Summary
Foreword
Chapter 1 - Raw Cost Index
Chapter 2 - Corporate Tax Rates
Chapter 3 - Employee Benefits
Chapter 4 - Tort Costs
Chapter 5 - Energy Costs
Chapter 6 - Pollution Abatement Costs



Energy costs were the only structural cost examined for which the United States had an advantage over its 9 largest trading partners on a trade-weighted average basis (0.9 percentage points).

  • While costs of many industrial energy sources are significantly lower in the United States than elsewhere, the fact that energy costs account for a very small proportion of overall manufacturing costs (averaging less than 2 percent of manufacturing shipments, compared to 15 percent for labor costs and 50 percent for raw materials and intermediate goods – see 2008 cost study, p. 14) means that the effect on total costs is muted.  For instance, the price of natural gas in the United States was $207 per million kCal, less than half the price in Japan and France and less than one-third the price in Taiwan and Korea, but these large gaps do not lead to large differences in the context of total structural costs.

 

  • Nonetheless, as previous cost studies have noted, the vast potential for oil and gas development in the United States should allow us to improve this cost advantage at least incrementally (as well as pursue the broader goal of reducing dependence on foreign sources) provided that restrictions on exploration and drilling are relaxed.


 

Energy Costs (Foreign Advantage)

Canada
Mexico
Japan
China
Germany
United Kingdom
Korea
Taiwan
France
Average of 9 partners
2003
6.0
2.3
-12.5
2.3
-0.6
-2.1
-4.1
-15.3
4.2
0.5
2006
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.7
2008
0.1
-0.4
-1.5
N/A
-1.7
-3.3
-4.3
1.2
-1.6
-0.9
2011
0.7
-1.9
-1.2
0
-1.9
-3.9
-4.2
0.8
-3.2
-0.9
Increased Foreign Advantage
2003-2011
-5.3
-4.2
11.3
-2.3
-1.3
-1.8
-0.1
16.1
-7.4
-1.4


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