America Has Way Too Much Manufacturing Capacity

In another sign of recent weakness in the manufacturing sector, capacity utilization in the US has stalled, as demand remains soft. US industries are producing significantly below their capacity and “5.5 percentage points below long-run average” according to the Fed. We are certainly far under the 82-85% level at which economists believe that the traditional measures of inflation are expected to rise.

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Pipelines Can’t Handle North American Oil Boom

The production of oil from Western Canada is expanding to the point that existing pipeline capacity is overwhelmed. Canadian pipeline company Enbridge aims to get its Northern Gateway project built for exports from Canada’s west coast. TransCanada, meanwhile, anticipates crude oil deliveries will expand from Canada to southern U.S. refineries by way of the Keystone XL pipeline. Expanding oil production from North America, however, may be too much for pipelines to handle and suppliers will need to look to more-expensive rail to get their oil to markets.

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Pipeline space running low

With 19 proposed pipelines scheduled to begin construction within the next three years in Strathcona County, a county director has expressed concern over running out of room to safely construct the lines.

At a Sherwood Park and District Chamber of Commerce luncheon on Wednesday, Jan. 16, Economic Development and Tourism director Gerry Gabinet explained to attendees that Strathcona County has more than 2,800 kilometers of high-pressure pipeline, with 17 pipelines adjacent to residential areas.

Read more: http://tinyurl.com/am7xnxd