EV, Microchip Manufacturing Will Make ‘Future Belt’ Out Of Heartland

No thanks to President Biden, but flyover country is beginning to experience a major moment. It may be enough not only to finally shed the “Rust Belt” moniker Biden used in his State of the Union speech to describe the Upper Midwest but also to pave the way for adoption of an updated and more accurate regional descriptor for the entire heartland.

How about the “Future Belt”?

The Russian invasion of Ukraine is a travesty and a tragedy that may yet result in nuclear annihilation. But in the meantime, the reverberations from this new war have created great potential for the U.S. heartland alone to enhance the national security of the entire United States. And combined with the renewal of the Midwest’s industrial base with coming investments in microchips and electric-vehicle manufacturing, there is a generational opportunity for the region to re-assert itself as the bell cow of American economic progress.

Biden set up an important passage of the SOTU address by having Intel CEO Pat Gelsinger in the visitors’ section, hailing him for the company’s decision to commit at least $20 billion, and possibly as much as $100 billion, to build a microchip-manufacturing complex in the heart of Ohio.

The president also cited the tens of billions of dollars in expected investments by General Motors and Ford in electric-vehicle manufacturing complexes across the region. He could have, but didn’t, mention the other automakers that continue to announce huge plans to make new investments in the future of EVs in flyover country locales ranging from Mississippi to Georgia to Indiana.

“Just look around, and you’ll see an amazing story,” the president said, about “the revitalization of American manufacturing. Companies are choosing to build new factories here, when just a few years ago, they would have gone overseas.”

And by “here,” Biden actually meant the heartland. Flyover Country. As he filled out his point, Biden blew it rhetorically, as not surprisingly he did a few other lines in his speech. “As Ohio Senator Sherrod Brown says,” Biden went on, “’It’s time to bury the Rust Belt. “It’s time …” and then Biden went off-script and stuttered through this sentence: “It’s time to see what used to be called the Rust Belt become the home of significant resurgence of manufacturing.”

No matter, really — especially in the big picture. Not even presidential stumbling and mumbling through the moment could obscure the fact that the region is emerging into a new future, through both the ruins of a foreign war and the opportunity to become the global center of new kinds of manufacturing.

The war in Ukraine, of course, presents an opportunity for the U.S. hydrocarbon industry to regain global leadership that it enjoyed before the current administration in Washington, including an unshackling of the fracking that mostly goes on in flyofer country.

So far Biden and Congress mostly have tried symbolic measures to boost global oil supplies and punish the Russians, such as banning imports of their hydrocarbons. But Washington has resisted the most logical step — getting out of the way of American exploration and production companies’ animal spirits in the oil patch — in favor of stubborn obeisance to the notion that somehow just producing more green energy will solve the problem.

Even business organizations that are relatively woke at least are alluding to the most obvious thing the nation can do in the face of the biggest ground war in Europe since World War II. The Business Roundtable, for example, just called for “steps to increase our energy independence.” That doesn’t mean millions more windmills.

The need to reverse course in this area is expressed even by green-energy billionaire Elon Musk, founder of EV pioneer Tesla, who tweeted a couple of weeks ago, “Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures.”

Musk is doing his part to help revive flyover country by building a pickup-truck plant in Texas. Now he wants his new oil-industry neighbors in the Lone Star State to have more freedom to do what they do best as well.

Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil and gas exports.” Indeed, taking meaningful action to dull the bite of Russian aggression on global energy supplies requires setting aside at least temporarily the current emphasis by American and global political and business elites on steps they believe will curtail climate change. Helping bring Russia to heel has nothing to do with suddenly erecting more windmills and arrays of solar panels. Back to the Oil Patch The only significant thing America can do in this moment is to loosen up again on entrepreneurs in the oil patch of Texas and Oklahoma and the fracking fields of North Dakota, Louisiana, Ohio and non-flyover states ranging from California to Pennsylvania. True, there’s more at play in frackers’ investment decisions than just the factors the federal government can control. But a few actions both material and symbolic by the president — acting courageously against his party’s political bent amid the clear and present danger to our economy and our desire to blunt the Russians however we can — could go a long way toward teasing more oil and natural-gas production out of the ample hydrocarbon deposits that stretch across this country. These possibilities aren’t constrained to oil and natural gas, either. As the war in Ukraine scrambles global energy markets and creates the very real possibility that Europeans could freeze next winter if Russia no longer is pumping natural gas west to the continent, coal is suddenly enjoying a renaissance in popularity across the Atlantic. It’s unclear how long and strong that trend would have to become before it boosted coal in places like Ohio and West Virginia, which are battling long-term efforts to exterminate their coal industry. Another wrinkle from the conflict in Ukraine affects Flyover Country: corn. Ukraine is the world’s fourth-largest corn exporter, and the war quite understandably is sowing great concern that farmers there won’t be able to do their usual spring planting just one year after the nation posted its biggest-ever corn crop. Ukraine exports almost 80% of the corn it grows. If that trade is constricted for the short term or especially the long term, the world’s premier corn growers — farmers in America’s heartland — could be called upon to make up the difference. Industrial Transformation Too This brings us back to the State of the Union speech.