The American Midwest, that great belt of farms and factories stretching south and west from the Great Lakes, has always lived on nature’s gifts. First was the farmland, perhaps the richest in the world. The same land yielded coal and iron, and so the Midwest became the nation’s foundry as well as its breadbasket.
So it is natural that the Midwest looks now to raw materials to reverse its decades-long slide into economic decay. These new resources, however, aren’t land and coal, but water and natural gas, or shale gas. No one knows yet whether water or natural gas can create the number and quality of jobs in the 21st century that iron and coal did in the 19th century, but a lot of Midwestern cities and states have their fingers crossed.
The water lies in the Great Lakes themselves, the five huge inland lakes that, taken together, account for 20 per cent of the fresh water on the planet, the single greatest freshwater resource in the world. This water has always been here, of course, used for recreation or for shipping that iron ore, but never put to use as a job-creator in itself. In a drying world, the Midwest is beginning to realise that it may be sitting on a big wet gold mine.
If fresh water becomes a lure for new investment, the Midwest is in the best location to take advantage of that. The second-biggest freshwater repository is Lake Baikal in Siberia. The third biggest is the Great Lakes of Africa, in the middle of one of the world’s most war-torn regions. Only the American Midwest has the urban infrastructure, transport, institutions, and work force capable of supporting a new, water-based economy.
The natural gas, of course, is just as old, but we are just realising how much there is and what we can do with it. Promising natural gas formations are scattered across the globe, from western China to north-western Australia to Alberta in Canada to the lands around the North Sea. But the most excitement centres on new and potentially rich fields in the Midwest — in Pennsylvania, Ohio, Michigan, and Indiana, and stretching into Illinois and Iowa — exactly the old iron-and-coal-fuelled states that produced so much of the world’s steel, auto, auto parts, and farm machinery for so many decades.
It’s not that these old industries — farming and heavy manufacturing — are gone. Far from it. Midwestern farms feed more of the world than ever. Midwestern factories produce more and export more than they ever did. But neither supports the region nor its people any more. With farms getting ever bigger and farm machinery ever more sophisticated, farming employs about 2 per cent of Midwesterners these days. The same is true for manufacturing: globalisation, automation, and the employers’ war on trade unions has cut manufacturing’s share of Midwestern jobs from 35 per cent in 1970 to 15 per cent now. As the recession wanes, Midwestern manufacturing is reviving, but there’s no evidence that this is producing more jobs. Just the opposite; many manufacturers used the recession to retool and automate, getting ready to compete in a global market with fewer workers.
In short, the old industries and the old raw materials can’t carry the Midwest any more.
Perhaps water and gas can do the job.
The Midwest isn’t going to be the OPEC of water. That is, America is not exporting it. A formal compact between the eight states and two Canadian provinces that border the Great Lakes puts severe limits on diversion of the lake water. Even drought-stricken farmlands outside the Lakes’ watershed won’t be getting this water.
Instead, it is a magnet for companies that need water, like pharmaceuticals, food processing and some IT industries, and even more for companies that make water-related equipment, like valves, meters, pumps, filters, software, and the like. Milwaukee, just north of Chicago, has taken the lead. It has identified no fewer than 120 local firms engaged in these “water solutions” and has formed the Water Council to promote their city as the freshwater capital of the world. The University of Wisconsin at Milwaukee has set up a School of Freshwater Sciences to lead research. An envious Chicago is beginning to do the same. A new Tri-State Alliance linking Milwaukee, Chicago, and northern Indiana into an economic belt around the base of Lake Michigan is looking at water as one of its first regional projects.
Midwesterners already swim in the Lakes and, in recent years, have done a good job of conserving them. Now they are realising that any future investors or employers who need a reliable source of fresh water may have nowhere to go but the Midwest, and they better get ready for it.
Most big Midwestern cities — not only Chicago and Milwaukee but Cleveland, Detroit, Akron, and Buffalo — lie within the watershed. Most are industrial wastelands. If they have a future, it may be defined by water.
And by natural gas. The best way to get this gas, tucked into layers of shale, is hydraulic fracturing, or fracking, which injects chemically-treated water into the shale to enable drilling. The environmental risks here are clear — something like razing mountaintops to get the coal inside — and fracking is controversial, but not as much as you would expect.
The reason is that it is already creating thousands of jobs, in the oilfields, in steel mills making pipes, in factories using the gas. All by itself, the shale oil boom looks likely to turn the US from an energy importer to an energy exporter. And it is cheap — about one-fifth the price of European natural gas, giving US industrial users a terrific competitive edge.
Environmentalists hate fracking, just as they are suspicious of any commercial use of Great Lakes water. But this is a region in economic distress. Some of its residents are old enough to remember boom times, when giant factories polluted the air with smoke from a thousand chimneys.
To the workers in those factories, it smelled like bread baking in a thousand ovens.