According to a new ICF International study, record oil production, thanks to shale development, is benefitting U.S. consumers by reducing gasoline prices. Estimated savings for U.S. consumers since 2008 are in the billions of dollars, according to ICF International:
“This reduction in petroleum product prices have saved U.S. consumers an estimated $63 to $248 billion in 2013 and estimated cumulative savings of between $165 and $624 billion from 2008 and 2013.”
On gasoline prices, the ICF International report states that:
“Given the international nature of U.S. petroleum product movements, ICF also estimates that 2013 U.S. petroleum product prices were between $0.29 and $0.94 per gallon lower than they would have otherwise been without U.S. HMSHF.”
The savings are made possible through a combination of reduced gasoline and crude oil prices per barrel, a result of the energy revolution made possible by hydraulic fracturing. The ICF International report states:
“Horizontal multi-stage hydraulic fracturing (HMSHF) technologies, also known as “fracking,” have enabled North American oil and gas producer’s unprecedented access to a previously inaccessible resource base.”
But the benefits of hydraulic fracturing are not just limited to our domestic borders, as the study points out:
“ICF estimates that international oil prices were between $12 and $40 per barrel lower in 2013 than they would have otherwise been without US HMSHF crude oil production. ICF estimates that international Brent crude oil prices would have averaged 4122 to 4150 per barrel in 2013 without U.S. HMSHF crude oil and condensate production increases.”
ICF isn’t the only one to come to this conclusion. AAA’s Daily Fuel Gauge Report, which documents current gasoline prices around the country, reported on October 27, 2014, that the price of gasoline was at its lowest level since December 2010:
“The national average price for regular unleaded gasoline is $3.04 per gallon, the lowest mark since December 27, 2010. Today’s price is six cents less than one week ago and twenty-five cents less than one year ago. The national average has now dropped for 32 consecutive days for a total of 30 cents per gallon.”
Consumer benefits through shale development were also previously studied by a group of Yale University graduates, which was published in June 2012, in a paper called “The Arithmetic of Shale Gas”. The study attempted to quantify the economic benefits of hydraulic fracturing through a cost-benefit analysis, the findings of which were in line with ICF’s conclusions:
“…it is startling to acknowledge that consumer benefits from the technology of shale gas drilling and new gas production can be expected to exceed $100 billion per year, year in and year out as long as present production rates are maintained.”
Thanks to shale development, The United States is poised to become an energy superpower. Today, we produce more natural gas than any anybody else and are now in a position to become the world’s number one oil producer.
While we surge forward unlocking the abundant energy sources within our borders, translating into energy security for our nation, economic growth and thousands of jobs, we must not forget the source of these accomplishments – a pioneering technology called hydraulic fracturing.