Report: Fracking Saved Americans $1.1 Trillion Over Past Decade
https://www.thegwpf.com/fracking-saved-americans-1-1-trillion-over-past-decade-new-report/
A new report prepared by Kleinhenz & Associates for the Ohio Oil and Gas Energy Education Program shows increased oil and natural gas production from hydraulic fracturing (“fracking”) has saved American consumers $1.1 trillion in the decade from 2008 to 2018.
This breaks down to more than $900 in annual savings to each American family, or $9,000 in cumulative savings.
These
savings come from the lower cost of natural gas due to increased
production. According to the report, “natural gas as measured using the
average Henry Hub price has declined from a 2008 high of $8.86 to an
estimated 2018 price of $3.16.” For households in the lowest economic
quintile, the bottom 20 percent, the lower price for natural gas amounts
to a savings of 2.7 percent of their annual income. “This is equivalent
to a raise of 2.7% for the poorest households,” the report states.
The
paper singles out the states of the “Shale Crescent”—Ohio,
Pennsylvania, and West Virginia—noting they are “responsible for 85
percent of the net growth in natural gas daily production over the past
ten years and now [account] for nearly one-third of U.S. natural gas
annual production.”
In
these states, total savings since 2009 amount to almost $93 billion
($45 billion in Ohio, $43 billion in Pennsylvania, and $3 billion in
West Virginia). For industrial and manufacturing end users in the
region, savings were more than $25 billion ($13.9 billion in Ohio, $9.5
billion in Pennsylvania, $1.3 billion in West Virginia).
These
findings are backed up by a series of reports from the Consumer Energy
Alliance. The trade group found lower natural gas prices due to
increased shale development led to more than $40 billion in savings for Ohio residents from 2006 to 2016. In Pennsylvania, savings were more than $30 billion. West Virginia residents experienced savings of more than $4 billion.
It
should come as no surprise that shale development is spurring economic
growth across the “Shale Crescent” and the United States as a whole.
According to the Federal Reserve Bank of Dallas, the shale industry
alone drove 10 percent
of U.S. GDP from 2010 to 2015. In 2018, according to the National
Bureau of Economic Research, oil and gas extraction accounted for $218 billion of U.S. economic output.
Hydraulic
fracturing activity delivers $1,300 to $1,900 in annual benefits to
local households, including “a 7 percent increase in average income,
driven by rises in wages and royalty payments, a 10 percent increase in
employment, and a 6 percent increase in housing prices,” according to a December 2016 study conducted by researchers at the University of Chicago, Princeton University, and the Massachusetts Institute of Technology.
Another study published in the American Economic Review
in April 2017 found “each million dollars of new [oil and gas]
production produces $80,000 in wage income and $132,000 in royalty and
business income within a county. Within 100 miles, one million dollars
of new production generates $257,000 in wages and $286,000 in royalty
and business income.”
Hydraulic
fracturing enables the cost-effective extraction of once-inaccessible
oil and natural gas deposits. These energy sources are abundant,
inexpensive, environmentally safe, and can ensure the United States
remains a leading energy producer far into the future. Therefore,
policymakers in the “Shale Crescent” should refrain from placing
unnecessary burdens on the natural gas and oil industries, which are
safe and positively impact their states’ economies.
The following documents provide more information about fracking and fossil fuels.
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