An estimated 43.5 million Americans plan to hit the road to celebrate Thanksgiving with their loved ones this week, and as they fill up the family station wagon, they will hopefully be reminded of the savings they have enjoyed at the gas pump over the past couple of years, made possible by hydraulic fracturing.
Consumers should also be thankful for Donald Trump’s election victory earlier in November. If he puts into place the policies he has promised to on the campaign trail and since Election Day, the economic benefits brought on by low oil and natural gas prices will be here to stay, which means it will cost less to visit relatives, heat our homes, keep the lights on, and even shop for groceries.
Hydraulic fracturing, commonly called “fracking,” and horizontal drilling technologies have made the United States the largest producer of natural gas in the world and have nearly doubled domestic oil production since 2008, creating significant benefits for consumers.
For example, gas prices averaged $3.80 per gallon in 2012. Today, thanks to the high oil production in North Dakota and Texas, filling the tank for Thanksgiving travel will only cost an average of $2.13 per gallon, according to AAA. The Energy Information Administration estimates low gasoline prices have saved the average American family $750 on transportation costs compared to just a few years ago.
Fracking will also make it more affordable for families to keep warm this winter. Space heating is the single largest energy expense people have in their homes, accounting for 45 percent of the average U.S. family’s energy bills. Natural gas is the largest source of heating fuel in the nation, heating 48 percent of homes. The rise in natural gas production caused natural gas prices to fall from a peak of $12 per million British thermal units (btu) in 2008 to around $3 today.
Additionally, 38 percent of homes are heated with electricity, and low natural gas prices have caused residential electricity rates to fall during the first half of 2016. If this trend continues for the remainder of the year, it will be the first time electricity prices have fallen over the course of an entire year since 2002, making it easier for low-income families to stay warm and keep the lights on.
Fracking has even reduced the cost of food. Natural gas is a primary feedstock for making fertilizer for corn. Low natural gas prices have led to new fertilizer plants being constructed throughout the country, which is one reason fertilizer prices have fallen dramatically since 2012. Low oil prices have also reduced ethanol prices, which impacts food prices because 40 percent of the nation’s corn crop is used to produce ethanol. Because corn is such an important feed for livestock, including the Thanksgiving turkey on your table, lower corn prices have directly led to a reduction in the cost of food at the grocery store.
Despite the fact President Barack Obama has frequently taken credit for increasing oil and natural gas production, America’s transformation from a country reliant on foreign oil imports to an oil and gas superpower occurred in spite of his policies, not because of them. For example, Obama rejected the Keystone XL Pipeline, and he has also delayed the final permitting of the Dakota Access Pipeline, which, if approved, would transport crude oil from North Dakota to Illinois.
Obama also proposed a $10-per-gallon tax on every barrel of oil—whether produced domestically or abroad—in the United States. This would have raised the cost of gas by up to 25 cents per gallon. Additionally, the outgoing president has instructed bureaucrats in the Environmental Protection Agency to push through as many costly regulations as possible before the Trump administration takes office.
President-elect Trump has vowed to roll back the costly regulations Obama has imposed during his time in office. Many of these regulations are unnecessary and have created steep cost increases on the American people without providing any substantial environmental benefits.
Trump also says he will repeal virtually all of Obama’s burdensome executive orders, including those restricting the energy sector. This means fracking production will likely increase, thereby improving the standard of living for every American. From the food on your table to the gasoline carrying you and your family to your Thanksgiving destination, a pro-energy Trump administration will give all Americans many reasons to be thankful for years to come.
Isaac Orr ([email protected]) is a research fellow specializing in hydraulic fracturing at The Heartland Institute. Follow him on Twitter @thefrackingguy.
Photo: Oil well near Mumford, Texas. Photo by Roy Luck.