PACE has written often about the importance of fracking and inexpensive natural gas to America’s energy future. Now, a new report from the American Automobile Association shows that low gasoline prices saved Americans more than $115 billion dollars last year, compared to 2014 prices.
According to AAA, that $115 billion works out to $550 in savings per licensed driver in the U.S., or about $1,000 per household. That is a staggering benefit for American families dealing with stagnant wages. The report found that families used the extra money toward better education, healthcare, or housing, raising their overall standard of living.
The huge increases in domestic oil production, made possible by hydraulic fracturing or fracking, are the main reason energy prices have fallen so steeply. In fact, fracking was the single largest factor responsible for increasing disposable income for the average American family.
The reality is that low gas prices don’t just save people money; they also lead to job creation and general economic growth. In fact, since the 1970’s, higher oil prices have preceded every significant increase in unemployment, while low oil prices have preceded every decline in unemployment rates. The relationship couldn’t be more clear: cheaper energy means a better economy.
Oil and gas prices, of course, are not the only energy prices that affect the American standard of living. Electricity prices remain a significant part of the average family’s household budget. Fracking has saved money in that area, too, by putting downward pressure on the price of energy commodities in general.
Over the next four years, it would make sense for President Trump and Congress to work toward unleashing the full potential of fracking. Increases in production will continue to drive energy prices down, meaning more money in the pockets of Americans and additional job growth.