A recent study conducted by the American Petroleum Institute (API) showed Americans are saving nearly a dollar per gallon when they fill up for gas because of the innovative horizontal drilling and hydraulic fracturing techniques that gave us access to significantly more domestic oil and natural gas reserves.
This development has gas prices as low at $2.29 per gallon in some communities and AAA reported nationwide gasoline prices are set to drop below $3.00 per gallon on November 1st. Prices this low would have been unimaginable just a few years before the boom in American energy production.
API Vice President Kyle Isakower explained what policymakers should learn from this boom in a statement, “It’s important for policymakers to recognize that the U.S. energy revolution was not a lucky accident, but the result of decades of American innovation aimed at unlocking our resources here at home.”
In other words, the dramatic changes natural gas and oil have undergone is the ultimate example of free-market—not government mandated—innovation, and the results speak for themselves. For example, the study found that U.S. oil production that utilizes horizontal drilling and hydraulic fracturing jumped from 11 percent of U.S. production in 2008 to 48 percent of U.S. production in 2013. According to the Energy Information Administration this dramatically increased overall U.S. oil production too from around 158 thousand barrels a month in 2008 to over 268 barrels this August, which has helped to lower prices.
Most importantly this makes a huge difference for middle class and lower class Americans who have been struggling to make ends meat in a stagnant economy. For instance, the Consumer Expenditure Survey shows that the lowest quintile of income earners spends twice as much as the highest quintile of income earners on gas as a portion of their income. Having access to affordable transportation not only gives Americans freedom to go where they choose, but also dramatically expands job and housing opportunities too.
In addition to direct benefits to consumers, more oil production in the United States makes us more secure and less dependent on unstable regions for oil imports. The best way to continue to increase energy security is to responsibly unleash the power of markets in order to incentivize further innovation and productive use of our national natural resources.
API’s Isakower explained that government policies threaten continued prosperity and safety, “To build that momentum and strengthen our position as an energy superpower, it’s critical that policymakers turn aside duplicative regulations on hydraulic fracturing and ensure that U.S. consumers can benefit from energy production on federal lands that remain off-limits.” Lets make sure that we continue to benefit from innovative technologies like horizontal drilling and hydraulic fracturing and support free-market energy policy.