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Page added on September 6, 2013
Households Gained $1,200 Thanks to Surging U.S. Oil Production
About $1,200 a year. That’s what the average American household gained in disposable income in 2012 as a result of surging U.S. oil and natural gas production in unconventional energy plays, according to research firm IHS.
IHS reaches its conclusion by calculating lower bills for natural gas and electricity — thanks to swelling supplies of natural gas—as well as cheaper prices for a number of goods and services. The firm also factors in higher wages and jobs generated by the oil and gas industry.
All in all, it finds that the “unconventional revolution” contributed $163 billion to U.S. households last year. And its estimates only increase over time. By 2020, IHS believes unconventional energy production will contribute just over $2,700 to the average household. By 2025, it reaches $3,500 a year.
These numbers, part of a new report released Wednesday, personalize the U.S. energy boom in a unique way. Piles of research try to calculate the energy industry’s impact on gross domestic product, trade imbalances and tax revenues. Just last week, for example, the White House economic advisors said an upward revision of second-quarter GDP was due in large part to lower petroleum imports. But economists rarely attempt to quantify the benefit to average Americans.
“We wanted to make this real to all Americans,” said John Larson, IHS vice president and chief author of the report.
The Energy Information Administration expects U.S. crude oil production to increase more than 25% between 2012 and 2014—from 6.5 million barrels a day to 8.2 million. It expects marketed natural gas production to stay relatively flat in that time.
IHS looked exclusively at gains from “unconventional” production, oil and natural gas extracted using a combination of horizontal drilling and the hydraulic fracturing technique. Until recently, these unconventional energy resources were considered to be too expensive to tap.
The study was funded in part by the American Petroleum Institute, National Association of Manufacturers and other industry groups that gain from increased energy production.
7 Comments on "Households Gained $1,200 Thanks to Surging U.S. Oil Production"
noobtube on Fri, 6th Sep 2013 4:13 pm
State-run propaganda arm — Wall Street Journal? Check
Corporation-written “news”? Check.
Air of legitimacy? Check.
Business as usual for the average American trash-producing idiot? Check.
The United States has a bright future ahead.
DC on Fri, 6th Sep 2013 4:36 pm
ROFL@Wall Street Urinal!
Even if the fake ginned up ‘savings’ were real(they are not), stealth inflation of real goods would more than wipe out any these phantom savings.
But, amerikans are not just subject to constant war propaganda, but to economic propaganda as well.
Remember the scene from 1984 where Winston hears on the news that the chocolate rations *reduction* is being hailed by the govt as in increase?
Well, see above! And expect a lot more decreases in the quality of life being hailed as the exact opposite. Ie,we expected 50,000 people to lose there jobs this month, but only 40,000 did. Good times are here again! And so on….
shortonoil on Fri, 6th Sep 2013 4:45 pm
Of course, Disposable Personal Income for 99% of the population has been falling for years, and the percentage of the population in the labor force is hitting all time lows. I wonder if they want to take credit for that also? In the mean time the price of crude keeps right on going up.
actioncjackson on Fri, 6th Sep 2013 6:38 pm
I’m sure we’ll all be getting ‘raises’ right up to the point when the wheels fall off.
slippery slope on Fri, 6th Sep 2013 7:43 pm
Where’s my $1,200? I could really use it right now.
Mike999 on Fri, 6th Sep 2013 8:10 pm
And don’t forget cancer oncologists will also see raises now and in the coming years, as fracking cancer spreads! So that will also add to the GDP!
Plus respiratory problems, so the medical community wages will grow over the next 20 years!
Is not fracking great?
BillT on Sat, 7th Sep 2013 3:05 am
At a real inflation rate, you lost. It is not the numbers, it is what it buys at the market and the gas station.
1962 Gasoline $0.29 per gallon or 1/5 of an hour at minimum wage.
2013 – Gasoline $3.50 per gallon or 1/2 of an hour at minimum wage.
How wealthy do you feel now?