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The Boston Consulting Group released a study late last month that shows just how much natural gas production can impact American families. And by impact, I mean, help them considerably.
The study revealed that the production of natural gas through exploration of shale reserves has driven down domestic natural gas prices by 50 percent since 2005. For consumers, that translates into a lot more than walking around money.
The report estimates that the savings for an average American earning $50,000 a year equals $425 to $725 a year. That means three to six percent additional discretionary spending a year. You can read more about the report at this link.
Jim Landers of the Dallas Morning News wrote about the study last week. In his piece, he noted how some of the boom in gas production has yet to hit consumers. For example, electricity prices were up 7.6 percent in the Dallas area from November 2012 to November 2013.
But the abundance of gas production, which is seen by many as a much cleaner energy source, could start changing things soon. As Landers reported, the savings for consumers could grow to $1,200 per household by 2020. That would equal about a 10 percent increase in discretionary spending.
So, there is the micro-impact of how being green can lead to growth. In this case, growth in the family pocketbook. That, of course, can lead to growth in local economies.
Indeed, all this new energy production already has juiced up local economies. The Morning News had a chart yesterday that showed the 10 fastest-growing metro areas in 2013. Midland, Odessa, Corpus Christi, Fargo, N.D., Bismarck, N.D., Sioux Falls S.D. and Cheyenne, Wyoming are among those top 10. What they have in common is being centers of strong energy production.
Most of that production is related to natural gas, which, again, is considered a green source of energy. In fact, the U.S. Department of Energy reported in 2012 that utility companies using cheaper natural gas to fire up their plants was a key reason CO2 emissions were at their lowest levels that year since 1992.
Of course, a number of people question the “fracking” techniques used to unleash gas trapped in shale formations. One of the more recent questions deals with whether earthquakes in places like North Texas are linked to injection wells. Those wells are where producers inject wastewater from their sites into the earth. Some think they may be causing the quakes.
I don’t know. I am not a scientist. But if science shows there are problems, obviously some kind of regulations will be needed to make sure the process of retrieving natural gas from shale formations is environmentally sound and safe.
But all this natural gas production is showing that it is possible to be green and grow. Midland’s economy, for example, grew by 7.3 percent. Odessa’s grew by 6.4 percent, while Fargo’s increased by 5.7 percent and Bismarck’s by 5.4 percent.
At the same time, a clean source of energy is being produced. Sounds like a good double-whammy to me.
Bill McKenzie is the Editorial Director for the George W. Bush Presidential Center.
William McKenzie is editorial director for the George W. Bush Institute, where he also serves as editor of The Catalyst: A Journal of Ideas from the Bush Institute.
Active in education issues, he co-teaches an education policy class at SMU’s Simmons School of Education and Human Development. He also participates in the Bush Institute’s school accountability project.
Before joining the Bush Institute, the Fort Worth native served 22 years as an editorial columnist for the Dallas Morning News and led the newspaper’s Texas Faith blog. The University of Texas graduate’s columns appeared nationwide and he has won a Pulitzer Prize and commentary awards from the Education Writers Association, the American Academy of Religion, and the Texas Headliners Foundation, among other organizations. He still contributes columns and essays for the Morning News and The Weekly Standard.
Before joining the News in 1991, he earned a master’s degree in political science from the University of Texas at Arlington and spent a dozen years in Washington, D.C. During that time, he edited the Ripon Forum.
McKenzie has served as a Pulitzer Prize juror, on the board of a homeless organization, and on governing committees of a Dallas public school. He also is an elder of the First Presbyterian Church in Dallas, where he lives with his wife and their twin children.Full Bio
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