Why aren’t we thanking oil and gas companies for stimulating family budgets and the national economy? Their tenacity has overcome critics who treat them as villains. Ordinary Americans are being rewarded with affordable energy.
Every penny saved on a gallon of gasoline puts $1 billion in the pockets of American consumers. Thanks to more drilling (despite federal barriers), the national average price per gallon is down from $3.70 this summer to $2.99 today. A further 5- or 10-cent drop is projected.
The biggest benefit is to the middle class.
That’s a $71 billion stimulus — minimum. In Washington D.C., a tax cut of this size would be trumpeted by politicians. And magnified. They would label it as $355 billion worth of middle-class benefits because they claim five years’ worth of credit with any and all financial legislation.
Affordable energy is a huge boost for everyday people. Savings from recent price drops, looked at annually, would save a typical household $400 of its annual spending of $2,000 a year on gasoline.
The timing can mean a merrier Christmas. Getting braces for the son’s or daughter’s teeth. Less belt-tightening, more savings, or maybe paying down debt. Or extra travel, flying as well as driving, because lower fuel costs also mean better airline fares.
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The pass-through benefits also reduce costs for businesses so they can prosper, grow and hire.
The boon is all because American companies are producing record levels of oil despite the political obstacles and taunts thrown at them. U.S. competition forced Saudi Arabia to drop its prices to around $80 per barrel, down over $20 since summer. This not only lessens dependence on foreign oil, but also undercuts Russia’s oil revenue that has financed Vladimir Putin’s military adventurism. Because its production techniques are no match for America’s, Russia needs prices of $100 per barrel of oil. And if the federal government would lift barriers, the U.S. could export oil to foreign markets, creating an even-larger boost to our economy.
Yes, we have that huge a supply — more than Saudia Arabia. Estimates of America’s recoverable oil run as high as 1.6 trillion barrels. With usage running around 7 billion barrels annually, that’s more than a 200-year supply, even if we don’t make more discoveries.
The myth of domestic oil scarcity is kaput. That myth has been used to bolster claims that we must spend billions of dollars each year on crony capitalism to subsidize green energy. Alternative sources such as wind and solar power are the most expensive kind, whereas fossil fuels offer affordable power that improves our quality of life and boosts our economy.
If foes of hydraulic fracking had their way, much of today’s drilling would have shut down and consumers would pay the price. If President Obama’s restrictions on public land also covered private land, much of today’s drilling would be shut down. If the radical agendas of the EPA had prevailed, we would not have today’s benefits from affordable energy and the drop in gasoline prices.
So where are the celebrations? Where are the ticker-tape parades for those who overcame the odds and are enriching our lives? It’s past due that we thank those who improve our lives by making energy affordable.
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Ernest Istook is in recovery from his 14 years as a U.S. congressman. Get Ernest’s free email newsletter. Sign up at eepurl.com/JPojD.