Residential Consumers Saved $4.5 Billion, Commercial And industrial Consumers Saved $6.4 Billion

Residential Consumers Saved $4.5 Billion, Commercial And industrial Consumers Saved $6.4 Billion | By Tim Benson | November 27

The massive increase in domestic shale development, led by hydraulic fracturing (“fracking”), has caused natural gas prices to plummet in Virginia, according to a report from the Consumer Energy Alliance (CEA). Consequently, residents and businesses in the Old Dominion State saved $10.8 billion from 2006 to 2016.

In 2016, natural gas prices were one third lower in Virginia than 10 years prior, leading to $4.5 billion in savings over that period for residential consumers. This is significant because roughly 870,000 Virginians live in poverty, and the average Virginia resident at or below the poverty line spends around a quarter of their take home pay on energy costs. Additionally, commercial and industrial consumers saved $6.4 billion during the same period.

“Natural gas is essential for manufacturing processes,” the report states. “Nationwide, manufacturing accounts for about 80 percent of industrial natural gas demand with primary uses including drying, melting, machine drive, and space heating. According to the Virginia Manufacturers Association, Virginia is home to more than 5,000 manufacturing facilities that in total employ over 200,000 residents. These facilities contribute $34 billion to Virginia’s gross state product and account for over 80 percent of the commonwealth’s exports to the global economy.”

“For the nearly 8.5 million residents who call Virginia home, it is important that they understand how supporting productive energy policies can help lower energy costs for cash-strapped families and small businesses while also providing stronger opportunities for manufacturers and businesses to create jobs for those who need it most,” said CEA Executive Vice President Michael Whatley in an accompanying press release.

Moreover, the oil and natural gas industries supported more than 125,000 jobs in Virginia in 2015. These vital industries produced more than $6.9 billion in labor income and accounted for $11.97 billion in economic impact, according to a 2017 American Petroleum Institute study prepared by PricewaterhouseCoopers.

It should come as no surprise that shale development is spurring economic growth across Virginia. Fracking delivers $1,300 to $1,900 in annual benefits to local households, including “a 7 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices,” according to a December 2016 study conducted by researchers at the University of Chicago, Princeton University, and the Massachusetts Institute of Technology.

Fracking enables the cost-effective extraction of once-inaccessible oil and natural gas deposits. These energy sources are abundant, inexpensive, environmentally safe, and can ensure the United States remains a leading energy producer well beyond the twenty-first century.

Therefore, Virginia policymakers should refrain from placing unnecessary burdens on the natural gas and oil industries, which are safe and positively impact the Old Dominion State’s robust economy.

The following documents provide more information about hydraulic fracturing and fossil fuels.