The domestic energy boom is freeing up billions in cash for American families, just in time for the holidays, today’s New York Times reports:
The steepening drop in gasoline prices in recent weeks — spurred by soaring domestic energy production and Saudi discounts for crude oil at a time of faltering global demand — is set to provide the United States economy with a multibillion-dollar boost through the holiday season and beyond.
The windfall, experts say, comes at a critical moment, with the American economy on the upswing but facing headwinds from other quarters, including weaker exports because of slow growth overseas. Gas prices recently dropped below $3 a gallon for the first time since 2010, while crude oil prices have fallen by more than $25 a barrel since midsummer, settling on Thursday just above $74.
“If oil prices stay between $75 and $95 a barrel, we would see the kind of stimulus package that the Federal Reserve or Congress could never do,” said Douglas R. Oberhelman, the chief executive of Caterpillar, the multinational maker of heavy construction equipment.
The impact is especially significant for low- and middle-income Americans, who have been largely left behind by the anemic economic recovery that began in the middle of 2009. Even as the job market has improved, most workers have received only modest wage increases. Median income remains roughly 5 percent below the peak it hit in 2007.
Indeed, this story comes only a few weeks after a new industry study found that fracking saved Americans nearly $250 billion in 2013 alone.
But this welcome development might not last long, as the Obama administration prepares to move forward on several executive actions—“a series of climate and pollution measures that rivals any president’s environmental actions of the past quarter-century”—that would severely restrict the traditional energy sector, Politico reports:
The coming rollout includes a Dec. 1 proposal by EPA to tighten limits on smog-causing ozone, which business groups say could be the costliest federal regulation of all time; a final rule Dec. 19 for clamping down on disposal of power plants’ toxic coal ash; the Jan. 1 start date for a long-debated rule prohibiting states from polluting the air of their downwind neighbors; and a Jan. 8 deadline for issuing a final rule restricting greenhouse gas emissions from future power plants. That last rule is a centerpiece of Obama’s most ambitious environmental effort, the big plan for combating climate change that he announced at Georgetown University in June 2013.
This isn’t just a federal effort, either. As the Hill noted recently, environmental groups are pursuing more regulation against traditional energy at the state and even local levels:
Citing public health and environmental concerns, environmentalists and some Democrats have pressured the administration to move forward with the strongest possible standards for fracking on federal lands.
[American Petroleum Institute vice president for regulatory and economic policy Kyle] Isakower said there are some 202 fracking bills and regulatory proposals pending in 34 states.
He said the push for stringent rules could undermine a domestic energy boom that has acted as a $1.1 trillion global economic stimulus and lowered gas prices across most of the U.S. below $3 a gallon.
Enjoy the extra cash while it lasts.
— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum.