This past weekend, the cost of fueling my vehicle was far less than it had been just last month and, happily, I am not alone. According to the Energy Information Administration, gasoline is at the “lowest average price since January 31, 2011.”
How do lower prices affect people? Fueling at the pump across from me was a cab driver who relayed his thoughts on the price: “I’ll take it!” he said with glee. “Every cent lower is pure profit for me!”
Expanding on his excellent point, because petroleum is a fundamental fuel of our industrial economy, “every cent lower” in its price ultimately means not only cheaper gasoline, but also cheaper production, cheaper goods, and lower cost of living for you, me, and everyone. When petroleum is cheaper, food is cheaper, as transportation costs are cheaper; goods made of plastic, which is made of petroleum, are cheaper; air travel is cheaper; and on and on.
Why are the prices for petroleum falling? They are falling in part because demand across the globe has dwindled due to coercively-throttled economies. But a large part of the reason for the lower prices is that many good people and businesses in the oil industry are and have been for decades developing technologies that increase production and decrease costs, which, in turn, render lower prices at the pump and elsewhere.
As Stephen Moore explains in a recent article:
[S]ince 2008 the U.S. has increased our domestic supply by a gigantic 50 percent. This is a result of the astounding shale oil and gas revolution made possible by made-in-America technologies like hydraulic fracturing and horizontal drilling. Already thanks to these inventions, the U.S. has become the number one producer of natural gas. But oil production in states like Oklahoma, Texas and North Dakota has doubled in just six years.
So, in addition to saying “I’ll take it!”—let’s remember also to say “Thank you!” to the frackers and other energy producers who deliver the fuels on which our modern lives and happiness depend. And let’s do everything we can to free them from government regulations, which throttle their ability to deliver these fuels efficiently and at low prices.
- Vindicating Capitalism: The Real History of the Standard Oil Company
- European Industry Stagnates as Americans Prosper with Fracking