What impact does U.S. shale development have on energy prices?

U.S. shale development means affordable domestic natural gas that benefits consumers – both individuals and families and commercial users, including the manufacturing sector. According to IHS CERA, U.S. shale development “increased disposable income by an average of $1,200 per U.S. household in 2012 as savings from lower energy costs were passed along to consumers in the form of lower energy bills as well as lower costs for all other goods and services.” IHS CERA also found “the lower natural gas prices achieved with shale gas production will result in an average reduction of 10% in electricity costs nationwide over the forecast period.”

As for oil prices, while the United States is and will continue to remain part of a global energy market, recent reports have found the increased supply of crude from American shale plays is having a stabilizing effect on global crude prices, which helps consumers because crude is the biggest cost in making gasoline. The American Automobile Association (AAA) has credited the shale boom with keeping gasoline prices about 40 cents lower than they otherwise would be.

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