Ohio Consumers Save Billions Thanks to Shale Development
Supply and demand says if you have more of something it often becomes less expensive. Apply that concept to a widely used energy source, like natural gas, and that means significant benefits for all Ohioans. A new study shows this rings true in Ohio by large margins. The study, which examined shale development’s impacts on natural gas prices, found Ohio consumers are saving over $1.5 billion due to lower prices resulting from development of the nation’s shale plays.
Keep in mind this only take into account the savings residents, businesses, and industry have saved in direct costs on natural gas. It doesn’t take into account price drops in electricity charges, manufactured goods or the countless other products that use natural gas as a primary component.
The study found natural gas production from shale has saved Ohio consumers $2.43 per mcf off the price of natural gas. Based on current consumption that equates to $214 in savings for residential customers, $1,366 for commercial users and $85,698 for industrial consumers per a year. The two charts below lay this out in pretty clear terms.
While the above shows the impact shale development has had on natural gas prices, the below shows the savings that have resulted for Ohio consumers.
Here are some additional key findings from the Continental Economics Study:
- The rapid expansion of shale gas production in the United States has created hundreds of thousands of new jobs directly and in supporting industries.
- Equivalently, the average wellhead price would be $0.46 per Mcf higher for each Tcf of shale gas not otherwise available.
Tuesday’s Continental study reinforces findings from an earlier IHS CERA study. It found that lower natural gas prices will add an annual average of $926 per year in disposable household income between 2012 and 2015. In Ohio it looks like we are already on the doorstep of this projection.
In addition to providing residents additional disposable income, these savings have lowered the make it or break it point for many commercial and industrial users. As a result, companies who left Ohio not that long ago are now coming back. Lower energy prices are paramount to a thriving economy and this study shows our economy will continue its upward path if we continue to embrace the responsible development of natural gas resources in the Utica Shale.