In These 13 States, Gas Is Selling for Below $2 a Gallon
Natalie Johnson / @nataliejohnsonn / December 15, 2014
URL of the Original Posting Site: http://dailysignal.com/2014/12/15/13-states-gas-selling-2-gallon/
Photo: Getty Images
Just two weeks ago, a sole gas station in Oklahoma swept headlines for dropping gas prices below $2 a gallon. Today, 13 states have joined that list, and the trend is expanding.
Gas for less than $1.90 a gallon can be found in at least one station in Oklahoma, Louisiana and Ohio, according to CNN. CNN cites 10 additional states– Alabama, Arizona, Colorado, Indiana, Mississippi, Missouri, Nebraska, New Mexico, Texas and Virginia– that now have gas below $2 a gallon.
“What we’re seeing is markets at work,” Heritage Foundation economist Nick Loris said. “Significant increases in supply and a relatively weak demand is lowering prices not just at the pump, but for most of the goods and services we pay for.”
The national average has dipped to $2.55 a gallon, marking the lowest drop since October 2009, according to AAA’s Fuel Gauge Report. Just a year ago, that average was $3.23.
“Oil prices are plunging because there is so much oil in the market,” AAA spokesman Mark Jenkins said in a press release. “It’s unclear exactly how long this will continue, but gas prices will keep falling as long as oil prices do.”
Jenkins said oil prices are predicted to continue dropping through the first half of next year, increasing the “likelihood of $2 gasoline.” CNN partially attributes this drop in prices to decreased oil demand because of the “economic slowdowns” across Europe and Asia along with increasingly fuel-efficient vehicles. Another key reason for the drop is the increase in U.S. output. Domestic oil production is at a three-decade high, contributing to the increase in supply and driving down costs.
But Loris cautions against celebrating too soon.
“The falling prices are certainly a welcome relief,” he said. “But that doesn’t mean policymakers should ignore the government-imposed regulations and restrictions that artificially inflate prices and prevent markets from working more efficiently.”
What Did You Say? 
American workers and motorists got some badly-needed relief this week when the price of oil plunged to its lowest level in years. The oil price has fallen by about 25 percent since its peak back in June of $105 a barrel. This is translating to lower prices at the pump with many states now below $3 a gallon.
At present levels, these lower oil and gas prices are the equivalent of a $200 billion cost saving to American consumers and businesses. That’s $200 billion a year we don’t have to send to Saudi Arabia, Kuwait and other foreign nations. Now that’s an economic stimulus par excellence.
Oil prices are falling because of changes in world supply and world demand. Demand has slowed because Europe is an economic wreck. But since 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.
Without this energy blitz, the U.S. economy would barely have recovered from the recession of 2008-09. From the beginning of 2008 through the end of 2013 the oil and gas extraction industry created more than 100,000 jobs while the overall job market shrank by 970,000.When the radical greens carry around signs saying “No to Fracking,” they couldn’t be promoting a more anti-America message. It would be like Nebraska not growing corn.
We are just skimming the surface of our super-abundant oil and gas resources. New fields have been discovered in Texas and North Dakota that could contain hundreds of years of shale oil and gas supplies.
Here’s another reason to love the oil and gas bonanza in America. It’s breaking the back of OPEC. Saudi Arabia is deluging the world with oil right now, which is driving the world price relentlessly lower. The Arabs understand–as too few in Washington do–that shale energy boom is no short term fad. It could make energy cheaper for decades to come. As American drillers get better at perfecting the technologies of cracking through shale rock to get to the near infinite treasure chest supplies of energy locked inside, we will soon overtake Saudi Arabia as the dominant player in world energy markets.
You can’t have a cartel if the world’s largest producer–America–isn’t a member. OPEC will never again be able to create the level of economic turmoil that the Arab members of OPECs engineered in the 1970s with their oil embargo. And by the way: lower oil prices place increased pressure on Iran’s mullahs to abandon their nuclear program and curb Putin’s capabilities to engage in East Europe aggression.
Yet the political class still doesn’t get it. As recently as 2012 President Obama declared that “the problem is we use more than 20 percent of the world’s oil and we only have 2 percent of the world’s proven oil reserves.” Then he continued with his Malthusian nonsense, “Even if we drilled every square inch of this country right now, we’d still have to rely disproportionately on other countries for their oil.” Apparently, neither he nor his fact checkers have ever been to Texas or North Dakota. And we don’t have 2 percent of the world’s oil. Including estimates of onshore and offshore resources not yet officially “discovered”, we have ten times more than the stat quoted by the president–resources sufficient to supply hundreds of years of oil and gas.
America, in sum, has been richly endowed with a nearly invincible 21st century economic and national security weapon to keep us safe and prosperous. The plunge in gas prices is just one visible sign of this supply explosion. Think of how much bigger this revolution could be if we started building pipelines, repealed the ban on oil exports, expanded drilling on public lands, and stopped trying to punitively tax and regulate the oil and gas.
For much of the last forty years, oil’s periodic price spikes have remained a constant threat to growth. Higher consumer energy costs as well as increased industrial production costs weighted on the economy. Now oil is one of the primary accelerators; the new big drag on the economy is politicians who despise the carbon-based industry.