Shale revolution helps lower prices at pump, makes Colorado better
This column ran in the Grand Junction Daily Sentinel on December 7, 2014
Take a peek in your wallet. Chances are, you have a little extra cash in your pocket this holiday season.
Thanks to fracking and increased domestic drilling, if you filled up an SUV with gasoline in the past week you likely saved up to $20 or more over previous weeks. That extra money now can be pumped back into the Grand Junction economy as people buy more groceries or take in a movie or buy an extra Christmas gift.
As you may know, Colorado’s energy industry has been a real bright spot in our slowly improving economy in recent years, contributing nearly $30 billion to the state’s economy each year and supporting more than 100,000 good-paying jobs across our state.
But now, thanks to advances in hydraulic fracturing and horizontal drilling, consumers are beginning to reap the benefits of our domestic drilling through lower energy costs and cheaper gasoline for their cars.
Why? Because hard-working Americans in oil and gas fields from Colorado to North Dakota down to Texas and beyond have brought competition to the global oil and gas marketplace.
For far too long, Americans have been held hostage by foreign countries when it comes to oil prices. Trouble in the Middle East meant price spikes back home. But in recent years, as drilling has increased, we have helped to stabilize global markets while introducing competition to the marketplace. That drives prices down.
Now, suddenly, other major oil producing countries are trying to figure out how to react to this great success that we call the shale revolution.
Recently, the 12-nation Organization of Petroleum Exporting Countries declined to cut production, which means the market is flooded with more oil than we need, causing oil prices to tumble to their lowest point since 2009. The game, as one national reporter suggested, is that Saudi Arabia is trying to see just how low oil prices must go in order for U.S. shale production “to seize up like an unlubricated engine.”
But we can’t let that happen. Not only does domestic production create competition, and thus lower prices for consumers, it also helps build our energy independence, which makes us safer at home.
The shale revolution in the United States has added millions of barrels in domestic production and billions of cubic meters of cleaner-burning natural gas to the marketplace. Fracking and horizontal drilling has transformed our country from a major importer of fuel to a growing exporter.
Saudi Arabia produced an average 9.7 million barrels of oil a day in 2013, while Russia’s output was 10.1 million barrels a day. However, the U.S. now surpasses both countries when byproducts like condensate and natural-gas liquids are factored into the total, according to media reports.
U.S. production next year is predicted to reach its highest annual average since 1972.
And as extraction technologies advance, it will continue to be cheaper for us to produce our own natural resources.
That’s good news, which we should celebrate.
So as Governor John Hickenlooper’s task force on oil and gas comes to Rifle next week for its meeting, we need to remember how fortunate we are to be living in Colorado, which has some of the toughest regulations governing oil and gas production in the country, yet we still can develop our natural resources effectively and efficiently and protect our environment and quality of life.
Increased drilling in Colorado has not only created opportunities and jobs, but it has helped our national push for energy independence and has created competition, which is now benefitting consumers.
Let’s protect the system we have in place. It’s working.
Jack Hays is CEO and President of Resource West in Grand Junction, and serves on the Board of Directors for Vital for Colorado, a coalition of business leaders from across the state that support oil and gas development.
