Fracking Has Brought Electricity Prices Down By 50%

Much to the chagrin of environmentalists, who have this utopian vision of an America powered by solar panels and wind turbines, the process of hydraulic fracturing has opened whole new worlds of oil and gas energy supplies. So much so that our reserves can now be measured in centuries.

But what does that all mean for you? Well, one thing it means is cheaper electricity prices:

A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50 percent and reduced investment in costlier sources of energy.

With abundant new supplies of gas making it the cheapest option for new power generation, the largest U.S. wind-energy producer, NextEra Energy Inc. (NEE), has shelved plans for new U.S. wind projects next year and Exelon Corp. (EXC) called off plans to expand two nuclear plants. Michigan utility CMS Energy Corp. (CMS) canceled a $2 billion coal plant after deciding it wasn’t financially viable in a time of “low natural-gas prices linked to expanded shale-gas supplies,” according to a company statement.

Mirroring the gas market, electricity prices have dropped more than 50 percent on average since 2008, and about 10 percent during the fourth quarter of 2011, according to a Jan. 11 research report by Aneesh Prabhu, a New York-based credit analyst with Standard & Poor’s Financial Services LLC. Prices in the west hub of PJM Interconnection LLC, the largest wholesale market in the U.S., declined to about $39 per megawatt hour by December 2011 from $87 in the first quarter of 2008.

Everything in our modern economy runs on either oil or some form of electricity. Cheaper electrical prices means a lower cost of doing business which, in turn, means a healthier economy.

Ironically enough, as we head into the 2012 elections, President Obama may get more of a boost from energy abundance made possible by fracking, a process he and his fellow leftist brethren would like to ban, than any of his policies.

By the way, natural gas is a much cleaner form of electrical generation than coal, not that you could tell from the reaction of environmentalists.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    Obama will put a stop to this. He wants the cost of electricity to “necessarily skyrocket.” 

    • Wesbutte

      That’s why he has to go asap.

  • Guest

    I heard a guy from Range Resources, one of the gas companies here in PA working the Marcellus talk about the “wet gas” by-products they’re getting out of the ground here as well.  Ethane, methane, butane, etc.  Every one of these by-products can be cracked from the natural gas and are used in hosts of industries such as plastics, textiles, pharmaceuticals and others.  Shell oil is looking to build a new $5 billion cracking plant in the area, creating 10-12,000 high paying jobs.  He also went on to say that with the abundance of gas and oil they’ve found so far, estimates range from 100-200 years, just with the technologies they have today – who knows about in the next decade.  He also said we have just overtaken Russia as the world’s largest supplier of natural gas and have gone from a net importer to a net exporter.  And all this is with the EPA still standing on the industry air-hose whenever they get a chance.  Imagine what would be happening if we let the industry do what they do best without the draconian oversight of the EPA. And no, that does not mean free rein to destroy the environment, it means sensible, safe and responsible use of our own natural resources.

  • SigFan

    I heard a guy from Range Resources, one of the gas companies here in PA working the Marcellus talk about the “wet gas” by-products they’re getting out of the ground here as well.  Ethane, methane, butane, etc.  Every one of these by-products can be cracked from the natural gas and are used in hosts of industries such as plastics, textiles, pharmaceuticals and others.  Shell oil is looking to build a new $5 billion cracking plant in the area, creating 10-12,000 high paying jobs.  He also went on to say that with the abundance of gas and oil they’ve found so far, estimates range from 100-200 years, just with the technologies they have today – who knows about in the next decade.  He also said we have just overtaken Russia as the world’s largest supplier of natural gas and have gone from a net importer to a net exporter.  And all this is with the EPA still standing on the industry air-hose whenever they get a chance.  Imagine what would be happening if we let the industry do what they do best without the draconian oversight of the EPA. And no, that does not mean free rein to destroy the environment, it means sensible, safe and responsible use of our own natural resources.

    • toomuchguvmint

      The petroleum industry needs to be commended for safely removing these harmful chemicals from the earth and making them available for human use!

  • SigFan

    Sorry about the double post – system is a little wonky today. Interesting that it put the first one up under my handle originally then when I deleted it from my dashboard it left it there as Guest. What’s up with that?

    • ellinas1

      I’ll tell you what’s up with that.
      You are the one that is stalking and cheapshooting  Hanni.
      Now I know who that “Guest” is.

      • SigFan

        You couldn’t possibly be any more wrong – as usual. By all means have Rob check it out.

  • mickey_moussaoui

    We are blessed with vast resources. We are cursed with a Marxist anti business poop head POTUS.

    ’nuff said

  • http://proof-proofpositive.blogspot.com/ Proof

    I don’t think electric rates have dropped in California, so some of you guys are really making out like bandits! *

    *Closed Captioning for the Thinking Impaired: “Making out” is not used here, as in what you did with your cousin in your father’s Oldsmobile. “Bandits” is part of a colloquial phrase, and should not be construed as any illegal activity or the condoning of such.

    • ellinas1

      I don’t think that electricity rates dropped there either.
      You see, Mr. Port edited the word “WHOLESALE” out of his post.

      Per the link Mr Port provided:
      “Mirroring the gas market,WHOLESALE ELECTRICITY PRICES have
      dropped more than 50 percent on average since 2008,……….”

      What Mr. Port deceptively wrote and reported to his readers:
      “Mirroring the gas market, ELECTRICITY PRICES have dropped more than 50 percent on average since 2008,….”

  • mikemc1970

    But fracking causes earthquakes and poisonings, Algore said so, and it also makes Gaia really sad. /useful idiot

  • awfulorv

    Two years ago I was paying $244.00 monthly, on a yearly basis, to APS, our regional electric co., Last year this was increased to $270.00 per month, and I’ve just finished paying them the new charges of $309.00 per month.  Being a gambling man, and always looking for a sure thing, I am offering odds of 1500 to 1 that these rates do not go down while Senor Obama  is sitting on his White House Throne. Any takers? 

    • Wesbutte

      I wish our bill were only 309.00.  Our last bill was almost 400.00 and it hasn’t been that cold this year——so the furnace hasn’t been kicking in as often.  Can’t wait to see Januarys bill.  Yykes.

      • http://pulse.yahoo.com/_RVIS42ZJEXB6TWZQHYCZF247II Willis Forster

        You must know than all the wind power subsidies are folded in your electric bill and it would appear that they have effectively cancelled natural gas low price savings.

  • borborygmi

    T Boone PIckens Baby.

    • Jfisher17

      Drill, baby, drill.

  • Dlao

    give us the link to the press confrence where any electric supplier in this country announced a reduction in rates

  • $7725169

    The secret toxic soup can’t stay underground forever.

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