Recently there was a blessed event at our house. No, it wasn’t that – my wife and I are long past child-bearing age. It was an arrival, though — the arrival of our monthly utility bill. We’re on the “budget plan,” meaning that our bills tend to stay level for a year or so at a time. What was “blessed” about getting a bill? It had gone down by roughly 15%, from $179 per month to a little over $149 per month.
The reason for the big expense “haircut” — good for over $355 a year to our bottom line — is that the cost of natural gas, which we use for heat and cooking, had gone way down over the prior year (from $3.71 in November of 2010 to $3.34 a year later). Not only did the reduction affect our biggest utility cost directly, it also apparently cut our electric bill, presumably because some of the electrons we buy are generated by gas-fired plants. The reason for the welcome decline can be summed up in one unfortunately freighted word: “fracking.”
Environmental activists may hate it, but there’s no question that hydraulic fracturing — the process of drilling horizontally into shale formations and then blasting the well with water (a new variant uses recyclable propane gel rather than water), sand, and additives aimed at keeping the gas flowing after the rock has been fractured — has brought gas prices down dramatically. In fact, a report from IHS Global Insight (quoted in the Wall Street Journal’s “Heard on the Street” column 12/7/11) quantifies the impact as follows: Without fracking, natural-gas prices would be roughly triple what they are now, and the annual savings per household will be about $926 between 2012 and 2015. That equals about $113 billion to the bottom lines of about 122 million households.
Luckily we aren’t poor, so we could have afforded our bill if it had stayed the same or even gone up $30 a month rather than going down. But we know a lot of people to whom the kind of savings we’re seeing would be very welcome news indeed. In fact, it could be the difference between making or missing a mortgage payment for some. For others, it could remove the necessity of choosing among heat, shelter, and food. In other words, at a time of high unemployment and underemployment it’s a very positive development for those struggling financially.