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Wednesday, Jan. 27, 2021

Did US gas prices fall as fracking boomed in the past decade?

Mia Dillon, Gigafact Foundry
yes

As fracking boosted U.S. oil output, government data shows that average retail gasoline prices fell from a high of $3.68 a gallon in 2013 to $2.25 in 2016. They have hovered at or somewhat above that level since. As of Jan. 25, 2021, gas averaged $2.48 a gallon.

The effect on retail gas prices of fracking—a controversial drilling technology which makes previously inaccessible deposits of oil and gas economically viable—is difficult for analysts to isolate. Oil is priced and traded globally, so U.S. output, whatever the source, is just one factor. Crude oil costs accounted for about 54% of the price of a gallon in 2019, according to U.S. government estimates.

Transport, refining and taxes influence prices, as do global trends in both oil markets and overall economic growth. Continuing increases in vehicle fuel efficiency tend to reduce overall demand.

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