Lower oil prices help poor and middle-class families. In June 2014, oil traded at approximately $115 a barrel. Now, the price of a barrel is about $47.76. There were many reasons for the collapse in oil prices. For example, OPEC, a cartel of top oil producing countries, continued drilling for oil even though prices were dropping. But, equally important was the fracking boom. Fracking allowed for oil to flood the market lowering its price.
Drilling for more oil helps poor and middle-class families, and the U.S. must do more of it. Additionally, CNBC reports: “The US holds more oil reserves than Saudi Arabia and Russia, the first time it has surpassed those held by the world’s biggest exporting nations, according to a new study.”
Low oil prices and more oil reserves make U.S. families richer without them receiving an increase in their income. If families spend less on gas, they are able to save or spend more on other goods—making them richer.
Yet, with all its benefits, groups and presidential candidates want to stop fracking. Hillary Clinton, the presumptive Democratic presidential nominee, said: she would regulate it so thoroughly that “I do not think there will be many places in America where fracking will continue to take place.” Banning fracking and other methods of extracting oil from the ground will increase the price of energy.
If fracking was banned, supply of natural gas would fall dramatically and prices for gas and electricity would increase. Natural gas makes up 33 percent of energy produced in the U.S making it a top energy source. In 2014, families spend about 20% of their income on energy. Oil prices have remained low even with tensions between oil-states Iran and Saudi Arabia. As the Daily Caller reports: “There remains a lot of excess supply on global markets right now, thanks to increased production from unconventional sources like fracking.” Not drilling means higher gas prices.
Newer renewable energy is unaffordable to poor and middle class families. The rich can absorb energy price increases, but the poor cannot. For example, the new Tesla models cost $70,000.and more. Middle class families usually make that in a year.
Forcing the poor to pay more for energy is unfair and regressive policy. U.S. energy policy should make citizens wealthier—not poorer. Any person or policy aimed at making energy more expensive is taking money from people who need it most.