Fracking Slashes Consumer Prices for Gas and Electric

natural gas boats - Tom Shepstone ReportsTom Shepstone
Shepstone Management Company, Inc.


Fracking, combined with horizontal drilling, brought forth a shale revolution that has slashed consumer prices for both gas and electric in this country.

The University of Pennsylvania’s Kleinman Center for Energy Policy just released a report showing Pennsylvanians have benefited enormously by fracking and horizontal drilling, the combination of which has been the shale revolution. This revolution completely changed the energy paradigm of not only the Commonwealth, but also the U.S. as a whole and worldwide. The detailed report includes voluminous documentation of the contributions of fracking in producing huge consumer savings, not to mention the economic development brought to rural areas and our increased energy security.


The details of the report, entitled “Pennsylvania’s Gas Decade – Insights into Consumer Pricing Impacts from Shale Gas (2007-2016),” are ca bit overwhelming but here are the highlights:

  • Pennsylvania gas consumers saw significant price decreases with the electric power sector experiencing the most significant reduction of 79%, a value of $7.32/Mcf. Residential retail gas prices fell by 40%, representing a decrease of $6.79/Mcf.
  • National average prices to all gas consumer sectors also declined. For example, the U.S. electric power sector experienced a 65% reduction, representing a decrease of $5.47/Mcf, and U.S. residential consumers enjoyed a 34% reduction, valued at $5.09/Mcf.
  • Historically, natural gas prices to Pennsylvania power plants have generally been above U.S. annual average prices. By 2016, annual average delivered electric power prices to Pennsylvania gas generators were $1.04/Mcf lower than the national average.
  • Since 2007, the purchased gas cost rates Pennsylvania natural gas distribution companies are permitted to charged their customers has decreased by 72% in real terms, from an inflation adjusted annual average of $11.76/Mcf in 2007, down to just $3.28/Mcf in 2016.
  • Comparing 2016 to a 2007 baseline, Pennsylvania overall gas demand grew by 50.5%, while U.S. gas demand grew by 18.5%.
  • Gas demand from Pennsylvania’s electric power sector (including from many new gas-fired power plants) increased by almost 250% between 2007 and 2016. During that time period, the electric power sector grew from the state’s smallest to the largest major sector of natural gas demand. U.S. average electric power sector demand grew by 46% during this time, also edging out other U.S. sectors to become the highest volume gas user.
  • Between 2007 and 2016, Pennsylvania’s annual natural gas production levels grew by almost 2,800%. The increase was larger than in any other major gas producing state, and made Pennsylvania the biggest driver of America’s 32% increase in annual natural gas production. In 2007, Pennsylvania produced less than one percent of the nation’s annual gas supply; by 2016 the state contributed over 16% of national annual production.

The facts are simply stunning; fracking has saved consumers enormous sums in both gas and electric costs while spurring the conversion of coal generating plants to gas, drastically reducing emissions of all sorts. It’s a case of winning everywhere one turns when it comes to fracking.



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