The shale gas revolution is starting to pay small dividends for U.S. consumers. As electrical utilities rush to switch from coal to gas, peak electricity rates have fallen in nearly every market. According to the U.S. Consumer Price Index, utility gas service for things like heating and cooking is now 13 percent cheaper than it was 12 months ago. That’s great and all, but taken together those savings don’t add up to much. Electricity and gas bills account for only about 4 percent of our total spending.
While the recent bounty of cheap natural gas helped revive U.S. manufacturing, which has added 500,000 jobs since February 2010, its broader benefits to the U.S. economy are harder to come by. There simply aren’t enough uses for cheap natural gas to make a big impact on growth or costs; not yet, at least. As a result, natural gas producers have fallen victim to their own success. They’ve drilled so much so quickly that they’ve crashed the price to below $3 per million Btu. In many cases, drilling natural gas these days is a losing proposition, which is why it’s slowed down so much. There are only 484 natural gas rigs operating in the U.S. right now, about half as many as a year earlier.