The U.S. oil and gas boom added $1,200 to disposable income in 2012.
Last week we reported on a study showing that the U.S. oil and natural gas revolution may be the country's best antipoverty program, and the evidence keeps coming. A new report from IHS Global Insight estimates that fracking added the equivalent of a cool $1,200 to real household disposable income on average in 2012.
Lower costs for raw materials were passed on to consumers via lower home heating and electricity bills and lower prices for other goods and services. Wages also increased from a surge in industrial activity. On present trend, IHS predicts that unconventional oil and gas will contribute more than $2,000 a year by 2015 and $3,500 by 2025.
Overall the industry lifted economic growth by $283 billion last year—$533 billion in 2025—and was responsible, ahem, for $74 billion in federal and state tax payments. The politicians should be doing cartwheels that the figure will rise to $138 billion in 2025.
IHS's particular focus is on what the study calls a growing manufacturing renaissance aided by the boom in affordable energy. It's a classic American story of innovation, human ingenuity, risk-taking and capital investment, not subsidies or the 47 federal job-training programs. The irony Washington will never appreciate is that fracking has done more for the less fortunate in the Obama years that all of its ministrations combined.