The U.S. oil and gas boom will drive down prices

While addressing consumers’ No. 1 concern, energy independence will have unexpected consequences.

In an opinion column in yesterday’s New York Times, staff editor Benjamin Alter and Foreign Affairs assistant editor Edward Fishman laid out some good news and some bad news.

The good news is that the wave of new technologies for extracting oil and gas from shale rock formations has put the United States on track to surpass Saudi Arabia as the world’s top oil producer by 2017 and to achieve energy self-sufficiency by 2030.

The bad news is that oil prices will fall – to $50 a barrel within two years, according to one commodities researcher – which will “unleash unrest in regions crucial to American interests.”

Specifically, Alter and Fishman predict that oil-rich monarchies like Bahrain and Saudi Arabia could see Arab Spring-type unrest if their oil revenues decline.

They conclude that “Washington should expect a world far less stable than the one it is used to – and prepare to adopt an even more outward-looking foreign policy.”

There are plenty of foreign policy discussions that can and should take place about the questions Alter and Fishman raise.

On the domestic front, however, our research gives us reason to focus more closely on the good news.

For our Utility Pulse™ ’13 study, we asked, “What’s your biggest energy concern?” The largest group of respondents – almost 37 percent – answered, “America depends too much on foreign countries for energy, rather than tapping our own oil and natural gas resources.”

The next group – at just below 30 percent – picked “My ability to pay for energy.”

They were followed by 20 percent who cited “The environmental impact of our energy use” and 13 percent who picked “We’re using up our energy resources at the expense of future generations.”

Our Energy Pulse™ studies show Americans to be in a period of uncertainty when it comes to their ability to take control of their power bills.

Lower energy prices should be a good thing. But ironically, lower energy prices will mean less enthusiasm among consumers for making home improvements and adopting changes in behavior to bring about energy savings.