Every December, the Energy Information Administration releases the following year’s Annual Energy Outlook, and December 2013 had some very appealing information for consumers! The report shows predictions that the production of oil and gas in the United States will increase in the coming decades. The report also details that the energy usage, especially fossil fuel energy, will decrease in that time. All in all, this means you can expect the cost of gas and oil to come down in the coming years.
The report’s authors stated that with the technological and efficiency improvements, “energy use per capita declines by 8% from 2012 through 2040.” The miles driven by cars has remained about the same for the past five years, and with the improvements made to gasoline engines, their ranges have increased, meaning people will be filling up less often. The way this impacts consumers is easy to see. Gas prices are extremely dependent on the wholesale rate of crude oil, and with the decreased demand, crude oil prices will drop. Charles Chesbrough, senior economist for IHS Automotive, said “We expect we’re going to see crude oil prices fall for a while.”
The United States is becoming more independent of foreign energy sources, particularly oil. This will help shelter the country more from the sudden increases in crude oil import costs due to violence in the Middle East, where a good majority of oil is imported from. Other factors like severe weather, seasonal demands, and production problems will still affect the rise and fall of oil production, and thus impact the gas price at the pump, but it is less likely we will be subject to major increases from wars. Ultimately, this will keep prices at the pump closer to $3 per gallon, which is miles better than the $5 per gallon some analysts had predicted.
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