Here Come Lower Energy Costs [Charts]

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Photo: MNTF via Flickr

The shale resource revolution and its affect on energy prices has now been discussed ad infinitum.Yet many consumers are still not seeing the effects on their energy bills. 

That is likely to change next year.

The Energy Information Administration today released its latest Short-Term Energy Outlook report, and things are looking pretty good for next year for the consumer.

The main story will be utilities switching to natural gas and liquids from coal and diesel — most of which will have been produced right here in the good ole U.S. of A.

Crude production is also set to boom. That won’t translate to a huge drop in pump prices.  But they’re not likely to surge either.

Overall, U.S. energy price trends overall look favourable for the economy. 

Natgas production has reached sky-high levels...

...which is causing prices to trend lower.

As a result, natgas consumption is set to surge...

...which will bring down everyone's electricity bills.

Meanwhile, North America is set to dominate in production growth of crude and liquids (including natural gas liquids and some biofuels)

Among non-OPEC producers, no one else will come close.

Most of the growth will come in crude.

It won't necessarily reduce gasoline prices, but will at least keep them relatively stable.

OPEC could actually provide some relief on oil prices as their capacities remain elevated.

Overall, energy costs will account for a smaller amount of GDP. We can't argue with this.

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