University of Michigan Professor Mark J. Perry has put together another brilliant take on how tectonic changes in the economy are paying off for consumers, this time looking at falling natural gas prices.
Using data from the EIA, for the years 2008 and 2011, Perry finds the following changes in how much less Americans are now spending on natural gas in various sectors.
Photo: Mark J. Perry/Carpe Diem
“Between 2008 and 2011, natural gas consumption was relatively flat for all users, so that the cost savings were entirely due to falling gas prices, and not decreased consumption,” he writes.
Looking at historical data, he then makes the following conclusions: For every $1 reduction in the price of natural gas
- Residential consumers save $5 billion annually
- Commercial consumers save $3 billion annually
- Industrial consumers save $7 billion annually
- Electric power companies save almost $8 billion annually
- Total savings of about $23 billion annually
SEE MORE: Citi’s guide to commodities