EDITORIAL: Drop in gas prices a holiday bonus for drivers

It seems Santa had a little something for U.S. drivers this year, too.

According to a Lundberg survey, the average price of a gallon of gasoline in the United States has dropped by 25 cents in the last two weeks, falling to its lowest level in almost six years, and down $1.25 a gallon since its peak in May.

The dramatic drop in gas prices is due, in large part, to the process of hydraulic fracturing — better known as fracking — which allows oil companies to reach vast amounts of oil that were previously unavailable, and has led to a modest domestic oil boom.

Data from the U.S. Energy Information Administration shows that U.S. oil production reached 8.5 million barrels per day in July, its highest level since April 1987. The EIA predicts that the number will jump to 9.3 million barrels per day in 2015, and says that without fracking, oil would already be at an unprecedented $150 per barrel, instead of well under $70, where it is today.

Also helping to hold gas prices down has been OPEC’s refusal to cut production. The organization, which has traditionally been able to affect the price of gasoline by regulating supply, announced that it would not act in response to the falling prices, which could lead to prices dropping even more. Without fracking and OPEC’s inaction, some economists say that Americans could be spending more than $4 per gallon. Instead, some parts of the U.S. are paying less than $2.

While experts aren’t quite sure how much more gas prices will drop or how long they will stay as low as they are now, Americans by and large are enjoying what amounts to a nice holiday bonus. The typical two-car family — hardly an uncommon phenomenon these days — which is used to spending, say, $400 in gas each month, has now seen that amount drop to roughly $300. And with median family incomes continuing to decline, the 25 percent American families have saved on gas over the last few months couldn’t have come at a better time. After all, who couldn’t use some extra cash around the holidays?

The drop in gas prices is a big win-win for the economy, both here in Las Vegas and nationwide. Locally, the average price for a gallon of regular unleaded gas is $2.54, while the national average is nearly 20 cents lower, at $2.35. The unplanned income can be put to good use, helping Americans get caught up their bills, put a few bucks aside for a rainy day, or finish their Christmas shopping.

Let’s hope we can keep riding this high — or, more accurately, this low — for many holidays to come.