Crude oil priced at the storage hub in Cushing currently trades for much less than Brent crude priced in London, so the notion of producing enough oil to eschew imports seems like a potentially positive development for consumers.
But that may not necessarily be the case.
Oil will continue to be a globally traded commodity, even if the U.S. is getting its crude from Texas and North Dakota instead of Saudi Arabia and Venezuela, so the world market will set its price, said Rayola Dougher, senior economist at the American Petroleum Institute.
She said it is nearly impossible to predict what will happen to the price of oil if domestic production in the United States continues to rise, but an increasing supply of oil likely would apply downward pressure to prices and benefit American consumers.
Lower oil prices could translate into reduced gasoline prices.
Oil at $100 a barrel equates to gasoline at an average of $3.56 a gallon, while AAA estimates $60 oil could push gas prices down to about $2.75 a gallon. Gas prices typically are lower in Oklahoma because of the proximity to refineries here and in Texas.
Shawnee resident Sherry Fair welcomes the possibility of lower prices.
Fair, who commutes to Oklahoma City three times a week for work, said lower gasoline prices would allow her to save money. She estimates driving to work is a 100-mile round-trip each day.
“It'd be a little increase in pay for me, if gas prices went down,” said Fair, who does public relations and marketing work for rural hospitals. “When you think about it, $20 a week times 50 weeks, since you get two weeks of vacation, is $1,000 a year.”
Economist Steve Agee, dean of the Meinders School of Business at Oklahoma City University, said energy independence would bring more stability to the energy markets.
“If you look at the oil and gas industry, the biggest problem has been volatility of price. Price swings trickle down to almost every aspect of life,” Agee said.
“There are so many petroleum-based products we use, when those go up, it affects our ability to use discretionary income for things other than transportation.
“To the extent we develop our own supplies, it is going to help us smooth out that volatility.”
Price volatility is a concern for the U.S. Chamber of Commerce and its Institute for 21st Century Energy.
Steve Eule, the institute's vice president for climate and technology, said its focus is not on energy independence as much as energy security.
“The terms are interchangeable,” he said, “but from our perspective the important thing is that you have a reliable supply.”
Eule said increased oil and gas production from U.S. shale formations and Canada's oil sands can help limit price volatility, making it easier for families to budget their expenses.