A surge in the unconventional production of oil and natural gas boosted U.S. household disposable income by an average of $1,200, according to a report released Wednesday by IHS, a research firm.
The report said that as the U.S. produces more energy, it will become less reliant on oil and other energy imports. The manufacturing process and price of goods and services have also become cheaper. Those savings are being passed on to consumers in the form of lower household energy bills, IHS said.
Electricity has become less expensive as some power plants turned to natural gas over coal to power areas they service.
“The unconventional oil and gas revolution is not only an energy story, it is also a very big economic story that flows throughout the U.S. economy in a way that is only now becoming apparent,” said Daniel Yergin, IHS vice chairman and energy expert.
Unconventional refers to oil and natural gas extracted through processes such as horizontal drilling and hydraulic fracturing, or "fracking."
IHS predicts the energy boom will continue trickling down to consumers in the coming years.
It said disposable income should increase by $2,000 in 2015 and by as much as $3,500 in 2025.
IHS also said that by 2020, more 3.3 million jobs will be supported because of growth in energy production. That should also boost the U.S. trade position by $164 billion by 2020.