Newt Gringrich’s Prediction May Be Borne Out

Newt Gingrich

Newt Gingrich

When former U.S. House Speaker came to the Lake in the Hills Airport rally, the poster on the podium was a picture of a gas pump with “2.50” under it.

Gingrich was pushing the goal of $2.50 a gallon gasoline.

Based on the drop in the price of natural gas since fracking started, Gingrich said that the price of gasoline could drop to his predicted price. (Read the article here.)

Today gasoline at the station on Route 14 and McHenry Avenue is $2.78.9.

Part of the reason is that Saudi Arabia is not limiting production to keep prices up, as it has done previously.

Part of the reason is the result of increased fracking oil production in the United States.

However, as the price of oil decreases, the incentive to invest in the relatively expensive fracking exploration decreases.

So, by driving the price down, Saudi Arabia cuts the incentive for further investment in this country.

It also cuts the oil revenue for Russia and Iran, who are supporting Saudi Arabia enemy ISIS.

In Illinois, fracking regulations have just been promulgated.

Only time will tell if the boom that has lifted South Dakota’s economy will follow in Southern Illinois or whether delay in allowing fracking will have resulted in its economy missing the boat.

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