Unless you live in North Korea, Cuba, Venezuela, or one of the world's other communist or socialist nations, 2015 was a pretty good year.  This in spite of all that leftists in the U.S. and elsewhere could do to spoil it.

The U.S. economy advanced by 2%, Japan by 0.5%, and Europe by less than 0.5% (not good, but better than 2014).  India's economy grew by more than 7%, and China, if you believe state reporting agencies, grew by 6.8%.  Global wage growth was strong, especially in developing markets.  According to Aon Hewitt, wages were predicted to finish higher in 2015, with estimates for North America of 3.0%, Europe 3.7%, Asia Pacific 5.8%, Latin America 5.9%, and Africa 8.0%.

It could have been a lot worse if oil prices had remained high, as they were through the first half of 2014.  According to one estimate, a 45% decline in oil prices translates into an increase of 0.7% to 0.8% in global GDP.  Oil prices are now much lower than that: 65% below their recent highs.  A sustained decline of that magnitude should translate into an increase in global GDP of approximately 1.1%.

In many regions, including Europe and Japan, that was enough to keep the economy from slipping back into recession.  According to the Conference Board, 2015 global growth was 2.5%.  At that level, lower energy prices accounted for 44% of global growth.

Even more important is the impact of a potential multi-year decline in energy prices.  With global surpluses at record levels (some 3 billion barrels) and well completion delayed but not canceled by many companies, any increase in prices is likely to be met with new supplies coming onto the market.  Just this week, Saudi Arabia's oil minister pledged to increase production by as much as 14% in the event of future spikes in demand.  Already in 2015 the Saudis have raised production by one million barrels per day in spite of lower prices.  Iran and Libya are also planning to re-enter global energy markets.  Those new supplies may help maintain a ceiling for oil prices, at least in the near term.

One major caveat: geopolitical unrest or other unpredictable events could cause oil prices to rise quickly.  Energy prices can reverse for no clear reason, and it is impossible for anyone to accurately predict prices in the future.  Trading on energy prices is a dangerous game, one that should always be left to professionals.

Lower energy prices, if they persist, might not be good news for oil and gas producers in general, though many are adapting to the new market conditions, but they are excellent news for the global economy – and, of course, for the U.S. economy.   

The main contributor to this downward trend in energy prices was the advent of fracking in North America.  U.S. production increased from 8.7 million barrels per day in 2014 to 9.3 million b/d in 2015 (declining to an estimated 8.8 million b/d in 2016).  Over the past five years, the United States was by far the largest contributor to the increase in global energy supplies.  Along with Saudi Arabia's decision not to restrict its production, U.S. fracking had a dramatic effect on global energy prices, and thus on the global economy.

This sustained period of increased production has driven inflation-adjusted energy prices to their lowest level since the 1980s.  These low prices have benefited nearly all of the earth's 7 billion people, at least for those not living in North Korea, Cuba, Venezuela, etc.  

American consumers are saving an estimated $750 annually per family on gasoline costs alone.  Add to this savings from home heating (an additional $750), electricity, other forms of transportation, and consumer goods dependent on shipping, and those saving add up to more than $2,000 per family.  In Europe, Japan, and Asia, where prices of fuel and electricity are higher to begin with, savings are even greater as a percentage of family income.

No one can predict with certainty just how long low energy prices will last, but some credible sources are forecasting low prices through much of 2016.  According to the U.S. Energy Information Agency, recent futures contracts for March 2016 delivery of WTI crude averaged $44 per barrel.  EIA estimates that Brent crude prices for all of 2016 will average $56 per barrel.

Much could go wrong, especially with a feckless foreign policy from the White House and unstable conditions in the Middle East, Ukraine, and the South China Sea.  Add to this the danger of miscalculations on the part of central banks here and abroad, and 2016 could present some unpleasant surprises.  But as long as energy prices remain low, global GDP should be higher than it otherwise would have been, and the longer cheap energy persists, the better it gets.

History shows that sustained periods of low energy prices result in mounting periods of growth.  The period between 1982 and 2000, during which oil prices dropped to a low of $10 a barrel, is a conspicuous example.

There are reasons why the present decline in energy prices may not have as pronounced an effect this time around.  Energy costs constitute a smaller portion of most national budgets and constitute a smaller input cost in manufacturing.  Still, one would expect that a sustained decline in energy prices would, over time, produce a significant positive effect on the global economy.

What is undeniable is that the world's economy has benefited from low energy prices – and that low prices are the result in large part of North American fracking.  Whether oil prices remain depressed or rise back into the $60s, $80s, or above, it is certain that they will be less than they would have been without the technological advances of the past ten years.  It may be too much to say that fracking alone saved the global economy in 2015, but fracking had a lot to do with it. 

Jeffrey Folks is the author of many books and articles on American culture including Heartland of the Imagination (2011).