Im ali velshi, this is real money. Americas energy boom is rewarding americans with lower prices at the pump, but theres a price to be paid for that. Cheaper fall prices eating into job creation in the country. Ill tell you how in a moment. First, look at what we are talking about. Since june gasoline prices fell 20 . The National Average price for a gallon of unleaded selfserve gasoline is 2. 96 a gallon and fulling. The move below the 3 is welcome news to americans who have not seen prices this low since 2010. They can thank all the new Domestic Oil Production flooding the market with crude, bringing prices down to their lowest level in three years. Oil futures today settled at 77. 91 a barrel. Since june 20th Oil Prices Fell from 107 a barrel to where they are today a 27 drop in four months. Advances in nonconventional production methods like fracking in texas and north dakota, and deep sea drilling in the gulf of mexico are making america a leading producer of oil. The Falling Energy prices have a downside. To maintain production levels where they are, domestic producers need oil to trade around the 80 a barrel mark in order to turn a profit, and confidently invest in future expansion. Now, Domestic Production is expected to rise to 9. 5 Million Barrels a day by the end of next year. Thats the highest level this country will have seen in 45 years. But all these now fangled technologies deployed to get the oil out of the ground are more costly than conventional drilling. The costs are well worth it when oil trades above 100 a barrel. Think about hydraulic fracking or fracturing. This is more expensive than sticking a drill into the joined in texas, the way they used to do. These prices become harder to sustain, the more expensive technologies, are tougher to explore when oil has a 7 in front of it, like now. If thats where we are heading, the expansion that the industry is seeing, including new jobs for americans in key Energy States could take a hit. There may be an economic price to pay if the American Energy boom stalls because of lower oil prices. Listen to this. The energy boom played a role in creating jobs. Since 2007, the oil and gas sectors have seen a 40 jump in the number of workers they employ. Now Falling Oil Prices threatens that. Thats because the boom relights on a form of drilling. Hydraulic fracturing or praccing can double fracking can double or tripleub or triple th in a 6year period between 2007 and 2013, 162,000 jobs were created in oil and gas. Most were concentrated in texas, north dakota, oklahoma, and new mexico. States with shale oil and gas formations. Job gains extended behind the industry. Demands boosted instruction and jobs in states like north dakota. In september unemployment in the state dropped to 2. 8 , the lowest in the nation. A jobless rate that low means north dakota has full employment. Anyone looking for a job will find a job. Some restaurants in the state are said to offer signup bonuses for new staff. Because of the expensive production costs, all that is threatened by Falling Oil Prices. According to Financial Research firm, about onethird of u. S. Shale Oil Production would be unprofitable if Oil Prices Stay where they are. Lets explain the havoc that could be served with the head of the department of economics. Thank you for being with us. This is not something that we were looking at three mondays ago or six months ago when oil traded above 100 a bar em. Something we saw for a long time. I think its true. There are a number of things happening. We have the increased supply from the United States because of shale, and decreasing demand in other areas of the world, japan and germany. And declining demand in the u. S. Was driving season is over. What is the point at which you start to worry about investors, trillers, producers in the United States deciding theyll moth ball a production because the price is coming down. Are they sitting there saying its 77 a barrel. Its fine, it will come back, or are they saying that we have to start worrying about this . Approximately depend on the investor and the location, because the cost to truce oil from conventional sources is less than shale sources. I think you alluded to the fact of the matter is its in the 70 to 80 a barrel that you need to break even. If you see a sustained price of 77, 80, its not much of a profit margin. My guess is youd see a reduction in the drilling of wells, and exploration of new wells. Probably there are investors looking at this, trying to engage how long this price may continue. Anyone with a 401k, if you look for culprits, if its suffering in performance, the Energy Sector is an area responsible for it. I think a lot of viewers will say so what, im not crying tears for copicle phillips and exxonmobile. Translate it to the workers, the benefits to the economy diners and restaurants, places in north dakota, and places like that where fracking created a new economy. Sure. You have to look at both sides. On one side you see lower prices for energy, gas under 300 a barrel, providing more money in everyones pocket to buy goods and services. When you look at places like north dakota, or young town, you see an economy that is concentrated in the Energy Industry, you have more people coming in and working in the industry, you need more goods and services, more diners, restaurants. If the demand for Oil Production and krilling declines, you dont need the demonstrate you see in other services, as you see the oil industry reducing its impact in the area, youll see a reduced demand for people working in the diners. People that made decisions based op, you know, what it looked like six months or a year ago. Its in terms of housing and expenditures. They may find a different reality to what they sue 68 months ago. Are you worried about oil in the 70s. Is this a blip. Is it the future. . Ex. It depends on many things. We have increased production in the u. S. It is a higher cost production. Theres a lot of production from other parts of the world, from o. P. E. C. , and so i think its going depend upon a number of things. It depends on what happens to world demand, does it continue to be soft. Is there uncertainty because of political unrest in some parts of the world. You know, does o. P. E. C. Try to maintain a market share by giving premiums, reducing premiums of oil they sell in certain parts of the world. All of these things play into it. Is it a concern. In the immediate period, i would think the reduced prices in things like gasoline is a boom for the larger portion of the u. S. And across the world. That also is true for manufacturers, because they use a lot of energy. There are definite positives here. Now, if we are looking specifically at the Energy Industry in the United States, if we see continued 70 barrel and oil, that will reduce what is produced and productive. So people who are looking towards Energy Independence and being a net exporter of oil from the u. S. In a couple of years, that probably goes away. It brings a different reality, because do we have production in the u. S. , or do we have imports from other parts of the world, but there are costs associated with that, maybe in terms of security or. Politics. Keeping secure areas in those ears. Those areas. There are a lot of people benefitting who are not the same people benefitting from increased Oil Production. Its a mixed bag. Thank you jenny for being with us, an economics professor at the university of new mexico next, big spenders bank rolled some of the key midterm races. When we come back i look at the deeppocketed donors lining up for the 2016 president ial elections. Youre watching real money, tweet me or hit me up on facebook. Keep it here. Besides the republicans big win on tuesday, the 2014 midterms will go down in the history books for being the most expensive this far. Roughly 4 billion was spent. It may not last long. Political reports that groups linked to 15 of the top president ial contenders have raised 89 million, and spent 87 million as they look to 2016. Not a Single Person has declared their candidacy. Mary snow has more. Hillary clinton played a supporting role for a congressional candidates through the midterms. The prospects of a 2016 president ial bid was not far away. Are we ready for hillary. Behind the scenes a Different Campaign is under way, as outside groups backing 2016 contenders are raising catch. Ready for hillary, a super pact for group that can raise and spend inlimited money but not donate directly has raised 10. 3 million to date. Thats according to the Sunlight Foundation, which tracks money in politics, and counts this group as leading the pack. Among republicans it cites one Group Supporting rand call, Bradley Kennedy senator rand paul, kentucky senator. And one for paul ryan raised 2. 3 million. Ted cruz had millions raised and so, too, marco rubio. Thats some of the money with an eye towards 2016. It doesnt include candidates like chris christie, who has been visage on the campaign trail. But doesnt have a Political Action committee. Theres jed bush, widely seen having access to deeppocketed donors, and the money raised by the candidates themselves. All of it points to expectations of an unprecedented price tag for the presidency, beating the 2012 record set by president obama and mitt romney, who raiseded more than 1 billion to be a top tier candidate at the start, a former federal election commissioner estimates theyll need to raise between 100 and 150 million in the next year alone to be a contender and we could be looking at a six to 7 billion president ial election in 2016, by the time the money is counted up, according to bill alley son. Hes the director of the Sunlight Foundation, a group that monitors money in politics and advocates for greater transparency. I asked where all the money will come from. Its hard to track all the places its coming from, and all the things that people are interested in influencing. Having the disclosure, it gives you a shot, an opportunity to look into that and find out who is backing the member of the congression the president ial congress. I think that its not a perfect system, and obviously it would be better if we had limits that could clampdown on the intending. Transparency is the first step to understanding what the problem is. In fact, all the reporting on dark money indicates that we are not close to transparency. No, thats a problem. And, you know, with the nonprofit organizations that can raise no one nose how much money they have to spend, and they dont have to disclose they are donors. The problem is if you are running in a race, you are a member of congress, a president ial candidate. You are raising money and thinking a nonprofit could show up, dropping a million in advertising, sinking buy candidacy. I have to be prepared. Now you have members of Congress Spending time raising money, and are spending the time with the well off, the affluent, and as a result, ordinary voters are almost shut out of the process. Its almost a defensive move, that if you werent spending that money, its a distraction from the business of what voters need, and more into the business of running a campaign. Yes, exactly. I think that politicians, you know, they a lot of politicians complain about raising money, its something you have to be good at to be an elected official, its something they do themselves. Im not saying a politician is horrified to raise money, when they have to raise so much and devote so much time to it, and the super pacts and outside groups force them to devote more time than they were a few years ago, its changed how washington works. Do you draw a distinction between super pacts where you can trace where the money comes from, and the pools of nonprofit, dark money pools. I would not be surprised if a lot of the same donors show up in both place, but i think the dark money groups a problem is we dont know where the money is coming from. A thing that after Citizens United that people were worried about, were countries like chevron, exxon, atnt would have political operations, telling you to vote for this and that candidate they havent. They have reputational risks of alienating half of your customers by choosing a democrat or republican in a private company. They may be, and a lot have business before congress and the administration, they may be giving, through the dark money groups, and hiding what they are doing politically, but the real problem is you have organizations with nothing to do with the interests, attacking a candidate over voting with obama, 90 of the time, and the group paying for it is hoping for a tax break that the Treasury Department will give them. Theres no ability for the voter to beware by knowing that this big company they are paying for it, we know what their interests are. Bill alison is the editorial director at the Sunlight Foundation next, new yorkers have their noses in the air, and for good reason the air is worth a fortune. I explain when real money returns. We talk a lot about the un even recovery in america. To get a window on that, we dont need to go further than new yorks real estate. Recently it reached a new milestone. A park avenue skyscraper was the largest building in the western hemisphere, and in that building a penthouse sold for 95 million. If you find it hard to believe consider this the air and space between buildings is a valuable commodity. Mary snow explains. Reporter on an island home to 1. 6 million squeezed for space, and vying for a view, the only way to build is up. Demand is high, leaving developers jockeying for a slice of the skyline. The higher the building, the better the view. And the more money that can be fetched. Thats why they hire curt westergard. Launching a balloon moored to his truck, equipped with cameras and the f. A. A. s blessing, his job is to photograph the few from skyscrapers that have not been built. We are at 99, 99. 5. Mere inches can mean the difference of millions. Means you can advertise an apartment with views of times square and without. Its cool to find it out. Wi woe, you can see it. Oh, shoot, theres an airconditioner or a french fry exhaust fan in front of you as a Million Dollar view. You are giving developers what is invisible now. Exactly. Reporter the air itself is a hot commodity. Its the invisible air, the right to develop into it is transferred to a tangible asset. Reporter a tangible asset, but a complicated one. He worked on a deal with the Catholic High School sold air rights to a company for 13 million for a Company Building condominiums. The school will not build higher, in return upper level apartments will not have views obstructed. Some offered for 12 million. That difference, say, five storeys, or seven or eight storeys is air rights. The air rights or to a developed space have to comply with zoning laws. They are not new in new york city. They are more widely used as demand is strong with real estate prices soaring. The average price per square foot of manhattan property, by some estimates is roughly 800. For air rights, the average price per square foot is 361. A jump of 52 . Some appraisers say the air should be as valuable as the land. We have a development opportunity, we have people paying high prices for finished buildings that are unparalleled. You dont have that in any other market in the country. This market is entirely different. New yorks theatre district, for one, is cashing in. The Schubert Organization reportedly made 50 million since 2008, by selling its air rites. The appetite for air is an appealing side dish for a new york institution, famous for the past ramie since 1998 the jake is the Third Generation owner, doing something generations before him couldnt do. The neighbourhood was not valued in the same way it is now. With construction booming, the air presented an opportunity. Dell sold air rights. It means the deli stays put. Dell cant build any higher than the one story the family owns. He Wont Disclose the amount, but its enough to keep his business growing for years to come. Were you shocked. Short answer, yes. Reporter disbelief, yes. But dell said it was time to strike. Air right deals are the tame. Its a lesser wild west frontier that exists in business. When that soaring cost for undeveloped air comes back to earth is anyones guess. Once an air rights sale deal is inked it holds forever unless the buyer of the air rights sells them back or to a property next door. Its hard to get your head around putting a price on air. Real estate prices have been soaring and for anyone not rich, its harder to live and work in new york city. Ask nicky perry. She owns two restaurants, tea and sympathy and assault and battery. And the site of a skyscraper she finds disgusting. We are talking about air. We have half our stores empty because the rent is so high. Its disruptive to the city. Because we have all this empty space, its no taxes, jobs, sales tax being made, and nobody can afford to open stores any more. Tell me the line you draw between rising real estate prices in new york, and the rents that you pay . The line i draw there is no line. There are no lines, the lines have been completely redrawn, i suppose, but its insane. The rents have gone from 5,000 to 75,000 a month. Is that real. People whose rents have down that. There are streets where we are, near me, where they are harder. You are in the west village. They are paying 150,000 for 1,000 square feet to be a billboard. All the people that came with a good idea and 100, its gone. No young people can come, because nobody can afford to live in a studio, because they are not 400 a month any more. What we are losing is we are losing all the people that had 1, a dream and a bravado that would come to new york, get a job waiting tables, dreaming the dream, and you know. You cant do it. Its over, dead, gone. You run businesses, restaurants, you dont want to move around. You want your restaurants in the same place. What does a lease look like. You set a lease for a set amount of time. What is happening when the leases come up for renewal. Thats it, bye, bye, i want 50,000. Im lucky that im doing something no one else is doing in the city. My landlord, one in particular has been very good with me and works with me. Ive been in negotiation with the other for months, and ive been shaking like a leaf because they could just pull the rug out from underneath you. What if they make the argument that someone will pay this rent, there is demand. I understand that. But we are destroying the fabric of what we have and where we are living, and what we are doing by pricing everyone out of the market. Eventually theres going be we cant live in a city thats fall of banks and nothing else. You are a dreamer, and an entrepreneur, and someone that came to this city. All things that a city like new york needs. At some point it sounds like enough can happen that it can drive you or others out. It is. People are leaving in their drones. We have kids leaving the schools. The personalities cant afford to live here. These are successful people. Clearly people are moving into every home. We are getting richer. We are getting richer. Houses that were 150,000 to buy are now 10 million, 5 million. I saw your face, when snow your said the penthouse is 95 million. Where will it go. Its a good question. Thank you for being with us, a Small Business owner. She also is a bit of a force to be reckoned with in the community and known as a bit of an activist, and not taking of the own of tea and sympathy and assault and battery, but a Small Business owner in new york. Thats our show. Real money airs weekdays. 7 00p. M. Eastern, 4 00p. M. Pacific. Im ali velshi, thank you for joining us. [ music ]