Common Tragedies

Thoughts on Environmental Economics

John Whitehead on the SPR

Posted by Evan Herrnstadt on March 24, 2008

Responding to a claim by Congressional Democrats that (edit, left for posterity), John Whitehead over at EnvEcon thinks about the impact of the SPR fill and does a quick-and-dirty estimate of the drop in gas prices that would accompany a suspension of current policy. Key result:

Given the short run elasticity of .10, U.S. gas/oil consumption would need to fall by almost half to nudge gas prices down by $0.16/gallon.

In extremely vain fashion, here is a link to a very qualitative SPR post I wrote recently. John’s numbers back up my half-assed informal analysis and provide better context for scrutinizing simplistic anti-SPR arguments. As the GAO and I have pointed out, there are different reasons for re-examining current SPR fill policy that might hold more water (and less sweet crude).

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3 Responses to “John Whitehead on the SPR”

  1. John Whitehead said

    Evan,

    Congressional Democrats are claiming “that John Whitehead over at EnvEcon thinks”? How dare they!

    ;->

  2. Colin said

    Hey, one of the guys in my research group is writing a thesis on the SPR and recently published an op-ed in Geotimes (http://www.geotimes.org/mar08/article.html?id=scene.html) about it. The significant problem he’s been investigating is whether the SPR geological formations can withstand filling and emptying cycles. He’s thinking we could empty and fill the salt domes like 5 times (don’t quote me on that though)

  3. Evan Herrnstadt said

    John,

    You never know what crazy theory these politicians will come up with next… :)

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