Common Tragedies

Thoughts on Environmental Economics

Oh dear

Posted by Evan Herrnstadt on August 8, 2008

From Krugman in the Times:

According to one recent poll, 69 percent of Americans now favor expanded offshore drilling — and 51 percent of them believe that removing restrictions on drilling would reduce gas prices within a year.

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6 Responses to “Oh dear”

  1. dWj said

    Huh. I suppose it would reduce the incentive for holding private stockpiles; if you were going to believe it would have a large effect on prices in ten years, it would seem reasonable to think that the ~60 days of current US consumption being held in private stockpiles would increase world supply by, let’s see, 60 days/10 years * 25% of world oil usage = 1/240. So if there were an infinite amount of cheap oil under the ocean, you could increase supply by 0.4% fairly quickly.

    Of course, more drilling in the U.S. won’t have that big an impact on world oil prices even when it comes on line, nor will conservation, though that has the benefit of coming on line more quickly. Both are simply small relative to the world market. No politician will admit, though, because so few voters want to hear, that we’re simply part of a global market here, and nothing the U.S. government does is going to have a significant effect on world oil prices. So everyone is left pretending that their feckless policy is the one that would work.

  2. Charlie said

    Krugman’s piece is really good–beyond just this comment.

    I understand how the republican strategy he describes is effective. What I find hard to grasp is the motivation of the people pursuing that strategy. I guess the motivation is not to try to enact policies they believe in, but just raw power, and the ability to slip in stuff that benefits themselves and their friends directly.

  3. Dave M said

    Maybe this has something to do with it…

  4. Ekonomix said

    It is not about when and how much you can supply. It is about people’s expectations. If we decide to drill offshore, this will also signal that we will whatever we can to reduce oil demand and increase supply. Hence lower prices!!!

    Ekonomix
    http://turkeconomy.blogspot.com/

  5. Just for comparison, I wonder how many people think higher CAFE levels would reduce gasoline consumption within a year.

  6. sandrar said

    Hi! I was surfing and found your blog post… nice! I love your blog. :) Cheers! Sandra. R.

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