Common Tragedies

Thoughts on Environmental Economics

Chain reaction

Posted by Daniel Hall on August 6, 2008

1. Someone asks a question.

2. Tyler Cowen offers a response that is correct but that doesn’t seem to (directly) address the question.

3. Lynne Kiesling offers a response that (probably) addresses the question but doesn’t seem to be correct.

4. I offer up my answer to the question (or here), relying mostly on Geoff Styles.

2 Responses to “Chain reaction”

  1. Lynne said

    Yep. As I explained in a comment on my own post, I was speaking in more generalities about the effects of the refining bottleneck on prices over the past several years, not on the specifics of refining margins in the past year. I think your analysis for the past year is correct.

    BTW, do you know of anyone who has done a good analysis/decomposition of the effects of the low-sulfur fuel requirements that have gone into effect, following EPAct 2005? I think they went into effect in 2007 or 2008, but I haven’t been following them.

  2. Daniel Hall said

    Lynne, unfortunately I don’t. I think it’s an interesting question, though. I should mention it to a couple people here and see if they’re interested in looking at it. 😉

    I think the switch to low-sulfur diesel is one of those “under-the-radar” stories that could have big impacts in years ahead… it would really be big news if a significant portion of the U.S. auto fleet was diesel (or diesel hybrid) in the next 10 years. And if that happened you’d have to think this switch was a big part of it.

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