Ecomentary.com provides this archive of postings dating from 2011 dating back to 2001, as a resource. Due to the nature of dated material on the internet, we do not guarantee that hyperlinks are current.

December 08, 2008

Politically Correct Energy Strategy: another policy mistake in the making? In November, when the price of crude oil on the January futures market dipped below $50/bbl, it occurred to me to advocate a change in our national energy policy once again. This time, more particularly, a tax policy as it applies to crude oil and petroleum products. My bottom line was to get the government to be after January 20, 2009 to use its rhetoric creatively and begin a national security tax on petroleum products. As Rogers and Hammerstein put it, I must be a “cockeyed optimist.” more…

November 30, 2008

Time to Change Our Oil Policy After what seemed a never ending period of rising oil prices, the oil bubble has burst and gasoline is again below $2.00 per gallon. During the rise, many forgot that oil prices can also fall. Recent reports of OPEC disarray and fears of inadequate revenues from oil exports show that oil price variability is a two edged sword. Price changes affect the behavior of both parties to the oil trade, and intelligent policy making makes this variability the cornerstone of good policy changes. The first item on the policy agenda should be to keep the price of oil (products) high to the users of oil products! This can be done through the use of a time-varying oil use tax that rises when the crude oil price falls and reverses when the crude oil price rises. more…

January 25, 2007

Will Colonel Jessup Please Stand Up? A year after resolving to reduce American dependence on oil, what has really changed. The SOTU message delivered this week provides further evidence that American politicians —of all stripes—are unwilling to tell the truth to the American voter. “No pain, no gain” is where it must begin. Without attacking the demand side of the equation, our dependence on foreign crude oil will continue to grow, in spite of the evidence that rising prices over the last two years have begun to make a dent in the growth of consumption. What is the problem? Simply put, “you can’t handle the truth,” as Colonel Jessup once said. more…

June 26, 2006

Geopolitics of Energy and Asia Presentation to the Conference on Energy Inseurity: Fuel for Conflict, Haverford College, April 1, 2006 more…

March 22, 2006

Energy Independence Is Not Energy Security Energy policy in the U.S. has been both partisan and a largely futile effort to pander to various political interests. Frequently, policies for energy security get commingled (wrongly in our view) with calls for energy independence,a goal that is beyond our reach. It is time for leadership on energy issues on a non-partisan basis, and a good beginning would be to drop the call for energy independence. The goal that is truly important is to improve our energy security. (This piece is also being published by the FPRI and will be available at www.fpri.org). more…

January 26, 2006

Crude Oil Bubble Popping? Among the many bubbles allegedly created by aggressive monetary policy, oil got a lot of attention. However, contango and warm weather have led to a massive inventory build. That suggests that crude oil in the short run might be vulnerable to a correction. Further, financial interests might not be willing to take the implied losses from their commodity positions. An interesting test may be coming in which the old maxim that markets behave so as to inflict the maximum pain on the most individuals may get tested. more…

September 14, 2005

Postscript from Katrina and Rita “The End of Cheap Oil, Once Again” was written before the terrible twin hurricanes devastated the Gulf Coast. Because of the extent of the damage to crude oil and natural gas production as well as to the refining and storage facilities, some reflection was in order on our conclusions. Suprisingly, the damage only underscores the primacy of economics as the driver for the current price shocks, while at the same time highlights how the American energy economy has become increasingly vulnerable due to inadequate capacity–capacity to produce and the capacity to refine. The irony is that even the substantial amount of investment that seems to be taking place in the world energy system will still leave those vulnerabilities for many years to come more…

August 28, 2005

The End of Cheap Oil, Once Again Over the past two year the escalation of crude oil and petroleum product prices have soared, undermining conventional notions of a “normal” oil price. Does this change augur a new price paradigm? What underlies the change? What policies are now appropriate for “energy security?” more…

April 26, 2005

Growth, Geopolitics and Oil Presentation made for Cosmos Club, Philadelphia, April 26 2005 more…

October 16, 2004

STAGFLATION ON THE HORIZON? The rapid rise in oil prices and the continued degree of current monetary ease has suggested to some analysts a striking parallel to the Stagflation of the 1970’s. We think that focusing on the differences between now and then will lead to more productive insights. Our view was published by the Financial Times on October 15th. more…

February 07, 2003

Gasoline or Crude Prices: What is the Problem? The spike in crude prices has created a deep worry for the economy. Is this Oil Shock going to tip the economy into recession? Crude prices are high but the real issue will be how high will product prices such as gasoline get and how long will they stay elevated more…

November 16, 2001

CPI Changes are an Energy Story–more good news coming? The collapse in oil prices dominated the CPI data released today. Energy prices fell 6.3% for the month or at an annual rate of 54.6%! It should only happen (provided you don’t own oil stocks)! A further reduction in crude and product prices to the levels of late 1998 or early 1999 would create a huge transfer of income from oil producers to oil consumers. If crude prices fall that far, it is the equivalent of a 75 billion dollar tax cut with no wrangling in the Congress! more…

November 14, 2001

Six weeks after the U.S. began its mission in Afghanistan, the anti-Terrorist alliance has caused the Taliband to lose effective political control over much of the country. The success so far rests on an unprecedented cooperation of the United States and Russia. In turn, continued cooperation of the two former antagonists hints at transforming both geopolitics and the world’s oil economy. At a time of increasing gloom over prospects for the global economy, world equity markets were pleased. more…