Experts urge US policymakers to address long-term challenges

WASHINGTON, DC — Energy policymakers should not waste the opportunity that lower oil prices provide to address US supply concerns, two experts told the congressional Joint Economic Committee on May 20.

“The recent rise in oil prices again underscores the present reality of long-term challenges. Even if we see significant short-term gains in global oil production capabilities, if demand from China and elsewhere returns to its previous rate of growth, it will not be too long before the same calculus that produced the oil price spike of 2007-08 will be back to haunt us again,” warned James D. Hamilton, an economics professor at the University of California at San Diego.

“Once global economic growth resumes, so will growth in oil demand. That will once again put energy security, and the relation of energy to economic well-being, back at the top of the agenda. Given the lead times to develop new supplies, policy decisions made today should take into account the likelihood of future cycles, and what they mean to the American economy and to American consumers,” added Daniel Yergin, chairman of IHS Cambridge Energy Research Associates.

The two experts returned to testify amid dramatically different conditions from their last appearance, observed Rep. Carolyn B. Maloney (D-NY) who chairs the joint House-Senate committee. “The most recent estimate from the Energy Information Administration is that regular gasoline prices will average $2.21/gal over this summer’s driving season and that diesel fuel prices will be $2.23/gal. That’s a far cry from the $4 or more a gallon for gasoline and diesel that drivers faced last summer,” she said in her opening statement.

Oil and Gas Journal