Oil Demand

Oil and the Economy: The Impact of Rising Global Demand on the U.S. Recovery

On May 20th 2009, the Joint Economic Committee of the U.S. Congress held a sparsely-attended hearing on the implications of rising world oil demand for the U.S. economy. JEC chair Representative Carolyn Maloney (D) delivered an opening statement, James D Hamilton, economics professor at UCSD and founder of Econbrowser spoke, followed by Daniel Yergin, author of The Prize and Co-Founder and Chairman of Cambridge Energy Research Associates.

The initial statements weren’t that interesting. Hamilton cautioned that demand could well drive up prices again, while Yergin advised that our strategic future lies with Canada’s “oil sands.” But they seemed to agree on a lot more than they did before the economy tanked.

During question and answers, both committee members and speakers recognized that securing our “energy independence” now involves procuring energy from a variety of sources. Yergin proposed nuclear plants to provide the heat necessary to cook the bitumen in “oil sands” into synthetic oil. No one dismissed nuclear although Hamilton at least mentioned the risks.

The discussion of “hedging” vs “speculating” near the hour mark is worth following.

TPM