The Political Implications of America’s Oil & Gas Boom
At OilPrice.com, James Stafford interviews James Kwak, associate professor at the University of Connecticut School of Law and blogs at The Baseline Scenario, which he co-founded with Simon Johnson
Oilprice.com: What are your thoughts on America’s oil and gas boom?
James Kwak: There are some obvious benefits. Lower dependence on politically unstable parts of the world is clearly good. Shifting electricity production from coal to natural gas is also good. One can also come up with a plausible scenario in which plentiful natural gas buys us the time necessary to shift toward greater usage of renewable energy sources.
On the downside, I worry about the political implications of the boom. Increased domestic production will encourage politicians to declare victory on the energy front without doing anything about the big, long-term problem: climate change. Before, fears of rising energy prices and dependence on the Middle East were encouraging political investment in renewables and conservation. Now the message from ExxonMobil and its allies will be that we don’t need to do anything because we are a (net) energy exporter and energy is cheap. That will further reduce the chances that we do anything meaningful about climate change.
Oilprice.com: What do you see happening to the US and global economies in 2013?
James Kwak: I’m modestly positive about the U.S., but that’s not because of any particular insight. It’s because I read Calculated Risk, and because the housing market is turning around.
Go read the whole thing.
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