The Political Implications of America’s Oil & Gas Boom

At, 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 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. 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.


3 Responses to “The Political Implications of America’s Oil & Gas Boom”

  1. jlh Says:

    “do anything meaningful about climate change”

    Like debunk it?

  2. Fausta Says:

    That’d be a good start, wouldn’t it, jlh!

  3. MissJean Says:

    I would think it would be a great benefit because it would decrease the number of tankers traveling from the ME to American refineries – do you know how much fuel those use? :)

    BTW whenever people comment about their concern for the medioambiente, I always point out that they can personally lower the use of fossil fuels by lowering the use of electricity. They just need to pledge to get rid of their personal devices that use electricity. It’s astonishing how quickly they lose concern for the environment when they consider having no cellular, no PC or TV monitors, no Wii, no Internet, no electric shavers! (In northern states, also suggest no snowblowers or forced-heat furnaces with electric fans. In southern states, no air-conditioning.)