Publications: Notes at the Margin

Economic Threat of Energy Crises: Neutralized (March 6, 2023)

 

Energy market disruptions have spurred a cottage industry in economics. Academics have written working papers in the thousands on the subject. More than one thousand have been published. At least one hundred young economists have earned tenure from writing on such disruptions. It would take a lifetime to read all these studies today.

 

Such efforts have contributed immensely to the world’s understanding of oil and energy’s role in the global economy. We are observing the greatest contributions to that understanding today because the energy crisis of 2022, clearly the worst market upheaval since World War II, did not cause a recession. Simply put,

 

the oil weapon had been neutralized.

 

This neutralization has huge implications. Based on developments since 1973 and especially since 2010, it is now clear that society can accelerate its move away from fossil fuels without suffering recession or depression. We can also now ignore the warning rants of oil company executives, oil-exporting nation ministers, and proponents of other fossil fuels, as well as analysts and reporters, regarding the inadequate investment in hydrocarbons. The insistent calls for more money for oil reserve development, which will no doubt also be coming from the just-begun CERAWeek in Houston, are pleas from a dying industry desperate for the deference and freedom to spend it once enjoyed.

 

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