Naomi on the energy list sent a link to the following npr podcast about the low oil prices:
https://thedianerehmshow.org/shows/2015-12-22/economic-and-geopolitical-implications-of-the-global-oil-surplus This is a very mainstream analysis which omits important aspects. They only look at the short term, and they do as if the oil market was only driven by economic laws, not by politics and power or longer term considerations. Luckily, the relevant questions which were avoided by the invited discussants (for instance the greenhouse gas implications of the low oil prices) were then raised by the people calling in afterwards. I think the low oil prices can best be explained by Hans Werner Sinn's theory of the "green paradox": since the opec nations have to expect that their oil reserves will lose value in the future, due to taxes or other restrictions on oil usage, it is rational for them to increase the rate at which they extract them now (rational in the sense of maximizing the present discounted value of their expected income stream). One of the telephone callers kind of said this, but I don't think Diane Rehm understood him. Here is a reference where Sinn himself says that this year's low oil prices are confirmation of his theory. http://ssrn.com/abstract=2621998 Sinn is a conservative economist, but I think this analysis is correct. Hans G Ehrbar _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
