Publications: Notes at the Margin

Impact of the Virus; Consequences of the US Election (November 9, 2020)


This Notes at the Margin covers two issues: the coronavirus’s oil market consequences and the impossibility of predicting how the Biden administration will affect the energy sector. First, we note that the surge in Covid?19 infections will suppress petroleum consumption. No amount of whining, no effort to keep businesses open, no attempts to ignore the disease will salvage economic activity or boost oil consumption. Recovery requires containment of the illness. Taiwan, China, and New Zealand have shown how it can be done. The United States and Western Europe, in contrast, have failed miserably in this respect. As a result, oil use will be stifled for the next six to eight months.


The second section of this report discusses how impossible it is to foresee the Biden presidency’s impact on the energy market or oil. We illustrate this by reviewing history from 1964. The past reveals that events, not promises or plans, have dictated presidential actions on energy. One example stands out. Richard Nixon was known to be a stalwart friend to business and industry. Then the horrific Santa Barbara oil spill occurred nine days after he became president. Within two years, he had created a new organization by executive order. Its name? The Environmental Protection Agency, or EPA.


The chronicle presented here is particularly relevant for those who write on US energy policy from abroad, especially London. Some writers there quite naturally have little familiarity with the whys and wherefores of US energy policy over the years.


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