Publications: Notes at the Margin

The Short, Steep Road to $30 per Barrel; Environmental Inflation (July 27, 2015)


This week we focus on two issues. First, we argue that crude prices could fall fifty percent. We put the word “could” in italics and bold. A fifty-percent price decline is not likely. Still, Dated Brent could drop fifty percent to $30 per barrel if history repeats. As of this writing, history is on course to reoccur or even do itself one better.


Second, we discuss “environmental inflation.” Over the past decade, environmental regulators managed to raise crude prices from $70 to $150 per barrel, costing world consumers over $1 trillion. More recently, these officials have successfully imposed a $1.50 per gallon “environmental tax” on California consumers. The cost of environmental regulations is rising and the macroeconomic consequences threaten to become substantial.


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