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August 31, 2005
Coping with the gasoline shortfall
Today's announcements by the Department of Energy on the use of the Strategic Petroleum Reserve and by the Environmental Protection Agency on fuel standards are steps in the right direction. But we should be clear about the magnitude of the challenges ahead.
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Posted by James Hamilton at 03:51 PM permalink | Comments (26)
August 30, 2005
Katrina: Day 2
A sobering day today, as we learned that New Orleans and much of the coast had not been spared after all. The waters swept away what many generations had built, and the task of trying to put it back together seems increasingly daunting.
Others are in a better position than I to communicate progress and needs of the relief effort. For those interested in what the economic implications of all this might prove to be, I offer these thoughts.
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Posted by James Hamilton at 10:16 PM permalink | Comments (37)
August 29, 2005
Impact of Katrina
Hurricane Katrina could have a much bigger effect on the price of gasoline and natural gas than on the price of crude oil. Here's why.
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Posted by James Hamilton at 09:22 PM permalink | Comments (26)
August 28, 2005
Supply factors in the 2005 oil price surge
World oil production increased 4.2% during 2004, leading many analysts to conclude that demand increases, not supply disruptions, were the story behind last year's rise in oil prices. As data for 2005 become available, I'm forced to conclude that the reason that oil prices have continued to surge above their values from 2004 is not further increases in demand, but rather concerns about the ability of supply to increase significantly above the 2004 levels.
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Posted by James Hamilton at 01:54 PM permalink | Comments (34)
August 26, 2005
Petroleum 101
If any of you ever had thoughts of drilling to see if you could find some oil, the Oil Drum has been running an excellent series on exactly how the physical process of drilling for oil works. Here are links to what's been discussed so far.
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Posted by James Hamilton at 06:49 PM permalink | Comments (3)
August 25, 2005
Recession in 2006-07?
If you just extrapolate the dynamics of past economic expansions, you'd say that a recession within the next few years is quite possible but by no means certain. The question is how much weight you want to attach to some of the other factors.
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Posted by James Hamilton at 08:46 PM permalink | Comments (21)
August 23, 2005
The PR of PO
Sometimes discussions on both sides of the issue of PO (peak oil) look more like a PR (public relations) campaign than an open exchange of ideas.
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Posted by James Hamilton at 09:16 PM permalink | Comments (94)
August 22, 2005
Murky future for Merck
So what's the big deal? We'll just get some other company to take its place in the Dow Jones Industrial Average.
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Posted by James Hamilton at 11:06 PM permalink | Comments (31)
August 21, 2005
Sweet and sour crude
Differences across grades of crude oil can tell us a lot about why oil prices have become so high.
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Posted by James Hamilton at 02:14 PM permalink | Comments (60)
August 19, 2005
Measuring inflation
It's easy enough to define inflation as a decline in the purchasing power of a dollar. But the power of a dollar to purchase-- exactly what? The devil is in the details.
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Posted by James Hamilton at 08:49 PM permalink | Comments (16)
August 17, 2005
Talk of recession
Nine out of the ten recessions in the United States since World War II were preceded by a spike in oil prices. Nevertheless, for the past year, I've been telling people that this time it's going to be different-- the economy could weather the rising price of oil without a downturn. Developments of the last couple of weeks make me a little more concerned.
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Posted by James Hamilton at 07:15 PM permalink | Comments (81)
August 15, 2005
More to the story on Chinese oil demand
As more facts come out about Chinese oil demand, the more fascinating the picture becomes.
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Posted by James Hamilton at 05:44 PM permalink | Comments (34)
August 14, 2005
Some comments on the Cambridge Energy analysis of future oil supplies
Most pundits had one of two reactions to the recent analysis by Cambridge Energy Research Associates about the prospects for global oil supplies over the next five to fifteen years. Some analysts took the CERA report as confirmation that concerns about peaking world oil production have been misplaced. Others dismissed the CERA findings as completely without merit. I would urge anyone who had either of these two reactions to take a second look at some of the issues.
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Posted by James Hamilton at 05:22 PM permalink | Comments (38)
August 13, 2005
Investigating charges of Medi-Cal fraud
There are some obvious steps we could take to make sure that state and federal contributions for medical assistance are spent as effectively as possible.
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Posted by James Hamilton at 04:00 PM permalink | Comments (7)
August 12, 2005
The under-reported good news about productivity
If you focus too much on the latest statistics and speculation about what could go wrong, it's easy to lose sight of some very important long-term trends. The solid growth of U.S. productivity is one piece of very good news that's not getting sufficient attention.
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Posted by James Hamilton at 06:26 PM permalink | Comments (26)
August 10, 2005
Record auto sales for July
U.S. light-vehicle sales for July were the highest of any month in history.
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Posted by James Hamilton at 08:34 PM permalink | Comments (43)
August 09, 2005
Limitations of the Hirsch report on peak oil
Here's a prime example of what I complain about in some of the discussions about how to deal with peak oil.
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Posted by James Hamilton at 08:50 PM permalink | Comments (276)
August 08, 2005
Is there a danger that the Fed will fall behind the inflation curve?
Both Macroblog and Capital Spectator raise the prospect today that rising long-term yields might mean that the Fed waited too long before trying to stamp out the cinders of an incipient inflation fire. I would suggest instead that the increase in long-term yields over the last few months is the natural development that we expect to see in a situation of Fed tightening and has little to do with inflationary expectations.
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Posted by James Hamilton at 10:22 PM permalink | Comments (17)
August 07, 2005
Peak oil for skeptical economists
I earlier attempted to explain some basic economic perspectives on oil depletion to those who usually think about the issue from the vantage point of other disciplines. Now I'd like to attempt the no less perilous task of carrying water the other way across the street, describing to economists who may find themselves skeptical of the claims made about "peak oil" what I regard to be some useful insights from geologists and engineers to which some of us have perhaps paid insufficient attention. As a skeptic and an economist myself, perhaps I'm qualified for that mission.
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Posted by James Hamilton at 04:14 PM permalink | Comments (69)
August 06, 2005
Update on Kelo in California
New developments on the implications of the Supreme Court's Kelo decision for California.
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Posted by James Hamilton at 01:26 PM permalink | Comments (2)
August 04, 2005
When should we worry about the yield curve?
The slope of the yield curve is likely to become an increasingly bearish indicator as this year progresses, and recent changes in the calculation of the index of leading economic indicators should not be interpreted as in any way denying that fact.
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Posted by James Hamilton at 03:31 PM permalink | Comments (35)
August 02, 2005
New highs for oil
Why did oil prices make new highs this week?
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Posted by James Hamilton at 10:25 PM permalink | Comments (24)
Wall Street Journal discussion of peak oil
The Wall Street Journal Online today features a discussion I had about peak oil with Robert Kaufmann, professor of geography at Boston University. Here are some excerpts.
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Posted by James Hamilton at 03:58 PM permalink | Comments (34)
August 01, 2005
Further thoughts about the latest economic statistics
I've had a little more time to ponder the meaning of some of the economic data released last week, and here's what I've come up with.
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Posted by James Hamilton at 04:07 PM permalink | Comments (10)