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Energy, Security, and Climate

CFR experts examine the science and foreign policy surrounding climate change, energy, and nuclear security.

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Energy, Industry, and the Countryside

by Michael Levi

I’ve argued frequently that shale gas and tight oil development can be done safely, given the right practices and the right rules to ensure that those are followed. Over the past month, as I’ve traveled and talked to people about The Power Surge, I’ve heard one powerful countervailing sentiment several times: Even if fracking is done right, aren’t we talking about the industrialization of the countryside? And is that really something we should accept? Read more »

Is China the Real Winner from Iraq’s Oil Boom?

by Michael Levi

Iraqi oil production has boomed in recent years, and Chinese companies have been deeply involved in producing and buying the oil. That prompted headline writers to go with this for a New York Times story on Sunday: “China Is Reaping Biggest Benefits of Iraq Oil Boom”. There’s a lot of good stuff in the article, but the headline rests on a wrongheaded view of how oil trade is intertwined with countries’ economic fortunes. Indeed one could easily argue that the United States, not China, has been the biggest winner (aside from Iraq) from the surge in Iraqi supplies. Read more »

Is OPEC a Paper Tiger? A New Study Says Yes

by Michael Levi

We all know that OPEC colludes to keep oil off the market and prices high. Or do we? There is actually remarkably little agreement on whether OPEC is any good at what it aspires to do. Does membership in OPEC really make countries more likely to constrain their oil output? It’s a question with wide-ranging consequences for everything from the economy to security to climate change. Read more »

The End of Energy as We Know It… In Three Graphs

by Blake Clayton

Want to understand the energy challenges the world might face in the future? There are few better places to turn than this year’s BP Energy Outlook to 2030, an annual publication that shows the company’s projections for energy supply and demand over the next two decades. The three graphs below highlight some of the trends likely to define the energy landscape in the years ahead, in BP’s view. Read more »

Bad News for Pessimists Everywhere: Malthus Was Wrong

by Blake Clayton

There is a tempting intuition to the idea that the real prices of non-renewable goods like coal, iron ore, or oil should rise, more or less, forever. It’s an easy argument to make, and it sounds right: The world’s population is getting bigger and bigger, so more and more goods like metals and hydrocarbons are being consumed. Every year, the sum total of what we’ve taken out of the ground mounts, never to be replaced. Supply of the stuff is limited—once it’s gone, it’s gone. So, this argument goes, as we exhaust our resources, we’ll have to mine, drill, or otherwise get our hands on it somehow but it will get more and more expensive to do so, because we’ll have exhausted the best stuff. Left to exploit ever-greater quantities of ever-more-marginal deposits, prices will rise indefinitely into the future. Read more »

Could the North American Shale Boom Happen Elsewhere?

by Blake Clayton

The dramatic takeoff in oil and gas production in the United States and Canada over the last half decade has left many people asking whether a similar boom will happen in other countries. It’s a good question. To answer it, you have to start by identifying what critical factors enabled the boom to happen here, then figure out whether these same enabling factors exist elsewhere. Read more »

The Shale Boom Won’t Be Repeated on Federal Lands

by Michael Levi
Gray wolves are seen nearing a Bison in Yellowstone National Park in this undated handout photograph released on February 21, 2008. Gray wolves are seen nearing a Bison in Yellowstone National Park in this undated handout photograph released on February 21, 2008 (Ho New/Courtesy Reuters).

A visit to Yellowstone National Park last week has me thinking about federal lands. In the fight over whether the U.S. oil and gas boom is happening because of or despite President Obama’s policies, perhaps the most commonly heard fact is this: oil production is surging on non-federal lands but is down on lands controlled by Washington. This observation, many claim, shows that oil and gas production is up despite U.S. policy to thwart it – and a policy reversal would send oil and gas output far higher. Read more »

Asking the Right Questions About Changes in Derivative Markets

by Blake Clayton

As part of a book I’m working on, I’ve spent some time wading through the econometric literature on speculation in commodity markets, oil in particular. This body of research tries to shed light on how the inflow of investor money into commodity derivatives over the last decade has affected these markets. I’m skeptical of a lot of what’s out there on this topic, though there is also some excellent work, too, like from Bassam Fattouh at the Oxford Institute for Energy Studies. Read more »