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Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
Ellig Gasoline And Natural Gas January 2005
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Ellig Gasoline And Natural Gas January 2005

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Transcript

  • 1. Gasoline and Natural Gas Prices: What’s Up?
    • Jerry Ellig
    • Senior Research Fellow
  • 2. ’70s cultural commentary…
    • If they don’t lower the gas, we’re gonna lower the boom
    • Stop shippin’ all that wheat and corn, forget the Golden Rule
    • And if they still wanna play rough, we’re show ‘em that we’re tough:
    • Cheaper crude, or no more food!
    • -- Brent Burns, 1979
    • Are we rollin' downhill like a snowball headed for hell? With no kind of chance for the flag or the liberty bell? I wish a Ford or a Chevy would still last ten years like they should.
    • Is the best of the free life behind us now and are the good times really over for good?
    • -- Merle Haggard, 1981
  • 3. Natural gas chronology
    • 1954 Phillips decision - wellhead price controls on interstate gas
    • 1960s: Interstate reserves shrink
    • 1970s: Widespread shortages in consuming states
    • 1978: Natural Gas Policy Act allows phased decontrol of “new” gas, completed in 1985
    • 1980s: FERC reforms interstate transportation
    • 1992: Old gas prices decontrolled
  • 4. Is gas expensive?
  • 5. Is gas affordable?
  • 6.  
  • 7. Oil chronology
    • 1971: Nixon wage and price controls
    • 1973: Oil and gasoline price controls
    • 1970s: Shortages and gas lines
    • 1981: Executive Order decontrols oil and gas prices
  • 8. Is gasoline expensive?
  • 9. A historical perspective
  • 10. Is gasoline affordable?
  • 11.  
  • 12. Why?
    • Crude oil prices?
    • U.S. monetary policy?
    • Cost of reformulated gasoline?
    • Diminished competition?
  • 13. Gasoline tracks crude prices
  • 14. Gasoline and crude since 2001
  • 15. How high are world oil prices?
  • 16.  
  • 17. Consequences
    • Recession?
    • Inflation?
    • Economic dependence?
    • Political vulnerability?
  • 18. How big are imports?
  • 19.  
  • 20.  
  • 21. Free with your fill-up…
    • Flexible energy prices convey information about underlying scarcity and demand
    • Deregulated prices create winners and losers but minimize disruptions
    • Recent price increases are much less severe when adjusted for inflation
    • Principal factors explaining price increases are increased crude oil and wellhead gas prices
    • Crude oil is an international market
    • Energy prices unlikely to cause economywide calamity
  • 22. For more information…
    • Energy Information Administration
    • www.eia.doe.gov
    • Recent hearing testimony
    • http://reform.house.gov/EPNRRA/Hearings/EventSingle.aspx?EventID=1161
    • GAO/FTC on competition
    • GAO: http://www.gao.gov/new.items/d04951t.pdf
    • FTC: http://www.ftc.gov/opa/2004/05/gaostatement.htm

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