Energy is required to power virtually all economic activity, with oil and gas integrated into the production, distribution, and consumption of almost every good and service. Our research examines how energy markets function and how policy can ensure stable, affordable supplies while supporting the transition to cleaner sources. When Russia's invasion of Ukraine threatened global energy prices, we developed innovative policy solutions using the Strategic Petroleum Reserve to stabilize markets without sacrificing domestic production capacity. By addressing the actual constraints to investment in domestic energy—primarily price volatility risk—our approach demonstrates how targeted interventions can simultaneously address price pressures, energy security, and employment in this crucial sector.
Expanding Energy Production
Read the Latest
Read the Latest
The long-term goal of energy policy should encompass more than just security and decarbonization: the goal should be to ensure energy capacity abundance and stable energy cost.
The White House should not use the refining capacity crunch as a reason to avoid grappling with the fragile state of crude oil supply, as it appears to be doing. In gasoline and other refined products, there are two related but separable sources of scarcity: crude oil and refining capacity.
The Department of Treasury should be making use of the Exchange Stabilization Fund (ESF) to target accelerated supply-side responses and insure critical producers against downside risks.
Given the discretion afforded the Secretary in utilizing the ESF, and the strong correlation between commodity price volatility and exchange rate volatility, the Secretary has the authority to establish a Supply Insurance and Acceleration Program for key commodities.
Creative production contracts involving the sale of put options (as we previously advocated for), could help set a soft “floor” on oil prices, preventing a large-scale return to consumer purchases of gas-guzzling cars.
Since financial markets are complex and energy policy can be shrouded in legalese, it is worth taking a minute to translate some of the more abstruse language in the DOE’s announcement.
This is meant to be a quick "micropost" and may be light on linking & original charts I was recently quoted saying that oil prices surging past $150 was "not implausible" in 2022. The reasons for my concern remains, but through delivering greater demand certainty and
The recently-announced SPR release is the first step in a broader program to address oil price volatility in today's geopolitical environment.
Energy security has taken on new importance in wake of Russia’s invasion of Ukraine. We can use existing tools to confront these challenges without sacrificing our climate goals.
