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The current drop in prices seems to mostly be a price war between the Saudis and new producers in the US. It's probably not sustainable long term. But, if incr
by bkjelden 11y ago
The current drop in prices seems to mostly be a price war between the Saudis and new producers in the US. It's probably not sustainable long term.
But, if increased crude production in the US has lowered the long-term equilibrium price, the US could increase fuel taxes to discourage increased consumption.
The only downside to this is that it'd be a very regressive tax increase.
- crdoconnor 11y ago>The current drop in prices seems to mostly be a price war between the Saudis and new producers in the US. It's probably not sustainable long term. In the medium term renewables will take over. It no longer makes sense to build an oil fired power station any more. In a few more years it will probably be cheaper to drive electric (it already is if you just count the energy cost). We might still continue making plastics and fertilizer from oil, but even for them the oil is substitutable. At that point we'll probably be more worried about the supply of other commodities and oil will be no more important to us than copper or iron ore.