David Victor on the Factors to High Oil Prices
Who's Really to Blame for Pain at the Pump?
04/09/2012
Ralph Cavanagh,
Natural Resources Defense Council
If you ask most people why oil prices are so high, their responses revolve around two distinct theories:
A greedy “Big Oil” cabal is driving prices to excessive levels through devious strategies of market manipulation. However, a host of investigations has yet to find any convincing culprits.
Prices would drop if only U.S. oil reserves were extracted faster. This is a common belief even though decades of experience have shown no correlation whatever between U.S. oil production (now at an eight-year high) and oil prices. U.S. oil production is the highest it's been in years -- but gas prices are still going up and it would take years before we'd see a drop from new drilling. What’s more, changes in U.S. oil production represent far too small a fraction of global supply to shift prices here or anywhere else, no matter how much of America’s territory is opened to drilling.
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David G. Victor is a professor at the School of International Relations and Pacific Studies and director of the School’s new Laboratory on International Law and Regulation. His research focuses on how the design of regulatory law affects issues such as environmental pollution and the operation of major energy markets. He is the author of Global Warming Gridlock, which explains why the world has not made much diplomatic progress on the problem of climate change while also exploring new strategies that would be more effective.
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