Bush’s remarks address demand (and made the headline here), but this article is mainly a reminder that heating oil, gasoline, and natural gas problems –even absent terrific hurricanes–are supply issues. Encouraging consumers to slack off demand is good PR, but unlikely to matter much in the market, especially now that the summer “driving season” is over.
As our Shaftesbury luncheon guest Ed Erickson pointed out in his talk yesterday, there is a better understanding now than there was in the 1970’s that pricing is key, that letting markets work things out over time is also key, and that conservation cannot be the sole or most important solution. This reiterates the point that Prof. Erickson made concerning the positive effect of growing worldwide demand. Together with worldwide supply flexibility, there are plenty of market forces at work, if regulations do not choke off the opportunities, to deliver adequate fossil fuel supplies in the U.S and elsewhere.
