Thursday, April 23, 2020

Paul Krugman in 2008: Higher Oil Prices Won't Spur Shale Oil Production

Click here to read the original Cautious Optimism Facebook post with comments

With WTI May oil futures dipping briefly to negative $35 a barrel this week, the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff found this gem from New York Times columnist and New Keynesian economist Paul Krugman arguing it looks like the world has reached peak oil—back in 2008 (see link).

"Peak oil, that is — a dismal theory that keeps getting more plausible."

Krugman also mocked anyone who predicted 2008's high oil prices might bring unconventional oil sources like shale oil online.

"I spent many hours with Bureau of Mines publications containing firm estimates of the price of shale oil and oil-from-coal, all of which said that huge alternative supplies should be arriving any day now..."

"Well, people say that — but they’re always saying something like that..."

"Seriously, don’t believe the hype: history says that these things always fall short of expectations."

h/t to Nick Shaw's personal comment thread that referred me to this aging addition to the endless list of Krugman blunders.

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