The Brent price of crude oil declined from $112 in June 2014 to a low of $31 in January 2016 (both nominal prices), a cumulative decrease of more than 70%. Some attribute the decline to increased oil production due to the U.S. shale revolution. This paper proposes a variety of diagnostics to assess the how consistent this explanation is with the data. I find that the data are broadly inconsistent with this attribution of the decline to shale oil. Rather, the data are more consistent with a demand-side explanation of weakening global economic conditions and demand for commodities, including but not limited to oil. In summary, there is no evidence that the U.S. shale revolution played a significant role in the decline in oil prices since 2014. Rather, the evidence suggests that weakening oil demand played a much stronger role in driving the 2014 decline in oil prices.
Common Resources — Jun 23, 2022
Income Inequality Is a Key Driver of Decreased Residential Electricity Consumption
New research shows that rising income inequality has been just as influential as energy-efficiency programs in reducing electricity consumption.
Working Paper — Jun 23, 2022
Rising US Income Inequality and Declining Residential Electricity Consumption: Is There a Link?
This paper examines the effects of rising income inequality on residential electricity use, finding that climate and air quality improvements valued at $3.14 billion in 2020 due to lower electricity consumption.
Press Release — Jun 23, 2022
Rising Income Inequality Linked to Declining Average Household Energy Consumption
A new study finds that falling household electricity consumption is due in part to rising income inequality—an indication that policies addressing inequity may inadvertently increase consumption and associated pollution.