The political economy of oil prices in the United States is complicated. The United States is the world’s largest oil consumer and one of its biggest importers. But it is also a substantial producer with large oil and gas resources. And its oil is medium-cost, more expensive to produce than the large fields in the Middle East but cheaper than frontier areas like the Arctic. U.S. politicians tend to be happiest with mid-priced oil: not too expensive to upset motorists but not too cheap to threaten the survival of domestic production and increase dependence on imports. In the last century, the country has swung between confidence in its self-sufficiency and energy independence to extreme insecurity about its dependence on imported oil (“Oil scarcity ideology in U.S. national security policy”, Stern, 2012). In recent years, the debate […]

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