Plain English with Derek Thompson Why Gas Prices Are Skyrocketing—and an Ingenious Plan to Bring Them Down
Jun 21, 2022
Skanda Amarnath, the Executive Director at Employ America and co-author of an innovative plan to enhance oil capacity, joins the discussion. He highlights the urgent need to tackle skyrocketing gas prices, now a major economic and political issue. The conversation explores the role of government policies in stabilizing the energy market and suggests strategies like using the Strategic Petroleum Reserve. Amarnath also emphasizes the importance of balancing immediate economic relief with long-term climate goals in managing oil supply.
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The Importance of Energy Prices
- High energy prices significantly impact the economy, psychology, and politics.
- These prices affect transportation costs, consumer sentiment, and even presidential approval ratings.
The Peculiarity of Oil Markets
- Oil markets behave unusually.
- Unlike other markets where rising prices incentivize increased production, oil companies have been hesitant to drill more despite high prices.
Oil Price Volatility
- Oil prices have crashed multiple times in recent years (2014-2016, 2018-2019, and 2020).
- This volatility makes oil companies reluctant to invest in new wells, fearing further price drops.