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Many Californians still remember the electricity crisis in 2000 and 2001, when a combination of tangled state and federal regulations and opportunistic behavior by market participants led to soaring wholesale prices and rolling blackouts.
Could something similar happen today, but this time as a result of trading tied to policies for reducing carbon emissions and mandating a higher share of electricity produced from renewable energy?
The shale oil and gas revolution in the United States (U.S.) has led to a more than 4 million barrels per day increase in domestic oil production since 2008. Combined with an almost 1 million barrel per day increase from the Alberta tar sands, the surge in North American oil production has significantly reduced the region’s demand for imported oil. Increased production of shale gas in North America and the significantly lower dollar per million British thermal unit (BTU) price of natural gas versus oil have caused a number of sectors of the U.S.
Global oil prices may stay low for the next 10 or 20 years, according to Stanford economist Frank Wolak.
The most likely medium-term outcome is $50 to $70 per barrel, according to Wolak. He is the Holbrook Working Professor of Commodity Price Studies in the Department of Economics at Stanford University.
For 14 years, Mariano-Florentino Cuéllar has been a tireless Stanford professor who has strengthened the fabric of university’s interdisciplinary nature. Joining the faculty at Stanford Law School in 2001, Cuéllar soon found a second home for himself at the Freeman Spogli for International Studies.