The Costs of U.S. Oil Dependency

Ian Parry and Joel Darmstadter

No 10644, Discussion Papers from Resources for the Future

Abstract: This paper first describes trends and future predictions of factors that determine U.S. dependence on oil and oil imports. We then review evidence on the oil premium, that is, the extent to which the costs to the United States as a whole from extra oil consumption may exceed the private costs to individual oil users. The premium has two main components: one reflects the risk of macroeconomic disruptions from oil price shocks, while the other stems from U.S. market power in the world oil market. Our best assessment of the oil premium is $5/barrel (equivalent to 12 cents per gallon of gasoline), which would warrant a broad, though moderately scaled, tax on all uses of oil.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 40
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://ageconsearch.umn.edu/record/10644/files/dp030059.pdf (application/pdf)

Related works:
Working Paper: The Costs of U.S. Oil Dependency (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:rffdps:10644

DOI: 10.22004/ag.econ.10644

Access Statistics for this paper

More papers in Discussion Papers from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().