In his article, Economic Forecast 2014-2015: Looking Better
With Help From Oil And Gas, Dr. Bill Conery predicts real GDP growth
in 2014 and 2015 of 3.3 percent and 4.1 percent respectively. While Conery
cites general reasons for a rise in GDP like increases in consumption and
businesses ramping up their capital expenditure on equipment, his most
interesting claim calls for net exports to carry real GDP higher. Theory would
suggest that net exports would decrease as the economy improves and our currency
appreciates, making US goods more expensive and foreign goods less expensive,
increasing imports and decreasing exports. Conery argues that increased domestic
oil and gas production will reduce our reliance on petroleum imports. Petroleum accounted for 77 percent of our imports in 2012. That ratio
is declining now and will continue to drop moving forward. Clearly, net exports
should rise as a result of slowing petroleum imports and real GDP will be
positively impacted.
I have to think that an increase in domestic oil would do wonders for our economy. Not only would we be able to export a very important resource, but it would also limit our dependency on OPEC, which would be a good thing. Hopefully Dr. Conery is correct in his predictions.
ReplyDeleteI agree with the premise that domestic oil can better for our economy than importing oil abroad as we will be more independent of oil imports from dynamic regions. However, it is more important for the US to encourage alternative energy resources that do not encourage climate change as much as oil does. Economically, it makes sense to promote clean energy over oil as an increase in oil consumption will encourage worse effects of climate change. It has been predicted by 2020, the US economy will lose 3.8 billion dollars per year due to climate change: http://www.huffingtonpost.com/2013/01/08/joe-stiglitz-climate-change-economy_n_2432744.html
DeleteI agree also that domestic oil can better our economy. Hopefully, with the keystone pipeline being built, not only will producing the oil be easier but the amount of oil exports will rise as well. We do, however, need to be more cautious to the affects that the oil producing and consumption is to the environment.
ReplyDeleteI like the article Litz. I was looking into seeing if offshore drilling was a possibility. So many articles online have said it won't lower gas prices in comparison to petroleum from Saudi Arabia. Lots of other articles say that inadequate information was presented regarding available reserves and environmental risks, and the US Court of Appeals for the 9th circuit agreed. I personally see benefit in offshore drilling, with so much more access to fuel, but that's up in the air for now
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