By James Hamilton, Econbrowser It is looking unlikely that there will be more stimulus from either fiscal policy or monetary policy. Former President Bill Clinton has called for suggestions for other policy options that might be helpful. Here are a few ideas along those lines.
The sheer size of the applications has made them difficult to manage, said George Morris, chief operating officer of Houston-based ATP Oil & Gas Corp. “We went from 39 pages to 3,900 pages on a permit,” Morris said.
Develop Alaskan energy sources. Shell Oil Company claims that developing Alaskan offshore oil would create 50,000 jobs per year, and the company has invested more than $3.5 billion in leases and in supporting infrastructure. The latest roadblock is the ruling by the EPA’s Environmental Appeals Board that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project, some 70 miles away from the nearest residents in remote Kaktovik, Alaska. Apply sensible cost-benefit analysis. Here’s a report from ABC News:
The sand dune lizard is a small reptile that has become the scourge of the Texas Oil industry, not because it is dangerous but because the threatened species could put land ripe for oil exploration off limits. “As far as I am concerned, it is Godzilla,” Texas land commissioner Jerry Paterson told ABC News. “[It’s] the biggest threat facing the oil business in memory,” said Ben Shepperd, president of the Permian Basin Petroleum Association. They believe the small tan-colored, insectivorous lizard could cost the oil industry and surrounding communities thousands of jobs…. The federal government said the sand lizard is on the verge of extinction, and is expected to place it on the endangered species list soon. If the species makes the list, its 800,000 acre habitat in the shinnery oak sand dune communities of southeastern New Mexico and southwestern Texas would receive protected status. That habitat happens to be right in the heart of Texas oil country.
Granted, the employment benefits possible from following the suggestions above would be a drop in the bucket as far as the millions of Americans still needing work. But I think they illustrate the possible benefits of a sweeping directive from the President to all administrative agencies that jobs really do come first. If such an announcement were made from the White House in conjunction with the four specific steps noted above, I could imagine an immediate boost to consumer sentiment and perhaps a noticeable drop in oil prices as well. My basis for the latter claim is the huge disparity in price between Brent and West Texas Intermediate, which suggests potentially significant effects of a commitment to produce more domestic crude and make sure it gets to refineries on the U.S. coasts. May I also suggest that, in addition to providing a boost to the economy, such an initiative might prove helpful for the President’s poll numbers. James D. Hamilton is Professor of Economics at the University of California, San Diego.