SYNOPSIS: Here is a supplement to Krugman's Times Op-Ed, The Third Oil Crisis?
If you want to get slightly scared about the economic implications of Middle East conflict, here's a useful chart from an Energy Information Agency report from a few years back. It shows how the strategic importance of OPEC, and of the Persian Gulf in particular, declined dramatically after the oil crises of the 1970s; that's why there weren't any more crises for 20 years. But now, through inattention, laziness, and greed, we've revived that strategic centrality.
And no, drilling in ANWR is no answer. At peak, more than 10 years from start, it would produce a bit more than 1 percent of the world total. Take a look at the chart and see if that would make much difference.
Conservation is the only way to make big inroads on this vulnerability in the medium term. And alternative sources of energy are the only long-term answer.
Originally published on the Official Paul Krugman Page, 4.9.02