Office Hours: Richard Newell on Energy

The former head of the U.S. Energy Information Administration and current director of the Duke University Energy Initiative, Richard Newell researches and analyzes the economics of energy policy. In a recent Office Hours interview, the Gendell Associate Professor of energy and environmental economics discusses the myth of American energy independence and offers insight into current U.S. energy debates.

On American energy independence:

We’re getting to the point where we will be meeting all of our domestic needs for natural gas through domestic production. So there is a point at which you can become physically self-sufficient in energy. Does that mean that you’re energy-independent? Even if we produced all of the oil that we need domestically, that wouldn’t make us independent of global oil markets. As prices changed globally, they would change in the U.S.

On the Keystone XL Pipeline:

The construction of the pipeline itself would create a lot of jobs and would cost billions of dollars, which would mean economic opportunity for those involved in the construction. On the other hand, the pipeline would be bringing crude from the Albertan oil sands, which has raised environmental concerns. The thing that makes oil sands different from conventional oil is that they’re harder to extract—you have to dig up the oil, you have to remove the sand that comes along with it.

On electric cars:

At the tailpipe of an electric vehicle, there are no emissions, so it’s extremely clean from a local environmental point of view... Right now the main hurdle for electric vehicles is the cost. Once you’ve got an electric vehicle, it’s actually cheaper per mile driven than gasoline. However the cost of [buying] electric vehicles is thousands of dollars higher than buying a conventional car.

On the recent increase in gas prices:

Over the last couple of months, there’s been decreased Saudi Arabian production of oil and some increased positive outlook in terms of growth in the global economy. Those things have led to an increased price of oil... [And] as the summer driving season comes in late spring, every year we see a tickup in gasoline prices, about twenty cents per gallon. This year we’re seeing that a lot earlier than we normally would.