Thursday, May 24, 2007

Gasoline Prices and Economists

The gents at Environmental Economics have some thoughts on gasoline related to the two posts below:
"The oil industry wonders why they should invest in more refinery capacity (i.e., supply) today if the US government will subsidize or mandate renewable substitutes in the future. One thing missing from the oil industry's assertion is that if renewable fuels fill the gap, supply of gas will increase and price will fall. The oil industry might be guilty of a bit of disingenuity on this one. Just a bit."