The Beacon

Blog Tags: Economics

The Real Reason for High Gas Prices

Andy Sharpless is the CEO of Oceana; this post also appeared on Politico.

Why do we take terrible risks to drill for oil in the Gulf of Mexico and elsewhere along our coasts?

Most people would say we drill to protect ourselves from big fluctuations in the price of a gallon of gas that are caused by the major upheavals in the Middle East. Look at this chart (data from the Energy Information Administration):

Their argument is that the more oil we can produce domestically, the lower the price we’ll pay at the pump. It’s not that they like the sight of oil wells off our beaches. The main reason they are doing so is they think it will save them money – especially as gas prices approached $4 a gallon recently.

This idea is not only intuitively appealing, it is repeatedly, and unambiguously, promoted by important government officials from both parties. Sen. Mary Landrieu (D-La) defended new legislation that would expand offshore oil drilling, saying “this bill would do more to lower gas prices at the pump than any other plan.” Sarah Palin criticized President Barack Obama, “His war on domestic oil and gas exploration and production has caused us pain at the pump.”


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The Value of an Abundant Ocean

What are healthy fisheries worth? What, then, are healthy oceans worth?

Well, we’d argue they’re priceless, but a new report quantifies their value, and it’s no small change.

The first comprehensive, peer-reviewed estimate of the global social and economic contribution of fisheries was recently published online in four papers. In the report, scientists from the University of British Columbia’s Fisheries Centre quantify the value of the world’s fish, and calculate the loss of both revenue and dependable protein sources from overfishing.

Here are a few highlights from the report:

*Global fisheries, a vital source of food and revenue throughout the world, contribute between $225-$240 billion per year to the worldwide economy.


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Economics 101: Don't kill whales

Two weeks ago, Iceland announced it would defy the 20-year old worldwide whaling ban and resume its commercial whale hunt. They sure didn't waste any time! Two whales have already been caught, leaving 37 more kills to go.

Iceland claims this decision is all about business, so let's take a look at the business side of what they actually are doing. For those of you who slept through this lesson in high school, I'd like to tell you about a little thing I like to call "economics."


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