Welcome to Cato Daily

Daily Podcast with Anastasia Glova. Today is Monday April 16th. In today's

episode I talk with University of Texas Professor Eugene Gulse about his

Cato study, Energy Alarmism, the myths that make Americans worry about oil.

The policy analysis argues that Americans and politicians fears about

energy security are entirely overblown. Without further ado here is

Eugene. So what are some of the myths that Americans hold about energy security?

Well I think the principal myths that we're tilting at in the paper is that foreign and military policy are useful tools for responding to threats

to American energy security.

There are a number of threats that people don't understand as carefully as they should, and in particular, they leap to conclusions about how foreign policy might respond to those threats and our paper is really

about foreign policy in response to threats to energy security.

Global oil demand is growing, true, and so is political instability in the Middle East, and a sudden cutoffs in

supply would definitely impact oil prices in huge ways.

How would you answer that?

I'm not sure that I would agree with all the premises of your question.

So it's true that global oil demand is growing and it's true that there's political

instability in a lot of regions that supply oil.

But I think one of the main arguments of our paper

is that most supply disruptions, particularly ones that are caused by political instability, are likely

to lead to self-correcting market responses.

That companies and countries going about their normal business trying to make money

in the oil market or trying to satisfy their demand for consuming oil act to counteract most shocks such that the long-term price effects

...