Authors: Noel D. Uri
Addresses: Commodity Economics Division, Economic Research Service, FEB/CEDIERS (Rm 1124), US Department of Agriculture, 1301 New York Avenue, NW, Washington, DC 20005, USA
Abstract: The analysis in this paper is concerned with the effect of energy scarcity on economic growth in the United States. After defining the notion of scarcity and introducing two measures of scarcity - unit costs and relative energy price - changes in the trend in resource scarcity for natural gas, bituminous coals, anthracite coal, and crude oil over the most recent three decades are investigated. Each of the energy resources became significantly more scarce resources during the decade of the 1970s in the Malthusian Stock Scarcity and Malthusian Flow Scarcity sense. Unit costs exhibit a similar change for natural gas and crude oil but not for bituminous coal and anthracite coal. The situation reversed itself during the 1980s. Natural gas, bituminous coal, anthracite coal, and crude oil all became significantly less scarce resources during the decade of the 1980s than they had been during the 1970s. That is, the increase in scarcity as measured by relative energy prices observed during the decade of the) 1970s was not reversed completely during the 1980s for natural gas and crude oil. Unit costs for natural gas and crude oil demonstrate analogous patterns and test results. Given that change has taken place, it has implications for future economic growth to the extent resource scarcity and economic growth are interrelated. To see whether this is a relevant concern, subsequent to the examination of changing resource scarcity trends, an objective effort is made to identify a long run equilibrium relationship between energy scarcity and economic growth. Relying on cointegration techniques, only for crude oil is there a suggestion that resource scarcity has affected economic growth in the United States over the period 1889-1992.
Keywords: energy economics; energy policy; energy scarcity; energy trends; scarcity measurement; natural resources; economic growth; USA; United States; unit costs; relative energy prices; natural gas; bituminous coals; anthracite coal; crude oil.
International Journal of Global Energy Issues, 1995 Vol.7 No.5/6, pp.278-290
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