Drilling for more oil in the United States won't lower prices at the pump and won't create jobs, says Nobel economist Paul Krugman.
Demand for oil is growing worldwide, and drilling in U.S. territories won't produce enough oil in a global market to lower prices at the pump, Krugman writes in his New York Times column.
"Oil prices are up because of rising demand from China and other emerging economies, and more recently because of war scares in the Middle East; these forces easily outweigh any downward pressure on prices from rising U.S. production," Krugman writes.
Meanwhile, the oil industry wouldn't create more jobs.
Take North Dakota, where an energy boom is playing out.
Proponents of more drilling argue low unemployment in North Dakota should serve as model for overall U.S. energy policy.
"Yes, the oil boom there has pushed unemployment down to 3.2 percent, but that’s only possible because the whole state has fewer residents than metropolitan Albany — so few residents that adding a few thousand jobs in the state’s extractive sector is a really big deal," Krugman says.
Natural gas fracking, meanwhile, hasn't made much of a dent in Pennsylvania's employment rates.
Treasury Secretary Tim Geithner has said oil prices serve as a hurdle to U.S. economic recovery, especially with Europe's fate remaining murky.
"We're going to need to keep a close eye on oil and Iran and gas prices plus we've got to make sure Europe keeps moving to sustain its progress," Geithner told the Economic Club of New York, according to Reuters.
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