Not related to this post but it would be interesting to read Dean blog about WaPo's attempts to join lobbyists and politicians - for a fee. Beat the Press on this one:

Washington Post cancels lobbyist event amid uproar

As I read the two statements, Dean and the Post are saying much the same thing here, though Dean's gloss is no doubt the more thoughtfully executed of the two descriptions: "If the dollar falls in value against other currencies [i.e. "weak dollar"], then other things equal, oil should rise in price measured in dollars" [i.e. "support energy prices"]. And they both (uncontroversially) agree that weakening demand tends to undermine this "support." Dean, if I understand him correctly, would add that the price support is only nominal, in the sense that international oil prices are generally quoted in dollars, and in the sense that most trade of oil is done in dollars, despite there being no requirement, in theory or practice, that transactions be made in dollars. Whether parties choose to trade for oil in dollars or other currencies, other things equal, the price would be falling in terms of the currencies that are rising relative to the dollar.

I do not quarrel with Dean's points here per se. But I note the Post's framing of the issue (reinforced by Dean): the focus on prices and weakening demand. Arguably, the fact of declining supplies (albeit somewhat related to the economy-spawned energy price collapse of the past year) and the inevitability of dramatic declines in future energy supplies (independently of anything that may happen to price) are much more important in terms of the society's ability to plan its future. At least in Dean's case, the neglect of the matter is extreme, to the point that Dean has never explicitly mentioned, to my knowledge, that this prospective decline in energy availability exists as an economic issue.

Since Dean has not discussed the reasons for his focus on price, I can only guess at some of his thinking processes. Perhaps he might hold that only the focus on future prices lies within his competence as an economist. But suppose that global (or U.S.) energy availability twenty years from now is 20% or 50% or 90% less than it is now. I take it, following the IEA, that current levels of energy use are "patently unsustainable." Granted there may be some controversy over the actual rates and timing of the decline, but surely the issue is meaningful. And that is the basic issue to which policy must respond. On the other hand long range energy _price_ forecasting is totally meaningless. (Elsewhere, Dean has perhaps inadvertently reinforced the idea that such forecasts are meaningful in his denials that new Gulf of Mexico production will significantly impact prices levels.) To see why, consider the question of how one predicts what energy prices should be at a 50% reduction in energy availability, given that the trend during the past couple centuries has been economic expansion based on increasing energy availability. One cannot even begin to answer, and the question itself is far removed from the one that actually needs addressing: To what specific purposes conducive to survival should the vestiges of the world fossil fuel endowment be allocated?