James Hamilton on energy markets

Bryan Caplan at EconLog blogs on Two Interesting Things James Hamilton Told Me. Caplan writes

Noted energy economist James Hamilton just spoke at GMU. The two most interesting things he said:

1. OPEC has almost no effect on world oil prices; most countries produce less than their quota, and when countries want to produce more, their quota goes up.

2. The price of oil follows a random walk. But the oil industry isn't trying very hard to develop new sources because oil execs believe that the price of oil is mean-reverting (i.e., what goes up must come down). Why are the oil execs so wrong? Hamilton's guess: They're putting too much weight on their last big experience with high oil prices in the 70s and 80s.

I'm guessing that both these conclusions will not be what people expected, 1 in particular. Most people would think OPEC is willing and able to control the price of oil.