Energy Policy PA 395Friday, June 4, 2004Gary Flomenhofthttp://www.uvm.edu/~gflomenh/ENRG-POL-PA395/

P282 “Few words so innocently incorporate into their basic meaning as much simplifying illusion as does the word policy.” -Cordell Moore

“In theory, the making of national policy seeks to redress social ills, remedy economic inefficiencies, provide prudent access to natural resources, and generally transform a multiplicity of special interests into some common good. Policy, however, is made by men and women whose deliberations are driven by political passion and human frailty. Policymaking embraces the maker’s relative skill in the exercise of power, personal standing in the hierarchy of authority and the need to temper the highly desirable with the politically feasible.” -Vito A. Stagliano

Roosevelt-Rise of energy bureacracy

Natl. Resources Board 1934-Natl. resources planning Board

New Deal:TVA-1933 Tenn Valley Authority-“hotbed of communism”BPA-Bonneville Power AdminCACVP-Ca Central Valley Project

1935-Federal Power Act (FPC)1938-Natl Gas Act

RooseveltOil Policy controlled by Oil companiesInterstate Oil Compact CommissionConnolly Hot Oil Act of 1935-production quotas

WWII-possible oil shortageIckes authorized to buy and sell foreign oilInterior Dept. authorized to control domestic prices of oil products, ration supplies, and allocate production to defense and civilian useOil=strategic asset therefore govt. has a duty to be engaged.

Trumanthe URL is www.uvm.horizonlive.com

l1946 Atomic Energy commission-civilian not military Agency. Tool in the cold war demonstrating superiorityOf US system.Anti-trust vs Oil companiesSynthetic fuels first funded

Truman1946 Atomic Energy commission-civilian not military Agency. Tool in the cold war demonstrating superiorityOf US system.Anti-trust vs Oil companiesSynthetic fuels first funded

Anglo-Iranian Oil Co.- Iran wage disputeGot anti-trust immunity to deal with it.Interior Dept. created foreign Petroleum supply committee

FTC investigation, Justice Dept. Civil damages

TrumanFirst Energy sector analysis: Harold Barnett, InteriorEnergy Uses and Supplies 1948

“Most fuels were finite in quantity, could not be increasedIn production or substituted for each other without substantial lead time, were developed only with very large investments, and were frequently produced in non-Competitive industries.”

Over-dependence on foreign oil. Should substituteLiquid fuels derived from coal.

TrumanLiquid Synthetic Fuels Act of 1944: $225,000 by Interior Dept. of Mines

1951: Interior Sec Krug-$455M loan guarantees for synfuelsExpired 1952-costs too high-”5 years away fromBeing cost competitive”

EisenhowerPaley commission chartered by Truman:“Meticulous analysis, complex modeling, brilliant graphicPresentations”

Agnostic on policy recommendations

Cheap foreign oil-10% of imports: affect on domesticExtraction. Troubling %!

Mideast oil owned, produced, transported, refined, retailedBy 7 sisters: Std. Oil NJ, Texaco, guld, Std Oil CA, Mobil, BPRoyal Dutch Shell

EisenhowerJune 1951, Mossadegh regime (IRAN) begins to nationalize

Iranian oil. Anglo-Iranian Oil co. lock out of oil technicians

By Iranian troops=6% shut down of world oil

7 sisters tried to deny technology to run industry. “too

Primitive”

Consortium of western producers including those under

indictment

Eisenhower1955 voluntary program to reduce oil imports1959 mandatory oil import quotas=distortionUnder Trade agreement extension Act of 1955

Predicted effect raise consumer prices-accelerate depletion of US reserves-, and Created trade barriers-Gatt problem(Randall), chairman councilOn foreign economic policy

National security justification-backfired?

EisenhowerVenezuela immediately formed OPECAccelerated nationalization fo oil producers1959 “given the nationalistic climate which todaqy prevailsIn Venezuela, it si doubtful that the line can be held at anyPoint short of total govt. control if not expropriation.”-staff report

Proectionism has international diplomatic consequencesBut domestic economic consequences.

Nixon later lifted import quotas, but imposed price controlsCongress prone to slow deliberations on energy

Eisenhower1953-Atoms for Peace-Cold War propaganda1954-Atomic Energy Act-AEC-NRC1954-Phillips vs. Wisconsin= natural gas regulation inter-state, not intra-state. 35 year effectControls of price, production, source ahd bad effect for 20 years

Kennedy& Johnson1953-Atoms for Peace-Cold War propaganda1954-Atomic Energy Act-AEC--->NRC1954-Phillips vs. Wisconsin= natural gas regulation inter-state, not intra-state. 35 year effectControls of price, production, source ahd bad effect for 20 years