Energy Policy PA 395 Friday, June 4, 2004 Gary Flomenhoft

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

2. 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

3. 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 Admin CACVP-Ca Central Valley Project 1935-Federal Power Act (FPC) 1938-Natl Gas Act

4. Roosevelt Oil Policy controlled by Oil companies Interstate Oil Compact Commission Connolly Hot Oil Act of 1935-production quotas WWII-possible oil shortage Ickes authorized to buy and sell foreign oil Interior Dept. authorized to control domestic prices of oil products, ration supplies, and allocate production to defense and civilian use Oil=strategic asset therefore govt. has a duty to be engaged.

5. Trumanthe URL is www.uvm.horizonlive.com l 1946 Atomic Energy commission-civilian not military Agency. Tool in the cold war demonstrating superiority Of US system. Anti-trust vs Oil companies Synthetic fuels first funded

6. Truman 1946 Atomic Energy commission-civilian not military Agency. Tool in the cold war demonstrating superiority Of US system. Anti-trust vs Oil companies Synthetic fuels first funded Anglo-Iranian Oil Co.- Iran wage dispute Got anti-trust immunity to deal with it. Interior Dept. created foreign Petroleum supply committee FTC investigation, Justice Dept. Civil damages

7. Truman First Energy sector analysis: Harold Barnett, Interior Energy Uses and Supplies 1948 “Most fuels were finite in quantity, could not be increased In 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 substitute Liquid fuels derived from coal.

8. Truman Liquid Synthetic Fuels Act of 1944: $225,000 by Interior Dept. of Mines 1951: Interior Sec Krug- $455M loan guarantees for synfuels Expired 1952-costs too high-”5 years away from Being cost competitive”

9. Eisenhower Paley commission chartered by Truman: “Meticulous analysis, complex modeling, brilliant graphic Presentations” Agnostic on policy recommendations Cheap foreign oil-10% of imports: affect on domestic Extraction. Troubling %! Mideast oil owned, produced, transported, refined, retailed By 7 sisters: Std. Oil NJ, Texaco, guld, Std Oil CA, Mobil, BP Royal Dutch Shell

10. Eisenhower June 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

11. Eisenhower 1955 voluntary program to reduce oil imports 1959 mandatory oil import quotas=distortion Under Trade agreement extension Act of 1955 Predicted effect raise consumer prices-accelerate depletion of US reserves-, and Created trade barriers- Gatt problem(Randall), chairman council On foreign economic policy National security justification-backfired?

12. Eisenhower Venezuela immediately formed OPEC Accelerated nationalization fo oil producers 1959 “given the nationalistic climate which todaqy prevails In Venezuela, it si doubtful that the line can be held at any Point short of total govt. control if not expropriation.” -staff report Proectionism has international diplomatic consequences But domestic economic consequences. Nixon later lifted import quotas, but imposed price controls Congress prone to slow deliberations on energy

13. Eisenhower 1953-Atoms for Peace-Cold War propaganda 1954-Atomic Energy Act-AEC-NRC 1954-Phillips vs. Wisconsin= natural gas regulation inter -state, not intra-state. 35 year effect Controls of price, production, source ahd bad effect for 20 years

14. Kennedy& Johnson 1953-Atoms for Peace-Cold War propaganda 1954-Atomic Energy Act-AEC--->NRC 1954-Phillips vs. Wisconsin= natural gas regulation inter -state, not intra-state. 35 year effect Controls of price, production, source ahd bad effect for 20 years