FROM ISSUE NUMBER 59 - SPRING 1980 GO TO TABLE OF CONTENTS

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The American Energy Debate

ROBERT S. PINDYCK

THERE have been few domestic policy debates in the United States as divisive and as seemingly unresolvable as the one over energy policy. This debate began in earnest even before the OPEC oil price increase of 1973-74, focusing initially on the regulation of natural-gas wellhead prices as spot shortages of gas began occurring in 1971 and 1972. Then, as now, the argument was a simple one: Do we let the domestic price of energy rise so that our growing dependence on imported oil can be stemmed and spot shortages of fuels can be averted, or do we keep the price of energy low and try to reduce or limit imports with a patchwork of programs to subsidize synthetic fuels, promote conservation through tax incentives and exhortation, and, when shortages do occur, ration supplies?

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