Performance of government in energy regulations. [Brief review]

TL;DRAbstract

The specific standard of optimum resource conservation is used to evaluate the government's performance in energy regulation in anticipation of new government proposals for a National Energy Plan. Five major areas of government intervention into the energy sector over the past fifty years are examined: percentage depletion allowance tax treatment for oil and gas production, the lsting of intangible drilling costs as expenses, prorationing rules for depth-acreage and well-spacing, import quotas, and price controls on natural gas. The impact of these policies is judged to be counterproductive in terms of resource conservation because of the economics and political pressures of our system of government, the acceptance of the market failure concept, the compromising nature of the legislative process, the breakdown in the administration of legislation, and the fact that the net costs of the correction exceed the cost of the externality. 12 references.

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