“Price controls cause shortages, and government allocation exacerbates it. This was learned the hard way during the 1970s, particularly with oil, thanks to Republican President Richard Nixon.”
George Melloan’s review of Jane Mayer’s Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (Wall Street Journal, January 15, 2016) criticized her foray into energy and energy policy:
Ms. Mayer might herself benefit from an economics course. She writes that Richard Nixon imposed economic controls on oil and gas in 1971 to “address the energy crisis.” The Nixon price controls helped to cause the energy crisis.
Intrigued, I bought Dark Money to see exactly what she said. Here is the passage from Mayer (p. 91) referenced by Melloan:
…The fossil fuel industry’s fondest wishes were also fulfilled.
“Successful demonstration of the [Ovonic NiMH] battery’s capabilities have resulted in numerous commercial developments: … General Motors has entered into a joint venture with Ovonic…. Honda and Toyota have announced that their new electric vehicles will be introduced with NiMH batteries….”
– Business Council for Sustainable Energy (1996)
The new US/global reality of supply-over-demand oil economics spells big trouble for electric vehicles, which were not economic at formerly high gasoline and diesel prices at the pump. The latest setback will, once again, reveal government subsides and related crony business as an economic fail.
Batteries are a big problem, just as they were in a few years ago when competing petro prices were higher — and back in Thomas Edison’s day despite the best efforts of Henry Ford.
I recently ran across this study from November 1996 from the Business Council for Sustainable Energy, “Changing Tide: Tomorrow’s Clean Energy–Today.”…
Previous posts at MasterResource have documented the lack of open intellectual inquiry at Resources for the Future (RFF) regarding the physical science of climate change and the case for government-led transformation of energy sources.
A third post yesterday documented RFF’s buy-in to resource pessimism and gapism (more government intervention in place of price and allocation decontrol) in the pivotal 1970s.
Trends can change. They should change. RFF as a scholarly organization should:
…1. Recognize the physical science of climate change as highly unsettled and thus open to contrary public policy positions.
Implication: Consider ‘global lukewarming” as a base case for economic analysis.
2. Recognize the benefits, the positive externalities, associated with the anthropogenic influence on climate.
Implication: Open a research program on the benefits of carbon dioxide emissions/concentrations, not only costs, as has been the case with RFF’s analytics to date.