PS 3480, Environmental Politics, October 10, 2012

   

How Does the United States Govern Energy?

1.  Energy in the United States - an overview

    

         The DSP and prosperity require energy -

                  but coal, oil, and nuclear power have had extensive environmental costs

 

 

    Energy and electricity basics

 

        Electricity is governed by state public utility commissions and by the Federal Energy Regulatory Commission

 

        The "smart grid"

           

 

 

2. The Politics of Energy

 

The politics of energy

–Geography – where is it? Who governs it?
–Product characteristics – What are the politics of extracting, moving, and generating the power?
–Market structure and stability – are the lots of producers? Are prices volatile?

 

 

3.  The Politics of Coal 

 

        Large amounts are located in a minority of eastern and Rocky Mountain states.

 

        Extraction requires mining - transport requires lots of effort because it is heavy.

 

        Prices are much more stable than oil

 

        Producers are more concentrated today

 

        Consumers tend to be large organizations

  


4.  The Politics of Oil

 

· Oil in American economy and culture

    Large amounts in a few states

    Extraction requires drilling - and can create a terrible collective action problem

 

· Prices have been very volatile The central problem for the industry:
  How to control production and prices after a new pool is discovered

 

· Solution 1: The Large Corporation

 

        The Standard Oil Company and the Governing of Oil

 

The History of the Standard Oil Company by Ida Tarbell, 1904

 

 

· Solution 2: Government Regulation 

 

    The Texas Railroad Commission

 

    OPEC

 

 

· OPEC, the Oil Crises of the 1970s and the environmental agenda