Pisarski Brooks In both the world as a whole and the U.S.

S., the energy problem is essentially a fluid fuel problem and only secondarily a problem of total energy demand in relation to supply. From a technical standpoint the fluid fuel scarcity can be addressed either by developing other relatively capital-intensive sources of fluid fuels, or by developing alternative energy forms such as electricity which can be generated from nonfluid primary resources such as uranium, coal, or the sun. Pg 246 need for a long-term policy which stresses diversity of energy resources and conversion technologies in order to avoid the vulnerability associated with over-dependence on any single energy source, such as we have today in the case of petroleum. Pg 247 The key element in the future mobility of the U.S. population will continue to be the automobile. Pg 70

Gruenspecht Proponents of more stringent standards allege that the declining fuel economy of the new-vehicle fleet in the United States plays into the hands of Al Qaeda; opponents claim that tighter standards would lead directly to smaller cars and, therefore, carnage on the highways. Pg 203 In the Energy Policy and Conservation Act of 1975 (EPCA), Congress created the Corporate Average Fuel Economy (or CAFE) program. Congress required each manufacturer of new passenger cars to meet a sales-weighted average of 18 miles per gallon (mpg) by Model Year 1978, increasing steadily to 27.5 mpg for Model Year 1985 and beyond. Congress also directed the National Highway Traffic Safety Administration (NHTSA) to establish fuel economy standards for what are called light-duty trucks?a category that includes pickup trucks, minivans and sport utility vehicles (or SUVs). Pg 204 If the fuel economy improvements of the late 1970s and early 1980s were a response only to rising gasoline prices, we might have expected a gradual fall-off in fuel economy in the years following 1982; it is likely that the CAFE standards established a floor preventing such a decline. Pg 204 Rising oil prices seem to retard economic activity more than falling prices spur it. Pg 206 Even if the United States produced all the oil it used, it would still suffer from supply disruptions anywhere in the world because the price of oil is set in world markets. The

only way to insulate the U.S. economy from these disruptions is to reduce the oil intensity of the U.S. economy or limit the size of the price spikes themselves. Pg 206 If fuel taxes already perfectly correct for externalities, then a reduction in gasoline de? mand does not lead to any net welfare gain, as the source of market failure has effectively been eliminated; and if current taxes overcorrect for externalities, a reduction in the demand for gasoline will actually lower social welfare. Pg 210 Next, since tighter fuel economy standards will make it less expensive to drive an additional mile, to the extent people respond by driving more (as argued below in more detail), local pollution could actually increase. Pg 208 First, there is no doubt that far more efficient tools exist for reducing oil consumption and greenhouse gas emissions. But the most efficient of these taxes on gasoline or the carbon content of fuels, or tradable allowances for carbon emissions face especially stiff opposition in the current political climate. Second, while it is a less efficient approach, the current regulatory edifice supporting CAFE standards would be greatly improved by making fuel economy credits transferable between passenger car and light-duty truck fleets and especially between different manufacturers. Pg 216

Campbell The value of oil comes from its centrality to one of the defining characteristics of U.S. society - mobility. It is mobility that drives U.S. oil consumption as the transportation sector accounts for two-thirds of petroleum use. (Campbell Pg 953)

Joskow Energy, like transportation and telecommunications services, is a key intermediate input into most sectors of a developed economy. Distortions in prices, consumption, supply, or reliability of energy infrastructure services can lead to large economic and social costs. (Joskow Pg 23)

Lave The automobile has provided an unprecedented degree of personal freedom and mobility, but its side effects, such as air pollution, highway deaths, and a dependence on foreign oil suppliers, are undesirable. The United States has tried to regulate the social cost of these side effects through a series of major federal laws. Since the laws intrude on the interaction between buyers and manufacturers, they have all caused controversy. (Lave Pg 893)

Bedzek

In the fall of 1973, a new phrase entered the American lexicon: "energy crisis." On October 17 of that year, the Organization of Petroleum Exporting Countries (OPEC) slapped an embargo on oil exports, hoping to punish the United States for its support of Israel in the Six Days' War. (Bedzek, Pg 132) For the first time, most Americans awakened to the fact that they were dependent on oil from abroad and not just from anywhere, but from one of the most politically volatile regions in the world. (Bedzek, Pg 132) The toppling of the Shah of Iran in 1978 precipitated a second energy crisis that winter. In 1981, the cost of gas at the pump reached its highest levels ever (nearly $3.00 in inflation-adjusted dollars). Prices moderated over the following decades, but the terrorist at tacks of September 11, 2001, and the ensuing wars in Afghanistan and Iraq have once again called into question the security of U.S. oil supplies. (Bedzek, Pg 132) When the energy crisis hit America in 1973, the fuel efficiency of the average U.S. passenger car had fallen to less than 13 miles per gallon (mpg). (Bedzek, Pg 132)

Hamilton The single most important fact for understanding short-run changes in the price of oil is that income rather than price is the key determinant of the quantity demanded. (Hamilton Pg 216) The price elasticity of petroleum demand has always been small, and it is hard to avoid any conclusion other than that it became even smaller in the United States in the 2000s. (Hamilton Pg 218)