Word: decontrolled
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...criticism of Carter's approach to oil price regulation, however, goes beyond when and how he has decided to decontrol oil prices: we contend that wholesale decontrol of oil prices is an ineffective and regressive policy that should not be part of any rational energy policy, much less its cornerstone...
...costs of decontrol far outweigh its minimal benefits. The Congressional Budget Office (CBO) estimates that it will cost consumers a staggering $16 billion annually in higher prices, not to speak of a higher rate of inflation throughout the economy. And the distribution of this cost will fall most heavily on the elderly and the poor, who spend a greater proportion of their income on fuel...
Proponents of decontrol contend that higher oil prices will induce consumers to conserve energy. But the demand for oil is highly inelastic: price increases do not lead to a proportionate decline in use. From 1973 to the present, the price of home heating oil increased by 184 percent; but instead of falling as the theory would predict, consumption rose 17 percent. The CBO estimates that by 1985 decontrol will reduce current levels of consumption by, at best, a meagre 1.7 percent...
Next, proponents contend that decontrol would increase oil production. But decontrol is a very inefficient way to increase oil production. While, as one expert put it, "smaller and smaller increments of hard-to-get oil are produced at higher prices, such marginal increases do not justify trebling or quadrupling the price...
...production. The evidence now available suggests that oil companies are not reinvesting their money in oil. They have seen the future, and it is not petroleum. The oil companies are buying up as many other energy sources as they can find, such as coal fields and uranium mines. Decontrol will give them the resources to control our energy future--a happy prospect. And much of the huge 1973-74 oil profits went into unrelated industries. For example, Atlantic Richfield bought The London Observer and Mobil paid cash for Montgomery Ward...