Approach to government/industry investment participation in coal-based energy projects. Report No. 1-702

Technical Report · Sat Jan 01 04:00:00 EST 1977

DOI:https://doi.org/10.2172/5137399· OSTI ID:5137399

English, J. M.; Smith, J. L.

A rationale is offered for government/industry participation in coal-based energy projects in a macro-economic sense. It must be recognized that the problem the U.S. faces in shifting from a petroleum-based energy economy to a coal-based energy economy requires a new energy infrastructure. Infrastructure by its very nature requires societal commitment and societal investment to bring it into being. Once the initial infrastructure is established, its continued growth and expansion can be maintained by the private sector, provided there is sufficient lag in the market-price-adjustment mechanism to continue providing an attractive profit potential to the private sector. There is a suitable philosophical framework for devising sharing formulas between government and industry for investment in energy programs. Clearly the private sector would be willing to invest up to the level required for the economy to proceed along the first-cost path, that of continued imports. The difference needed to step up to the switch-over curve, from imports to domestic production, represents the proportion that is necessarily a societal investment. This difference may then be pro-rated to the individual project in some rational way. The most promising rationale is the use of a concept of intersecting portfolios--the ERDA portfolio and the firm's portfolio; both contain the desired project. The methodology, while needing refinement, offers considerable promise as an operational approach for the allocation of resources to energy projects.

• Research Organization: Econergy, Inc., Los Angeles, Calif. (USA)
• OSTI ID: 5137399
• Report Number(s): FE-2517-2
• Country of Publication: United States
• Language: English

Related Subjects

01 COAL, LIGNITE, AND PEAT
010000* -- Coal
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29 ENERGY PLANNING, POLICY, AND ECONOMY
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CARBONACEOUS MATERIALS
COAL
COAL INDUSTRY
COORDINATED RESEARCH PROGRAMS
ECONOMICS
ENERGY
ENERGY SOURCES
FOSSIL FUELS
FUELS
GOVERNMENT POLICIES
INDUSTRY
INVESTMENT
NORTH AMERICA
PRODUCTION
RESEARCH PROGRAMS
USA