Price: an imperative signal
The author's concern over price controls relates to specific problems facing the oil industry. The dangers of price controls are translated into terms that are understood by using the farmer's woods and the woodlot as a parallel. The farmer can invest in some equipment and get a load of saw timber to market or he can sell the wood as fuel for fireplaces, etc. At this time, the wood as fuel would bring a greater price than for timber. But the picture changes if the government should step in and set a price (control) on that wood, usually at a greatly reduced price. The countries with the large oil reserves were not able to develop the oil industry, so companies with the equipment came in. The owners of the oil and the investors were doing all right at a cheap price for oil. Then, in October 1973, the Arab oil producers began taking a new look at their prices, and imposed production cutbacks and higher prices. Controls on domestic oil production has caused production to be reduced; oil has been so cheap coal mining has not gone forward. Heydinger concludes that people are literally buying their energy supplies on credit. If we let domestic oil production continue to slide downhill, if we don't develop other energy sources, and don't take every reasonable step to conserve and eliminate the least essential uses, we are going to be increasingly dependent on overseas oil. Higher prices would check consumption and encourage the development of other resources. (MCW)
- OSTI ID:
- 6198479
- Journal Information:
- Marathon World; (United States), Vol. 13:2
- Country of Publication:
- United States
- Language:
- English
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02 PETROLEUM
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