Industrial conversion costs from oil and gas to alternative fuels
From a national standpoint, many questions can be raised on conversion -- whether mandatory or through taxation. 1) Why is it necessary to intervene in the market since price increases will act to allocate available fuels. The desire to reduce dependence on imported oil and gas may be an overriding constraint -- an unproven proposition; some believe that price increases would not have a significant positive impact on output -- a position without a great deal of economic or geological foundation; and the President, for obvious reasons, did not want to force households into conversion nor did he want to propose deregulation which, in the short run, may increase prices directly to consumers but it would be politically more palatable to pass on energy price increase through industry; though astute politically, the economic merit of such a decision is very questionable. 2) Is the cutback of oil and gas consumption being targeted into the least critical area of national need, namely industry. 3) From the national perspective, is conversion desirable as compared to continued dependence on foreign oil for existing plants, with non-petroleum fuel sources for new plants and new residential dwellings. If conversion costs are prohibitive, then it may be ruled out. If conversion costs are low but the real cost of using coal or electricity far exceeds the economic risk of OPEC price increases or embargoes, then again conversion may be ruled out. In short, even if conversion costs are low, it is far from obvious that conversion is desirable. In this paper, the question of conversion cost and its regional implications is examined in detail.
- OSTI ID:
- 6300219
- Report Number(s):
- NP-23736
- Resource Relation:
- Related Information: Working paper 78-8
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
POLICY AND ECONOMY
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
FUEL SUBSTITUTION
ECONOMIC ANALYSIS
REGIONAL ANALYSIS
INDUSTRIAL PLANTS
COAL
DECISION MAKING
ECONOMICS
ENERGY CONSERVATION
FINANCIAL INCENTIVES
INDUSTRY
NATIONAL ENERGY PLAN
NATURAL GAS
PETROLEUM
TAXES
CARBONACEOUS MATERIALS
ENERGY POLICY
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
GOVERNMENT POLICIES
293000* - Energy Planning & Policy- Policy
Legislation
& Regulation
294000 - Energy Planning & Policy- Fossil Fuels
320301 - Energy Conservation
Consumption
& Utilization- Industrial & Agricultural Processes- Energy Sources