The International Energy Agency's mandatory oil sharing agreement: Tests of efficiency, equity, and practicality: (Final report)
The International Energy Program Agreement, which created the International Energy Agency (IEA) in November 1974, establishes a system for the mandatory sharing of petroleum during severe oil supply disruptions. Development of the agreement was initiated by then Secretary of State Henry Kissinger during the attempted embargo of oil shipments to the US and The Netherlands by the Organization of Arab Petroleum Exporting Countries in 1973. Kissinger feared that the scramble for oil supplies would strain the Western alliance and contribute to a Western European ''tilt'' toward the Arab position in the Mideast. A new framework for international cooperation in the sharing of oil during oil embargoes and other supply disruptions seemed desirable; ensuring everyone their ''fair share'' would help blunt the oil weapon. Twenty-one countries, including the United States, Japan, and all the countries of Western Europe except France, affirmed this view through their membership in the IEA. The mechanism intended to achieve ''fair'' distribution of petroleum during severe disruptions is the Emergency Sharing System (ESS). Our evaluation of the ESS attempts to answer three questions: First, what would be the economic consequences for the US and other IEA members if sharing were to be implemented. Second, how do limitations in information and market control hinder implementation. Third, in light of such impediments, what are likely to be the actual economic consequences of attempted implementation.
- Research Organization:
- Purdue Univ., Lafayette, IN (USA); New Mexico Univ., Albuquerque (USA); Rochester Univ., NY (USA)
- DOE Contract Number:
- FG01-85PE77035
- OSTI ID:
- 6668917
- Report Number(s):
- DOE/PE/77035-T1; ON: DE87006072
- Country of Publication:
- United States
- Language:
- English
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