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U.S. Department of Energy
Office of Scientific and Technical Information

Impact of alternative policies to reduce oil imports

Book ·
OSTI ID:7119228
Three alternative methods that might be chosen to reduce oil imports are examined, using the long-run DRI inter-industry energy model developed by Edward A. Hudson and Dale W. Jorgenson. These alternatives (A1, A2, A3) are compared with a ''current policy'' case. All cases assume a ''pessimistic'' price of $11.00 per barrel for imported oil, in 1974 dollars, for all years to 1985. Under A1 the price controls on ''old oil'' are removed. The average cost of crude to refiners rises to reflect this change, and the price of refined products also increases. Under A2 the quantity of oil under price controls is decreased at a straight-line rate of 12 1/2 percent a year so that the average cost of crude to refiners and the prices of refined products are higher than under the current policy case, but lower than under A1. In addition, the price of gasoline is increased by a per-gallon tax. Under A3 an import ''fee'' (equivalent to a tariff) of $2.00 a barrel is imposed on all oil imports, starting immediately and the price of old oil is decontrolled. The ''current policy'' case is a ''no change'' policy. The price of ''old oil'' continues at its present level in current dollars with the quantity of old oil declining at an estimated rate of ten percent per year. The price of imported petroleum is $11.00 in constant 1974 dollars. However, the price of refined products reflects an average cost of crude to refiners of below eleven dollars, since a large quantity of domestic production is at the controlled price. (MCW)
OSTI ID:
7119228
Country of Publication:
United States
Language:
English