U.S. Energy Policy and the Pursuit of Failure.

• Author: Giberson, Michael

U.S. Energy Policy and the Pursuit of Failure, by PETER Z. GROSSMAN (Cambridge University Press, 2013) 416 pages, ISBN 9780521182188 paperback.

For forty years U.S. energy policy has been viewed through a framework first constructed in the early 1970s. Indeed, before the 1970s scarcely any thought had been given to the idea of a singular and cohesive national energy policy. We may have been better off without the idea. In the name of a national energy policy, as Peter Grossman details in his book, we have been subjected to four decades of political hubris on energy topics, often followed by wasted spending and ineffectual regulation.

The common view of the energy crisis of 1973, promoted by politicians in the 1970s and enshrined now in high school history books, positions the United States as victim of an injurious oil embargo enforced by the Organization of Arab Petroleum Exporting Countries. Grossman gets the history right. The embargo may have required some shifts in import sources, but the decades-old trend of increasing oil imports continued with the merest of pauses. The crisis was created by U.S. policies, not by an international oil cartel.

The sharply higher international price of oil in the early 1970s did require adjustments, but the crisis arose because useful adjustments were frustrated by Nixon's oil and gas price controls and limits on interstate movements of oil due to the Mandatory Oil Import Quota program. What would likely have been a costly but relatively brief period of adjustment was instead a period of shortages, gasoline lines, and desperate searches for political solutions. This search for political solutions yielded President Nixon's "Project Independence," announced a few weeks after the OA-PEC embargo began, which made energy independence the centerpiece of U.S. national energy policy. As is often noted, every President since Nixon has paid homage to the idea of energy independence.

Grossman's first chapter, "Crisis," describes the political floundering in response to energy issues. But Grossman only reluctantly employs the phrase "energy crisis," claiming the term lacks sufficient substance to be analytically useful. A section termed "Energy Crisis Economics" interjects a discussion of basic supply and demand analysis and connects the discussion to the policy narrative. It is in this mixing of policy narrative with basic economic analysis that sets Grossman's book apart from similar energy policy books.

Grossman...