8.1 THE ENVIRONMENTAL PROBLEM

Many of the short-term manifestations of the energy problem are related to conflicts between environmental policy and energy policy. Some of these are listed below:

• Over the last several years it was sensible for oil companies to modify their investment plans for developing new oil reserves in the 48 states to take account of prospective supplies from Alaska. Because of environmental disputes there is still no Alaska pipeline—only a program to build one.

• The gasoline shortages of 1973 and 1974 are related in part to lower gasoline efficiency in heavy new-model cars with air-conditioning, automatic transmissions and other power-using extras, plus devices to conform to antipollution regulations.

• Over the last decade investment plans of electric utilities have been made in the light of prospective development of nuclear energy. Because of major technical problems and extended delays in administrative and judicial review of whether nuclear plants are in compliance with environmental requirements, this installation is well behind schedule. Installation of fossil plants has been delayed for analogous environmental issues. Fundamental to all this is the simple fact that energy processes account for about three-quarters of air pollution.

These problems are soluble in the long run. There is nothing inherently impossible in dealing with the problems of eliminating pollution from energy processes; it is simply a matter of allocating sufficient resources to the project. The problem is a management one or, more precisely, an economic one: What procedures should we apply to make the decisions about how much energy to produce and how much and how fast to reduce pollution?