Crisis Planning for Energy Interruptions

Abstract

The federal government is almost certainly doing contingency
planning in case there is a disruption in the supply of energy due to
terrorism. The likelihood of terrorist interruption of supply is much
greater today than it was a few months ago.
Unfortunately, the government may rely solely on some form of
price controls, either mandatory or by jawboning.
The Administration should publicly inform all the parties that the
government will not intervene in case of high (or low) energy prices. This
would eliminate government uncertainty. Companies, by assuming that
the government will intervene on their behalf, are liable to postpone
protective actions. That’s human nature