Why Public Policy is Weak Medicine for Industrial Energy Costs

Abstract

There is little doubt about the impact of rising energy costs on the
profitability of American industrial activity. Energy consumers, produc-
ers, and government leaders are all compelled to “do something” about
this challenge. As a result, energy issues have been a prominent feature
of federal policy agendas in recent years. However, the policy-making
process draws participants with highly varied perceptions of the causes
of (and solutions for) today’s energy market problems. Finance-minded
business leaders usually anticipate a supply or price-oriented solu-
tion. Engineers support solutions in the form of advanced technology
research and development. Government action emerges in the form of
policies and programs, but whose agenda is reflected in these actions? Is
it practical to expect lawmakers to solve industry’s energy cost control
issues? This article examines these questions. The conclusion is that
policy makers can help, but the true solution to industry’s energy cost
control challenges comes from leadership and accountabilities devel-
oped within industrial facilities themselves.