BPEA | 1973 No. 3

The Allocation of Energy Resources

1973, No. 3

ABUNDANT ENERGY AT LOW COST iS fundamental to a highly industrialized economy like the United States. The American way of life is hard to visualize without commuters, television, overheated houses, aluminum cans, and jet setters; yet it is equally difficult to conceive of substitutes for these hallmarks of American society if cheap energy were no longer available. Given the dependence on energy, there has been perennial anxiety over the adequacy of the nation’s resources for meeting its apparently insatiable appetite for energy. More recently, the concern for adequacy of energy has been embedded in a more general pessimism about the viability of economic growth on a finite world. This new and pessimistic view about economic growth holds that growth is limited by a finite amount of essential, depletable natural resources. In the process of consuming finite resources, the world standard of living descends inexorably toward that of Neanderthal man.