State Energy Conditions and Policy Development

Abstract

By design and default, responsibility for many elements of energy policy in the U.S. is shifting from the federal level to the states and private sector. Actions taken by design center around New Federalism proposals which promise to turn over to the states powers and prerogatives usurped by the federal government over the past 20 years. Default refers to the Reagan administration's efforts to reduce government involvement at all levels in energy policy and regulation by eliminating many federal energy programs, decreasing federal regulatory authority, and reducing energy appropriations.' Federal budget deficits of unprecedented size, the executive branch's continuing opposition to non-nuclear energy programs, and the widespread recognition that the states are entitled to greater control over their affairs, all suggest a continuation of the federal withdrawal from energy policy leadership. While much has been written regarding the perils of the reduced federal activity, there is one distinct advantage: it encourages the development of more regionally and state specific energy policies. These are needed because energy conditions vary tremendously among the 50 states as a result of differences in climate, social history, economic activity, fossil fuel endowment, and other factors. While exceptions exist, the federal initiatives and monies of the 1970s resulted in generally uniform energy policies in these varied situations. In contrast, enhanced state responsibility encourages each state to direct legislation and resources at its most serious energy problems and most promising conservation and supply options. The decentralized approach has the potential to produce more cost-effective, more productive, and, thus, more widely supported energy programs. These advantages have been central to the states' repeated requests for greater administrative flexibility and regional sensitivity in past federal energy programs.' Pursuit of these new opportunities will likely yield greater state and national benefits than stubbornly questing after an increasingly implausible Comprehensive National Energy Plan. The objectives of this paper are to highlight variations in state energy conditions, to discuss the states' past record of developing policies that reflect their relative energy conditions, and to identify actions that will encourage the development of programs more attuned to state conditions.