What Happened to the Energy Crisis? The Dilemma of an Energy Decision Maker in a Dynamic World

Abstract

happened to the energy crisis? Not long ago it was in the headlines almost every day. We wondered, How soon are we going to run out of gas, coal, or especially oil? The other questions, of course, were, How high are prices going to be? How much are we going to pay? Can we afford to pay it? Now the questions seem to be, How low are prices going to fall? are we going to do with all the 'stuff' that's floating around in tankers? are we going to do with all the excess natural gas? All the coal we've got in the ground? Now the interesting question is, happened, how. and why? And that's what I'd like to spend a few minutes on. What we're dealing with is not a set of facts but perceptions-perceptions of the world. What we deal with when we talk about the world. is not the world of facts, but what we believe about the world offacts. It's true enough that the world out there is full of solid objects and things. We believe something about them because in the present we're able to touch and feel and see things and objects. But when we talk about the future. when we talk about the world economy. or when we talk about the Organization of Petroleum Exporting Countries (OPEC), then we have concepts, mental maps if you will, that organize our thinking and our beliefs. Is what we believed about the energy crisis an example of a self-destructing problem? Did we predict the problem and then go out and solve the problem so that it's no longer a problem? That's one possible option. That does happen from time to time. Or did we just get it wrong? That's another possibility. I