Lanterna Rally

Author: Charles E. Phelps

Publisher:

Published: 1977

Total Pages: 110

ISBN-13:

This report had its beginning in a brief investigation in September 1975 of the potential effects of decontrol of the oil industry. The controls originated in the Phase IV price controls, were modified by the Emergency Petroleum Allocation Act (EPAA) of 1973, and are administered by the Federal Energy Administration (FEA). They legally expired on August 31, 1975, but were retroactively reinstated in September and extended to November 15, and again to December 15, while the Congress and the President sought agreement on the nature of future controls on the petroleum industry. As the national debate grew wider, a more extensive study of the effects of controls was made at Rand, funded through corporate research funds. The resulting report focuses on the 1973 EPAA laws, but modifications are made as appropriate to accommodata the 1976 extension and certain legal changes. As the study expanded, it became apparent that the subject was of considerably larger scope than that of price controls, and indeed extended into production technology, the nature of product demand, and the roles of tariff policy and world trade. In this report the authors attempt a comprehensive analysis of interrelationships between these forces as applied to the petroleum industry. They develop an analytical framework that they believe can be applied to price controls under a wide variety of conditions.