Issues of Pollution in the Oil Industry

Understanding how and why pollution is at issue in the modern period requires first understanding the structure of the oil industry. The producers of oil at every stage of its movement through the marketplace, from the driller-explorers to the shippers to the refiners, are relatively few in number. They are interdependent inasmuch as they are rivals reacting to one another, but not necessarily to the consuming market. To the extent that rival companies have a virtually identical product--in the case of the oil industry, crude oil, gasoline or ancillary products--a high cross-elasticity of demand may be inferred; price to consumers at any level of distribution is the only differentiating factor.

The level of response to the changes in the market occurs among companies or between companies as a group and governmental regulatory or legislative bodies, not between consumers and companies. Issues of energy availability, generation, cost, and use of natural resources have been a persistent feature of discussion in the United States since the early 1970s, when the Organization of Oil

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ng pollution emphasized the need to protect commercial interests in some form. In 1991, the EPA offered industrial polluters an extension on compliance with the Clean Air Act if they could show they had made major cuts in toxic-chemical carcinogenic emissions: The proposal is designed to begin action against some of the most dangerous air pollutants while federal environmental officials continue the complex and lengthy task of writing the standards and regulations that eventually will set mandatory timetables for abating emissions of 189 different chemicals (Abramson, 1991, p. A16). In other words, in order to achieve the ultimate goal of compliance, smaller objectives were offered to polluters by the government in the interim. This was consistent with the many voluntary provisions included in the Clean Air Act regulations in the early phases of implementation. By 1992, this strategy had been amplified in the Clean Air Act to create a futures market in pollution credits: Under the law, polluters will be issued allotments based on their current needs and the EPA's goal of greatly reducing air pollution in two steps, with rules that tighten in 1995 and again in 2000. Utilities will learn from the EPA by 1993 how many one-ton-a-ye
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Approximate Word count = 5817
Approximate Pages = 23 (250 words per page)

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