OIL AND GAS IN THE POLITICAL ENVIRONMENT: UNAVOIDABLE PARADOX?

Examining policy instability is a recent development in public policy studies. The events in 20th century oil and gas exploration and development exhibit both conditions of policy monopoly that produced predictable policy decisions and the rapid transitional phase marked by unexpected policy changes. Petroleum exploration and production take place in a public policy arena that illustrates the boundary conditions where policy change occurs. From Spindletop in 1901 through the long and on-going debate over opening the Arctic National Wildlife Refuge (ANWR), oil and gas exploration and production has occurred in a multidimensional policy space. Public policy began with government subsidy of the new energy source, followed by a period of increasing privilege in tax codes and assisting the transportation sector transition to oil. Finally a government position antithetical to the oil industry emerged as environmental protection policy displaced oil production as a national priority. Policy phase boundaries occur when responses to issues become unpredictable to all parties (businesses, governments, and citizens). Multiple possible phase boundaries have existed as policy moved between monopoly conditions and paradox: the heyday of the oil depletion allowance when it was said that “Oil doesn't have any enemies on Capital Hill” in the 1960s, the Santa Barbara oil spill (1969), the Arab Oil Embargo of 1973-74, building the Alaska Pipeline from 1975-77, and the Exxon Valdez accident in 1989. Gasoline consumption and wholesale petroleum prices are at record highs, while public opinion polls show the American public nearly evenly divided on whether to allow oil and gas exploration in ANWR. Americans paradoxically want to consume petroleum products while being unconcerned by the possible ill effects that exploration and production might have for either the environment or foreign policy. This paradox is an indicator of a phase transition, as we move from the predictable status quo to policy conditions that foster policy innovation.