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<br />production of primary and end-use energy commodities. Until recently, <br />however, there has not been a national energy policy which set forth <br />national energy objectives and implementation plans. <br />Around 1970, two situations arose which brought about Congressional <br />and administrative decisions to formulate a comprehensive national energy <br />policy. These two situations were the decreasing availability of natural <br />gas in interstate markets and the nation's continuing dependence on Middle <br />Eastern oil production. The formation and subsequent actions of the <br />Organization of Petroleum Exporting Countries (OPEC) ended the supply of <br />relatively inexpensive petroleum products. The recognition of the potential <br />for economic instability brought about by world petroleum market disruptions <br />in late 1973 and early 1974 stimulated US efforts to develop a national <br />energy policy. Approximately five years later, major elements of a national <br />energy plan were enacted as the National Energy Act. <br />Appendix A shows that about 70 per cent of the major Federal energy <br />statutes have been enacted since the petroleum embargo of 1973. Environ- <br />mental legislation and transportation and safety regulations affecting energy <br />industries have also .increased significantly in the past decade as well. <br /> <br /> <br />2.2 CRUDE PETROLEUM AND PETROLEUM PRODUCTS <br />The supply and prices of petroleum were controlled almost exclusively <br />by th.e few early founders of the oil industry. Production was limited by <br />these producers to support prices during the growth of early markets. <br />Such practices also served to conserve the resource potential of fields as <br />producers attempted to achieve economic efficiency in well operations. <br />During the 1920's and 1930's when large reserves were discovered in <br />Kansas, Oklahoma, and Texas, the number of individual producers increased <br />and production was no longer controlled by a few private interests. The <br />"boom" in oil production resulted in wasteful practices which depleted oil <br />and gas resources without reflecting economic benefits. I n response to <br />this situation, producing states enacted conservation laws prohibiting all <br />wasteful practices, including production in excess of market demand. <br /> <br />2-2 <br />