In 1974, in response to the OPEC oil crisis, Energy Probe argued that the western countries should allow oil prices to rise to market levels (then called “world oil prices”) as a means to eliminate shortages. This policy, opposed at the time by governments, by consumer groups, and by the energy industry itself, was later adopted by governments, leading to stabilized markets and an end to the energy crisis. Western economies now wring far more value from the oil they consume.
Today, energy conservation remains the most cost-efficient and environmentally benign energy option, not just in oil but also in electricity and natural gas. The best way to induce conservation, Energy Probe argues, is by removing the direct and indirect subsidies that promote energy consumption. Free roads and subsidies to automobiles and public transit lead to overuse of vehicular traffic, for example, while subsidies to agriculture, mining, forestry and energy, among other resource industries, lead to an oversized, overly energy-intensive resource sector.