GEORGE HORWICH,     Department of Economics, Krannert Graduate School of Management, Purdue University, West Lafayette, IN 47907, U.S.A.

(Received 15 September 1982)

The following papers are the edited proceedings of the Workshop on Energy Use in Transportation Contingency Planning held at Purdue University 28–30 March, 1982. The workshop was co-sponsored by Purdue’s Center for Public Policy and Public Administration, the Institute for Interdisciplinary Engineering Studies, and the Krannert Graduate School of Management.† Professors George Horwich (KGSM), F. T. Sparrow (IIES), and Robert K. Whitford (CPPPA) were the conveners.

1 PURPOSES OF THE WORKSHOP

The workshop had three major goals: (i) to discuss and evaluate the past decade of experience in planning for energy and transportation contingencies, (ii) to assess the current state of knowledge and preparedness in disaster and emergency planning generally, and (iii) to develop a research agenda for future work in the area of energy and transportation contingency planning. Much of the discussion on energy was concerned with oil, where the major energy disruptions of the past decade have occurred. Since almost half of U.S. oil consumption is by the transportation sector, 95% of which operates on oil, the oil/transportation interface was a natural focus for the discussion of energy disruptions. At the same time, the workshop broadened its scope by looking at a wide range of disturbances to transportation and at the current state of contingency planning for a variety of natural and man-made disasters.

The central proposition examined by the workshop—indeed, its null hypothesis—is that decentralized market processes are capable of providing a major, efficient response to disruptions in energy, transportation, and many other areas, as well. In this view, the role of government in emergency response is to coordinate, not manage; to complement, not countervene market activity; and generally to avoid command and control intervention into the private sector, a generally inefficient approach to contingencies. The recent deregulation of U.S. energy (particularly oil) markets and the growing deregulation of transportation were cited by the conveners as evidence that a fresh look at the emergency role of government, relative to market and other less formal decentralized responses to disruptions, would be timely.

2 KEYNOTE: SENATOR BILL BRADLEY

This basic theme was addressed by the workshop keynoter, Senator Bill Bradley of New Jersey. Bradley, a member of the Senate’s Energy Committee, and Senator Charles Percy of Illinois, had co-sponsored legislation calling for the avoidance of price controls and mandatory allocations, the use of the Strategic Petroleum Reserve, and the recycling of oil-profits tax revenues to low-income families during oil supply interruptions. At the time of the workshop, the Senate had voted down the Bradley–Percy bill and passed an alternative measure sponsored by Senator James McClure of Montana which essentially restored, on a standby basis, the 1970s’ oil regulation. The McClure bill, however, was vetoed by President Reagan and the veto was sustained by the senate several days before the opening of the workshop. The nation then, as now, was without any formal or specific plan for a national public presence in any future energy disruption.

In his keynote speech, Bradley recounted the failures of energy regulations during the embargo period and throughout the 1970s. The price ceilings on crude oil and petroleum products discouraged domestic production and encouraged consumption and imports of oil. The ceilings were a disincentive to pre-crisis stockpiling and an incentive to hoarding during disruption periods. The ceilings created shortages and, together with mandatory allocations, prevented oil from finding its most valued uses. In return for this widespread loss of efficiency, the controls failed to achieve any meaningful gains in equity.

Bradley extrapolated his approach to energy contingency planning by raising seriously the question of how great a role a free market in transportation can play in response to energy and other disruptions. Market forces are playing an increasing role in areas of transportation previously subject to national or state and local regulations. The gradual process of deregulation has taken the form of greater freedom to enter and leave the industry, set rates, and determine routes. As deregulation in transportation proceeds and new modes of delivering transportation services develop, we can expect more and more spontaneous, self-organizing behavior in transportation, both by its producers and consumers. These trends are relevant to contingency planning by government at all levels.

In the two days that followed, a broad spectrum of representatives from government, industry, and academia presented and listened to papers on these subjects and engaged in lively commentary and discussion on all the issues raised.

3 OVERVIEW

The opening session was an overview, with presentations by Carmen Difiglio, an economist with the Department of Energy, who reported on a similar conference conducted two years earlier by the Transportation Research Board (TRB) of the National Academy of Sciences; George Hilton, professor of economics and a transportation specialist at the University of California, Los Angeles; and Milton Pikarsky, a former chairman of the Chicago Transit Authority, now director of transportation research at the Illinois Institute of Technology Research Institute, whose paper was co-authored with Christine Johnson of the American Public Works Association.

The 1980 TRB conference, as summarized by Difiglio, voiced general disenchantment with the oil controls and allocations of the 1970s; saw little promise of flexible response in urban public transportation or in intercity rail and air transportation during a disruption; urged relaxation of regulations to spur possible substitute means of travel in an emergency; and concluded that government should yield to private-sector responses to energy shortfalls before intervening and then should limit its involvement to providing financial and technical assistance to state and local governments.

Hilton saw little public-goods justification for government contingency planning in energy or transportation, except for the fact that expectations of government regulatory intervention are likely to inhibit private sector preparations. On the basis of government’s previous involvement in energy markets and transportation, Hilton expressed skepticism that government could play a positive planning role in either sector. He characterized government’s general involvement in transportation as more likely to be directed to cartelization of the industry, to investment in new capital rather than the use of existing capital through the price mechanism, and to the slowing down of both phasing-out activity and the introduction of new technology. In the likely scenario of a future limited war, he argued that planes and trucks would be available in the private sector; and ships, as well, if government succeeds in introducing some competition into the protected maritime industry.

Pikarsky described the general transformation occurring in transportation, involving the decline of the public sector and the emergence of market forces entailing new methods of financing, managing, and delivering transportation services. Employers, employees, and third parties are experimenting with new systems involving buses, car pools, van pools, commuter clubs, jitneys, auto rental and charter arrangements, vehicle subscription services, and cooperatives centered around homes, neighborhoods, and places of work. Government, in Pikarsky’s view, can contribute best to transportation contingency planning by removing regulatory barriers to these developments; the new institutions will not only be better adapted to the changing economic environment, but more resilient to external disturbances.

4 GOVERNMENT MANAGEMENT OF ENERGY-RELATED AND OTHER TRANSPORTATION DISRUPTIONS

The next group of papers treated the specific role of government in energy-related and other transportation disruptions. The first two provided the perspective of the states. David Hartgen, director of Transportation Statistics and Analysis for the New York State Department of Transportation, reviewed the energy disruptions of 1973 and 1979. He interpreted his data as indicating that most of the resulting reduction in energy use is explained by private and personal actions involving vehicle use and ownership; very little is due to increased transit use or carpooling. He argued that government contingency plans for state and local governments have been generally irrelevant to consumer responses and, as currently drawn up, are incapable of providing significant assistance.

A completely different point of view was expressed by Kent Smith, deputy director of the California Energy Commission. Smith saw the oil shortages of 1979 as resulting from inadequate private and public planning for energy emergencies. Moreover, little has been done, in his view, to reduce our vulnerability to future disruptions, whose likelihood of occurrence remains high. Among planning initiatives recommended by Smith were the...