Whatever the actual motivation, American policymakers perceived a need after 1973 to restrict automobile and light truck consumption of gasoline. How The Energy Policy and Conservation Act of 1975 imposed Corporate Average Fuel Economy (CAFE) standards on all auto and light truck manufacturers who sold vehicles in the Unite d States. The weighted average of miles per gallon (MPG) for each manufacturer’s car sales was required to be at least 18 MPG by 1978 and 27.5 MPG by 1985. Manufacturer s that failed to meet this standard were to be fined $50 per vehicle sold for each gallon (of MPG rating) by which they failed. (more…)

There are many possible reasons for suspecting market failure in a product like gasoline. Throughout the world, the exploration, refining, and selling of petroleum products has long been controlled by large firms in oligopolistic or monopolized national markets. The United States is a sufficiently large importer of oil that it could have monopsony power, which would mean that we could increase the welfare of our own citizens by reducing our imports. Moreover, the consumption of petroleum products, especially in motor vehicles, generates many negative external costs, and will begin to examine closely in the next chapter. Where there are negative externalities, a free market will overproduce and over consume. (more…)

Almost all fossil fuels use is by burning them to create energy. Burning process then produces waste products due to impurities in the fuel. There are few particulates as a resides and some gases such as sulfur dioxide, nitrogen oxides, and volatile organic compounds. These waste gases are then become air pollution which are affecting our environment in destructive ways.

There are several types of air pollution: (more…)

In the beginning, human progress was limited by the amount of work in single day. This is only to feed themselves and their families. At that time, the economy was largely rural as a result. In the early of 19th century, more intelligent human began to looking for energy resources to support their lives. They began to develop coal, oil, and other stored energy to supplement their prime energy source: sunlight. Sunlight energy results in overgrown plant and animal growth over huge and dispersed areas and geologic time periods. There was, and will continue to be, abundant solar energy sources available to get more fossil fuel, to do research on how to exploit these resources more efficiently, and to use them in daily life and changing their cultures. (more…)