International and Domestic Energy Policy Implications for Illinois. Harvey Drucker, Argonne National Laboratory, Argonne, Illinois 60439

Energy policy has reemerged as an important issue after many years of dormancy. Recent events have refocused attention on the role and importance of energy in the national, regional, and local economy. In the international arena, two major issues dominate: oil prices and climate change negotiations. On the domestic front, the California energy crisis; extreme volatility in gasoline, natural gas, and electricity prices; and the Bush Administration's energy program have been primary focal points of discussion. The implications for Illinois of each of these issues are discussed.

International oil prices have risen as oil-producing countries have managed to maintain discipline on production quotas. The significant increases in crude oil prices since 1999 has been seen in Illinois in the form of increased gasoline prices, increased aviation fuel costs, and increased diesel fuel costs.

International negotiations on climate change have been carried on despite announced U.S. withdrawals from active participation in the Kyoto Protocol. Energy production is a major source of greenhouse gas emissions that contribute to global climate change. Any U.S. posture on climate change will have significant implications for the energy industry, nationally and in Illinois.

The California energy crisis has caused a great deal of concern about the capacity and reliability of the electric power system. Concern about the effects of electricity deregulation on prices and reliability have caused a number of states to reinvestigate their deregulation plans. Illinois is scheduled to complete its transition to deregulation in 2005. Many issues remain to be resolved.

Highly volatile prices for energy - gasoline, natural gas, and electricity - have caused a great deal of concern on the part of the public and political leaders. Illinois has seen wide price fluctuations, particularly for gasoline and natural gas. Although many causes for this volatility have been postulated, there is no single answer.

The Bush Administration issued a National Energy Policy in May 2001 designed to address the renewed national interest in energy. It contains many provisions relating to energy conservation, expansion of the energy infrastructure, increasing energy supplies, environmental protection, energy security, and research. As parts of the program are debated and adopted into law, there will be considerable consequences for Illinois consumers and energy industries.

Back to the Energy Conference