The objective of this model study is to show how co t-con clous managers in the petroleum relining electric power and basic chemical industries will re pond to policy decisions limiting or not limiting the discharge of any major water or air pollutant and the availability of petroleum fuel for use in electric power generation. This is accomplished by an integrated model of the above indu tries with economic supply functions for crude oil natural gas and coal and with economic demand functions lor important energy end-products. The re olts of this study how the critical importance of regulating fuel use in electric power eneration to achieve within the United States in 1985 both energy goals of independence at acceptable price and environmental goals of clean air and clean water at minimum co ts. Prohibition of the use of petroleum luel in new electric power generatin plants' practically mandatory according to the model tudies to substitute coal for dean fuels in electriclty generation. This prohibition minimize both the market price for natural gas and the capital investments in new plants and equipment. It maximizes the economic conservation of energy by end product consumers and the attainment of clean water and relatively clean air. Unfortunately, greater sulfur dioxide emission mu t be tolerated, although this may be r-.lduced by 83% if environmental standards with air emis ion controls are met. ational policy in the United State i currently placing increasingly re trictive limitations on di charges of pollutant both to the water and to tbe air. Best Practical and Best Available technology Guideline have been promulgated by the Environmental Protection Agency to curb waste water discharges. The goal of national policy is to eliminate the di charge of pollutants into navigable waters by 1985. Primary and secondary air emis ion control standards have been established by the EPA for ulfur oxide, nitrogen oxides and particulate matter. The primary tandards were to be met by mid-197 5' the econdary tandards are to be implemented within a reasonable time, as pecified by the EPA.In addition to the e increasingly restrictive wa te discharge tandard, incremental co ts of producing further supplies of crude oil and natural ga in the continental United States are ri ing rapidly. tudies of the Federal Energy Administration (FEA) I and the Texa Governor' Energy Advi ory CounciJ 2 show the economic upplie of crude oil and natural gas are extremely insensitive to prices higher than $11 per barrel for crude oil and $0.80 per 1000 cubic feet for natural gas.Manager in industry are responding to these increa ingly restrictive waste discharge tandards and to tbi increasing carcity of petroleum energy by electing alternative method of production and treatment, input mixe f energy, water, capital and raw materials, and output mixe f product and waste di charges.Thi respon e from petroleum refining, electric power and chemical indu trie wiU b top priority in meeting environmental goal of clean air and cI an water and energy goal o...
