Socioeconomic and Institutional Constraints to Energy Development

Abstract

The fundamental economic and institutional constraints to energy development reside in the obstacles to siting large mining and conversion facilities. These obstacles are of three varieties:(1) industry risks; (2) the problems of satisfying federal planning procedures and environmental impact standards; and (3) the inadequacies of the socioeconomic environments supporting the industry. Industry risks have been widely discussed (see Henry et al., 1973) as have the problems of satisfying environmental standards and planning procedures (Federal Energy Administration, Office of Finance and Energy, 1977). This paper summarizes the limitations on energy production and utilization flowing from the siting of new facilities in inadequate socioeconomic settings. In the first part, the effects of siting new energy facilities in areas having limited assimilative capacities are described in detail. These effects are shown to be part of a self-perpetuating cycle of social, economic, and institutional morbidity that both imposes burdensome public costs on the host community and greatly diminishes productivity