Regulation of the oil market has played a major role in the substance's history.
Policies affect the market in several ways, such as price, production, consumption, supply and demand. The oil market has had a history of booms and troughs, which have caused producers to demand government intervention. Usually, this government involvement only made the situation worse. One example of government intervention of petroleum deposits on Native land is the Osage Oil Crisis. In the late 1800's on the Osage reservation, oil deposits were found. The Bureau of Indian Affairs negotiated to give drilling rights to oilmen as a promise that Osage citizens who lived on deposits would receive ten percent of the royalties from the oil. When the Osage negotiated to keep their headrights to the oil, Congress required that they pass a competency test to prove they could handle the funds. If they were not deemed competent, they were provided U.S. citizens as "guardians". Many Osage were people conned out of their contract by dishonest lawyers and businessmen. Many more Osage were murdered by their guardians. Eventually, over sixty Osage died as a result of oil prospectors working alongside the U.S. government to gain headrights to Osage oil claims. Furthermore, many of the regulations were quickly ruled illegal and removed. Prior to
World War II, many of the issues within the oil market had to do to with changing prices. During the 1920s, oil prices were beginning peaking fears of oil depletion. In response to these fears, during
Coolidge's administration,
U.S. Congress enacted a
depletion allowance to producers which led to a surge of investment in the oil business and the discovery of many new, large oil reservoirs. The next decade featured falling prices caused by the new
investment and
overproduction. The declining prices allowed producers to demand a
price support system. For example, the way prices were propped up was a pro-
rationing order made by the
Railroad Commission of Texas, which restricted oil production and increased price. This order was soon ruled illegal by federal district court in 1931. The 1930s marked the beginning of large federal intervention in the oil industry and began by creating the
National Industrial Recovery Act in 1933, which allowed for natural price competition, instead of agreements between the major producers. However, this act was ruled
unconstitutional a year later. While the time before
World War II was filled with issues regarding price, the post-war era had increasing oil imports partly due to the
price support established between the 1920s and '30s. The artificially high domestic prices caused a surge of imports from lower priced foreign producers. In 1955, a clause was added to the
Reciprocal Trade Act Amendments, which gave the president the power to limit imports of a specific
commodity, if that particular
commodity was harmful to the nation's security. This clause allowed President
Eisenhower to enact oil import quotas in 1959, which ultimately allowed international oil prices to decline. These
import quotas restricted international oil companies from the US market, and allowed them to form the
OPEC. During the 1970s, President
Nixon put many phases of price controls into place. After many new
regulations altering the original
price control system, President
Carter eventually began removing these controls in 1979. During his
administration, in response to an energy crisis and hostile Iranian and Soviet Union relations, President Carter announced the
Carter Doctrine, which declared that any interference with the nation's interests in the
Persian Gulf would be considered an attack on its vital interests.
Ronald Reagan later expanded this doctrine. Since the 1990s, the oil market has been free of most regulations. President Biden and Vice President Harris ran on an environmental platform. The Biden Administration worked to reverse again some previous policies that did not fit their agenda. The goals that President Biden promised consisted of targeting fossil fuels and creating more clean energy sources. This was done through policies such as the Inflation Reduction Act which aimed to tax fossil fuels, petroleum, and reduce and better track emissions from energy production. However, the Biden Administration also made advances in nonrenewable sources that countered their platform. For example, they approved three-fifths of drilling platforms for the Willow Project and ended up approving more oil drilling permits than the Trump Administration did. The platform that they ran on was one to help win over young and environmental voters. The Trump Administration has plans to accelerate petroleum production. The Administration plans drill for oil on Federal land such as the Arctic National Wildlife Refuge. The Administration withdrew again from the Paris Agreement and declared a national energy. The administration's future projects regarding petroleum include reinstating the previously cancelled Keystone XL pipeline. The past and present Trump-Administration's fossil fuel plans are critical of climate science and climate change policies. According to David Gelles from the New York Times, many administrations that assist in slowing climate change or its consequences such as FEMA, the EPA, and NOAA have lost funding and their administrations replaced by other climate deniers. The loss of data and research regarding climate change in the United States has isolated the United States from the rest of the world due to the lack of efforts the country is now taking when it comes to Climate Change. ==History==