University of California Energy Institute

In every energy crisis the U.S. has faced—beginning with the first crisis in 1973—we have seen a common sequence of events, which has been labelled the “energy crisis cycle” (Smith 2002). The steps in the cycle are: (1) When the demand for energy exceeded the supply, energy prices rose sharply — starting the energy crisis cycle. (2) Along with increases in energy prices came large increases in the profits of energy producers. (3) Politicians and interest group advocates criticized the energy industry for their greed in profiting at other people’s misfortune, and charged them with manipulating prices to increase profits. Some critics even claimed that the energy industry fabricated the energy crisis to increase profits. (4) Most of the public believed the industry critics. They did not accept claims that the energy crisis was real, and so they felt justified in demanding that the government fix the problem without any cost to the public. (5) In response to public demands, some politicians sought to protect the public from high prices with price controls or subsidies—steps that worsened the crisis because they encouraged energy consumption in a time of shortages. In our paper, we investigate the causes of distrust in the oil industry during the 2000-2002 period of high gasoline prices. To do so, we use a public opinion survey of Californians, which included a battery of questions about trust in the oil industry, in government officials regulating the oil industry, and in environmental groups, as well as a specific question asking whether respondents believed that the oil industry was manipulating prices to increase profits. We model trust as a function of basic values (party identification, ideology, egalitarianism, individualism,) and political awareness, using the approach mapped out by John Zaller in The Nature and Origins of Mass Opinion. Although we cannot investigate the dynamic way in which distrust builds over time as energy prices rise, we can explore the sorts of people who accept competing explanations for the energy crisis.