The economics of energy conservation policies: A study of US primary copper production

US oil and gas price regulation has made energy-saving investments less attractive than they otherwise might have been. The question thus arises: at what energy prices will conservation be attractive? This microeconomic study aims at answering this question for US primary copper firms. The costs and benefits of three major potential energy conserving processes are estimated. A profit-maximizing computer model is then used to simulate the behaviour of three leading US copper producers and their rates of adoption of the conservation measures. The costs associated with energy savings are calculated and the energy price changes necessary for the adoption of the measures are considered. It is concluded that, assuming 1974 prices for non-energy factors, energy prices need to be 110% greater than 1974 levels before energy-saving investment becomes attractive.