The history of energy policy reveals the tight relationship between government and industry. Over the course of the last 100 years, government regulation supported an energy industry that developed certain structural characteristics. In turn, regulatory agencies adopted a similar organizational structure. Called the “hard path” by Amory Lovins more than thirty years ago, hard path energy industries were privately owned, corporate, large-scale, capital-intensive, centralized, and regionally, nationally, or internationally operated. The oil, natural gas, coal, nuclear power, and electricity industries each possess those characteristics. Additionally, federal and state regulators mirrored the corporate structure and are highly centralized, operate over large jurisdictional areas, and are departmentalized to mimic the corporate operations of their regulatees.

Energy industries are large-scale. Internationally, nearly 80 percent of the oil produced in the world is produced by fifty state-owned and private oil companies. In recent years, privately owned oil companies have experienced significant mergers, such that five of the remaining super majors are all ranked in the top eleven private corporations in the world.