17 - Industrial Policy and Local Content Rules in US Energy Policy

Summary

The United States (US) has a long history of using local content requirements (LCRs) – laws, regulations, or governmental measures that condition a benefit, often financial support, on the use of a certain percentage of inputs from the local jurisdiction – to promote the development of favored domestic industries. The energy sector, as well as related infrastructure industries, have been no exception. Historically, the US has used LCRs and similar measures to promote the development of fossil fuel industries. More recent interest by policymakers in the US have spurred the use of local content rules tied to pipeline construction, as well as extensive use of LCRs to spur investment in renewable energy. Moreover, LCRs are used at every level of government in the US, from the federal to state and local governments.