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and early 1980's, the Federal Government adopted specific
programs to aid research and development of EOR technology. Id.
at 135-136. In holding that the taxpayers in the Krause case
were not liable for the negligence-related additions to tax, this
Court noted that one of the government's expert witnesses
acknowledged that "investors may have been significantly and
reasonably influenced by the energy price hysteria that existed
in the late 1970's and early 1980's to invest in EOR technology."
Id. at 177. In the present case, however, one of respondent's
experts, Grossman, noted that the price of plastics materials is
not directly proportional to the price of oil, that less than 10
percent of crude oil is utilized for making plastics materials,
and that studies have shown that "a 300% increase in crude oil
prices results in only a 30 to 40% increase in the cost of
plastic products." While EOR was, according to our Krause
opinion, in the forefront of national policy and the media during
the late 1970's and early 1980's, there is no showing in these
records that the so-called energy crisis would provide a
reasonable basis for petitioner's investing in recycling of
polyethylene.
Moreover, the taxpayers in the Krause opinion were
experienced in or investigated the oil industry and EOR
technology specifically. One of the taxpayers in the Krause case
undertook significant investigation of the proposed investment
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