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T HE effects of GNP growth and changing fuel prices on the industrial demand for energy depend on the substitutability of energy and other factors of production and on the substitutability of fuels within the energy aggregate. The role of energy in the structure of production has been the focus of a number of recent studies, but the evidence on factor and fuel substitutability is mixed. Berndt and Wood (1975), Hudson and Jorgenson (1974), Fuss (1977), and Magnus (1979) all worked with data for a single country, and found energy and labor to be substitutes, but energy and capital to be complements. Griffin and Gregory (1976), using cross-section data at five-year intervals for nine countries to capture long-run effects, found energy and capital to be substitutes. Fuss (1977) found for Canada moderate substitutability among coal, gas and oil, but almost none between these fuels and electricity, while Halvorsen (1976 …