bluuebunny/crossref_metadata_2025 huggingface dataset:
Energy - The Challenges and Opportunities Before the Developing Countries*
Authors: Jha Prem Shankar
Published: May 2011

We are meeting here at a time when oil prices have not only become soft, but unstable. OPEC's control over the market has been decisively broken by a combination of rising non-OPEC supply and flat demand, which is itself a fruit of the bursts of technological innovation that followed the first and second oil shocks. Many people throughout the world who should know better are quietly rejoicing at the change. They opposed OPEC in principle because cartelization and price fixing are gross interventions in the operation of the free market. I can understand this view and sympathize with it. But I fear that, today, the countervailing power that was used to break OPEC may be exercised so crudely that prices will be driven down with a blind disregard for the future--specifically for the fact that oil is a part of nature's capital stock, and not its annual output.
Research Reports The Demand for Natural Gas: A Survey of Price and Income Elasticities
Authors: Al-Sahlawi Mohammed A.
Published: May 2011

My purpose has been to survey and review price and income elasticities of the demand for natural gas. The surveyed studies are classified by demand type, where the functional forms, estimation techniques, data types, estimated periods and concerned countries or regions are indicated. Studies have demonstrated that there is variation in price and income elasticity estimates. These discrepancies are due to differing estimated periods, various data sources, structural changes, geographical differentials, and the distinction between different demand types. In the short run, it appears that industrial demand and residential- commercial demand are inelastic with respect to price and income. Industrial demand is more responsive to income than residential-comercial demand in the short run as well as in the long run. This might be caused by the differences between natural gas end uses.
Gasoline, Diesel and Motorfuel Demand in Taiwan
Authors: Carbacz Christopher
Published: May 2011

The logarithmic flow models generate elasticity estimates for prices that generally exceed estimates of recent studies both for the short run and the long run. This holds true over gasoline, diesel, and total motorfuel models. The linear gasoline results for price elasticity are in the range of previous estimates. In the logarithmic stock-flow models, estimates of gasoline price elasticity exceed both short- and long-run estimates of previous studies. The liner stock-flow model generates a price elasticity that is no different than zero (statistically) and an income elasticity that appears to be large in the short-run.
The NERO Fan in Retrospect and Lessons for the Future
Authors: Nelson Charles R. , Peck Stephen C. , Uhler Robert G.
Published: May 2011

Projections of the future demand for electricity published annually since 1974 by the North American Electric Reliability Council (NERC) have proved in retrospect to have been too high and the projected growth rate has been revised downward each year. Should forecasters have been able to do a better job of predicting the slowdown in electricity growth which has occurred since the early 1970s? The authors have attempted to provide partial answers to this question by comparing the published NERC projections with benchmark forecasts provided by simple models representing well-established techniques. The authors also discuss how modelers and planners can cope with uncertainty by using the techniques of decision analysis.
Modeling Energy Demand and Socioeconomic Development Of Taiwan
Authors: Tzeng Gwo-Hshiung
Published: May 2011

Taiwan lacks a natural energy endowment. Its energy demands have dramatically increased with the growth of the economy and standard of living during the past two decades. Based on the new socioeconomic development policy for the next two decades, the government of Taiwan has devoted special attention and effort to improving various social and environmental problems affecting the country’s overall quality of life. The increasing rate of household energy demand will slow down as the market for electrical appliances reaches a saturation point and as the energy efficiency of appliances is improved. Transportation policies call for energy conservation during the next two decades by raising energy use efficiency. The industrial sector has also implemented energy conservation measures by raising energy efficiency and by diagnosing and improving energy-use.

Based on these concepts and by developing a new set of assumptions, several translog models are calibrated for forecasting energy demand and socioeconomic development in the next two decades.
On Regulation, Deregulation, and Economics
Authors: Megdal Sharon B.
Published: May 2011

This article considers some key elements of the current debates on utility deregulation and industry restructuring. Its purpose is to bridge the gap between economic theory and actual regulatory policymaking. The author explains that the emphasis of regulatory debates has, in large part, shifted from rather routine cases to matters that fundamentally affect market structure. Jurisdictional issues, difficulties associated with determining how to relax regulation of an industry that still has monopoly elements, and problems with the process itself are addressed. The author concludes that important and necessary policy debates would benefit from more substantive dialogue among all involved.
Failure in the Oil Patch: An Examination of the Production and Oil Field Services Industries
Authors: Platt Harlan D. , Platt Marjorie A.
Published: May 2011

A substantial share of domestic energy supplies is produced by the oil and gas production industry. The oil field services industry provides valuable assistance to these exploration and production companies. The failure rates in both industries have increased recently. Failure rates in the two industries were modeled as a function of general economic conditions, industry financial conditions, and, in the case of the service industry, the failure rate in the production industry. The failure rate in the production industry was most sensitive to general economic conditions; while changes in the rate of drilling success led to the largest percentage change in the failure rate in the oil field services industry. The oil field service industry’s failure rate was also significantly related to the failure rate in the production industry, thus indicating a spillover effect. Policymakers and lending institutions that finance and regulate these vital energy supply industries may benefit from the empirical results.
Markets for Natural Gas in Developing Countries
Authors: Hurst Christopher
Published: May 2011

In this paper I look at some major domestic markets for natural gas in developing countries and the conditions that must be met for a gas project to be realized. The residential and commercial sectors are not favorable unless a demand exists for space heating in the winter and this will apply to relatively few cities in the third world. The prime candidates are electric power stations, where gas is most suitable for combined cycle (in shoulder or base loads) or steam turbines (for base loads). A wider role for gas in electricity generation depends upon a shift away from hydropower or coal.
Alternate Energy Strategies for the Developing World’s Domestic Use: A Case Study of Nigerian Households’ Fuel Use Patterns and Preferences
Authors: Onyebuchi Edward I.
Published: May 2011

Through case studies in rural and urban settings within Nigeria, this paper examines the degree to which qualities associated with commonly proposed new energy supply technologies for developing countries satisfy the needs and preferences of Nigerian households. The paper demonstrates that the often cited, and unquestionably important advantages of such technologies, including ecological safety, renewability, decentralization of supply systems, and diversity are not factors which carry sufficient appeal to individual households in determining fuel choices for domestic purposes. The study finds that safety, reliability of supply, convenience, and a fuel’s versatility are the factors which determine its desirability.
Traditional Energy Programs and the Theory of Open Access Forest Resources
Authors: Clarke Harry R. , Shrestha Ram M.
Published: May 2011

This paper analyzes implications of open access forestry for traditional energy programs in LDC’s. The role of improved woodstoves, charcoal kilns, forest-access and biogas programs is examined. A key finding is that, with sufficient elasticity in fuelwood demands, traditional energy programs may reduce long-run fuelwood supply stocks.
Comment on “Macroeconomic Impacts of Energy Shocks,” the Energy Modeling Forum Comparison of Models
Authors: Saunders Harry D.
Published: May 2011

In its recently completed study of energy shocks, the Energy Modeling Forum (EMF) took 14 macroeconomic models and, by carefully comparing them, evaluated a number of policies for counteracting the negative impacts of an oil shock. The study provides an exceptional look at this important question, and the summary report by Hickman, Huntington, and Sweeney (1987) is full of valuable insights. Energy economists with an interest in this field should view the summary report, along with all its supporting reports and individual modeler summaries (available from EMF), as a required reference.
Research Papers: A New Modeling Framework For Medium-Term Energy-Economy Analysis in Europe
Authors: Capros Pantelis , Karadeloglou Pavlos , Mentzas Gregory , Valette Pierre
Published: May 2011

This paper presents the main theoretical and empirical issues concerning the HERMES-MIDAS Linked Systems (HMLS) of models. The systems are very large scale and are intended to perform European-wide medium-term investigations of the energy-economy interactions. The macroeconomic model follows the neo-Keynesian approach to economic modeling while the set of energy demand and supply models follows a mixed engineering-econometric one. We facilitate the presentation of the linkage by proposing a typical aggregate neo-Keynesian model into which we introduce energy ‘ and proceed by establishing a general framework for energy-economy model linkages. This framework is applied to the coupling of the actual large-scale models. Finally, the policy analysis capabilities of the HMLS in contrast to the original HERMES model are examined by means of a theoretical and empirical comparison of the two systems ‘ simulation properties and policy responses.
Urbanization and Energy Use In Economic Development
Authors: Jones Donald W.
Published: May 2011

Urbanization and industrialization are the most prominent features of economic development. The energy use changes brought by industrialization are well known, but urbanization also imposes major, if subtle, changes in energy use. Urbanization shifts production activities formerly undertaken in the home with little or no energy to outside producers who do use energy. One of the largest changes is the daily travel of urban residents, primarily but not exclusively, to work Personal transportation in rural areas generally entails little or no fuel use, while urban transportation does, particularly as incomes increase. Higher density living also induces substitutions of modem for traditional energy forms. Finally, food must be transported longer distances to urban consumers than to rural, agricultural consumers.
Traditional Energy Programs with an Open Access Forest Resource: Policy Implications
Authors: Clarke Harry R. , Shrestha Ram M.
Published: May 2011

Policies for managing a forest subject to open access exploitation are discussed from the viewpoint of encouraging greater efficiency in the use of woodfuels. The usefulness ofmarket and non-market policy options for managingforest resources is shown to depend on whether fuelwood collection is the major cause of deforestation or not and, if so, whether fuelwood collection procedures have a market valuation.
Load Shifting Under Voluntary Residential Time-of-Use Rates
Authors: Caves Douglas W. , Herriges Joseph A. , Kuester Kathleen A.
Published: May 2011

Time-of-use (TOU) pricing has emerged in recent years as a popular rate program, offering utilities both a more efficient pricing mechanism and a tool for load management. Initial experiments with TOUpricing were generally designed to provide evidence on customer response to mandatory TOU rates, while residential TOU rates are currently being applied on a voluntary basis. In this paper evidence is provided on customer response in Pacific Gas and Electric ‘s voluntary TOUrate experiment. Comparing the results to those obtained in earlier mandatory experiments, volunteers are found to have a greater ability to shift usage in response to TOU rates than comparable customers on mandatory rates.
The Effect of Changes in the Percentage Depletion Allowance on Oil Firm Stock Prices
Authors: Lyon Andrew B.
Published: May 2011

In this paper I examine the effect of changes in tax laws on the value of firm stock prices. The behavior of oil firm stock prices in 1969 (at the time of congressional votes to reduce the percentage depletion allowance) is studied to test the hypothesis that this legislation resulted in a decline in the value of oilfirms. The empirical results show that statistically significant declines in the average value of oil firm stock prices did occur at the time of House and Senate committee votes. Cross-sectional tests show a significant correlation between the measured declines for individual firms and the expected declines predicted for those firms in the period surrounding one of the two committee votes.
Competitive Bidding In Electricity Markets: A Survey
Authors: Rozek Richard P.
Published: May 2011

A number of states as well as the Federal Energy Regulatory Commission have been considering whether traditional regulatory regimes in electricity and natural gas markets should be replaced with competitive bidding systems. This shift is designed to yield a more efficient allocation of energy resources within the existing legal framework The paper examines both the theoretical basis and empirical evidence on bidding processes in light of the characteristics of energy markets, especially electricity markets. It then discusses the extent to which one can draw policy conclusions about designing specific bidding processes for these markets. It concludes that given the underlying complexity of the products involved, the optimal system for procuring power should include a mix of bidding, negotiation and utility construction.
Technological Innovation and a Changing Energy Mix - A Parametric and Flexible Approach to Modeling Ontario Manufacturing
Authors: Mountain Dean C. , Stipdonk Bill P. , Warren Cathy J.
Published: May 2011

For the purposes of explaining historical trends in relative fuel usage and energy efficiency, an encompassing framework must incorporate both the influence of changing fuel prices and technological change. Schurr (1982), Rosenberg (1983), Jorgenson (1984, 1986) and Berndt (1986) have provided recent documentation of the importance of these two factors in explaining productivity growth. Moreover, these studies indicate that a key to understanding such trends is analysis at the individual industrial sector level. In ignoring the influence of technological change on interfuel substitution, modern studies (e.g., Gopalakrishnan, 1987; Moghimzadeh and Kymm, 1986) have left unaltered the approach taken in the pioneering studies of Berndt and Wood (1975), Fuss (1977), Griffin and Gregory (1976) and Halvorsen (1977).
Estimating the International GNP-Energy Relation: A Further Note
Authors: Moroney J.R. , Seaks Terry G. , Vines Donna P.
Published: May 2011

Energy enhances the productivity of capital, labor, and other factors of production, and generally promotes higher living standards. International cross-sectional studies of aggregate output per capita are often hampered by the absence of qualitatively comparable capital and labor services. And numerical measures of cross-country differences in technology are notoriously scarce, primarily because technological differences (at a macro level) are a pretty vague concept. Thus, it is often desirable to draw a simple relationship between broad international aggregates such as GNP and energy per capita.
Energy Supply in the 1990s and Beyond*
Authors: Subroto
Published: May 2011

I am both honored and pleased to be invited to address this, the 11th Annual Conference of the International Association for Energy Economics. Honored, because your Association is a body whose gatherings are always marked by the distinction of the participants, drawn from the ranks of the oil industry, other energy sectors, the academic world, international institutions and government departments. Accordingly, the presentations of the speakers have an impact which extends far beyond the bounds of your membership.
On the Economics of Cogeneration: Pricing and Efficiency in Government Owned Utilities
Authors: Jae-Cheol Kim  , Byong-Hun Ahn
Published: May 2011

Cogeneration has been gaining increasing importance in the pro- vision of electric power. When a utility purchases electricity produced by independent cogenerators and resells it to consumers, the question of whether or not a certain payment schedule of purchased power is "just and reasonable" becomes an immediate concern to each party concerned-- the utility, cogenerators and possibly regulatory agencies. The U.S. regulatory agencies generally have endorsed avoided cost pricing since the passage of the Public Utility Regulatory Policies Act (PURPA) in 1978, the rule requiring that the utility pay avoided costs-- the difference between total costs incurred by the utility before and after cogenerators' production. In Korea, on the other hand, a different rule has been implemented in pricing hydroelectric power purchased by the Korea Electric Power Corporation (KEPCO), Korea's only electric utility company from Korea Water Resources Corporation, a multi-reservoir dam corporation. The latter is currently paid based on actual costs incurred by its individual hydroelectric plants.
Integration of Short and Medium/Long Term Planning in the Indian Power Sector
Authors: Thukral Kapil , Ramesh S. , Kaul Hindu
Published: May 2011

The power supply situation in India is characterized by shortages. In response to this situation, many industrial consumers have invested in captive generation facilities for their own use. Although the use of small, expensive, diesel-based captive generator sets may be rational from the viewpoint of the industrial entrepreneurs, their use is not the least-cost option for the Indian economy. While it is recognized that medium- to long-term planning is essential, it is realized that additional shortages will emerge in the short term if the utilities prefer to invest largely in hydro, nuclear and steam thermal technologies--all of which have relatively long gestation periods of over five years, but are more economical than small decentralized diesel generators. The relative economics of gas turbines in the combined cycle mode (which may be commissioned within three to four years) is demonstrated by using a linear programming approach.
North American Natural Gas Markets: Summary of an Energy Modeling Forum Study
Authors: Huntington Hillard G. , Schuler Glen E.
Published: May 2011

This paper summarizes the research by the Ninth Energy Modeling Forum (EMF) working group which focused on the evolution of the North American natural gas market through 2010 _ The group analyzed four standardized scenarios: upper and lower oil price paths, the low U.S. natural gas resource base, and high U.S. natural gas demand. The group sought to develop insights about the gas market’s development under these scenarios by using economic models and additional analyses. Some of the most critical factors highlighted in the study, that will affect the usage and price of gas in the future, are the nature of the gas-oil substitution in the industrial and utility boiler market, which will depend on relative burnertip residual fuel oil to gas prices, the incremental costs of finding and producing additional gas supplies in the U.S. and Canada, and the amount of potential gas imports.
Natural Gas Policy: The Unresolved Issues
Authors: Lyon Thomas P.
Published: May 2011

This paper analyzes the restructuring of the natural gas industry which has been going on for several yean. It gives the background to the ament attempts at restructuring and describes Stanford University’s 9th study by the Energy Modeling Forum on North American gas markets which is the analytical basis for this paper. It then describes the tension between the two regulatory objectives, economic efficiency and satisfying public policy concerns regarding the distribution of economic surplus, which must be considered in any analysis of regulatory policy and market structure in the natural gas industry. Ten key natural gas policy issues that remain unresolved are analyzed and a more general discussion of how the gas industry may evolve under several alternative sets of market conditions are presented. Finally, it considers how political pressures may affect gas policies in future.
Comments on Manne and Richels: “C02 Emission Limits: An Economic Analysis for the USA”
Authors: Hogan William W.
Published: May 2011

This paper evaluates the Global 2100 model application on global wanning, by A. S. Manne and R. G. Richels, which is presented in this edition of The Energy Journal. The paper discusses Manne and Richels's general analytical framework, the Global 2100 model; and Manne and Richels’s exploration of international interdependence, benefit calculations, and the uncertainty which must necessarily accrue to any discussion of global warming. The paper suggests that cost-benefit analyses, such as the one provided by Manne and Richels, are necessary for policy recommendations. Differences in regional impacts of global warming are noted. The paper concludes that Manne and Richels’s study is very worthwhile and pleads for further studies.
Cost-Effective Control Strategies for Energy-Related Transboundary Air Pollution in Western Europe
Authors: Welsch Heinz
Published: May 2011

In this paper a simulation model of the West European power plant industry, combined with transboundary source-receptor relationships, is used to determine cost-effective reduction rates for SO3 emissions in any one country so that certain, exogenously given, deposition reduction targets are attained. The overall costs implied by the proposed strategies, and their distribution among countries, are examined and compared to those associated with the traditional emission-standard approach. It is found that the cooperative and flexible strategies considered allow for overall cost savings of up to 60 percent, given the same degree of deposition reduction.
The Efficient Design of Contracts To Purchase Cogenerated Power
Authors: Hall Edward C. , Parsons John E.
Published: May 2011

This paper analyzes long-term power purchase contracts between an electric utility and a cogenerating facility and suggests ways to improve them. It discusses the best way to construct the contract payment structure in light of the given avoided cost structure; analyzing in detail the harmful incentives to low maintenance and how to avoid them. The paper concludes that the method it describes can be used to aid in the better design of contract provisions that will remedy the problem of incentives to low maintenance.
The Impact of Nuclear Power on the Systematic Risk and Market Value of Electric Utility Common Stock
Authors: Fuller Russell J. , Hinman George W. , Lowinger Thomas C.
Published: May 2011

The objective of this study is to determine whether investors perceive utilities with nuclear plants to be more risky than utilities with no nuclear facilities. Two basic analytical frameworks are used. One approach is to analyze investors’ differential perception of the market-related systematic risk of nuclear utility stocks versus non-nuclear utility stocks. This is done by comparing the betas of nuclear versus non-nuclear utility stocks. The second approach is an econometric treatment of price to book value ratios, using cross-sectional data in the time period 1973 to 1987. For both approaches, the differences in the financial markets’ perception of risk, related to the special events of TMI, Chernobyl and the WPPSS bond default, are analyzed. Based on the crosssectional analysis of P/BV ratios in recent years, we estimate the financial markets valued nuclear power utilities at approximately 20% less than comparable non-nuclear utilities. We estimate that a 3% increase in the allowed rate of return for nuclear utilities (from 13.7% to 16.7% in 1988) would have been necessary to fully offset the discount associated with nuclear power.
Energy Efficiency and Capital Embodied Technical Change The Case of Mexican Cement Manufacturing
Authors: Sterner Thomas
Published: May 2011

This paper analyses energy efficiency in the Mexican cement industry by studying disaggregated data at the plant and production unit level. A short-run production function is examined to look at the substitution possibilities between labour and energy with given equipment, but these are found to be limited (as expected). Instead, reduction of energy use per unit of output is mainly due to capital embodied technical progress: the most important improvements in plant efficiency are related to investments in new pieces of specific equipment. Average energy intensity of the branch as a whole is, therefore, mainly explained by capacity expansion. Finally, the importance of factor prices and the relevance of our results to other industries are discussed.
The U.S. Demand for Highway Travel and Motor Fuel
Authors: Gately Dermot
Published: May 2011

This paper, based on an econometric analysis of annual data since 1965, examines the prospects for US highway travel and fuel demand, disaggregated by vehicle type (cars and light trucks). Despite projections by the US Department of Energy (DOE/EIA) of virtually no change in highway fuel use in the 1990s, we project a growth rate of about 1.3% annually. DOE/EIA assumes extraordinarily rapid improvement in fuel efficiency and relatively slow growth in large trucks’ vehicle miles. We project slower gains in fuel efficiency, for all types of vehicles, and faster growth for large trucks’ vehicle miles.
Analyzing Oil Production in Developing Countries: A Case Study of Egypt
Authors: Choucri Nazli , Heye Christopher , Lynch Michael
Published: May 2011

This article presents a detailed simulation analysis of the domestic oil sector in Egypt; a near-typical, non-OPEC, oil-producing developing country. Egypt is a small producer by international standards, yet significant enough that its oil production is important for the country’s economy and, under certain conditions, for the international oil market as well. A dynamic computer simulation model that depicts significant characteristics of the country’s oil sector is utilized to explore the implications of alternative scenarios for government policies, world oil prices, and geological parameters on patterns of production, exports, and export earnings.
Formulating Greenhouse Policies in a Sea of Uncertainty
Authors: Lave Lester B.
Published: May 2011

To prevent major global climate change all countries must begin to act now. However, there is no agreement on how rapidly greenhouse gases will be emitted over the next century, how rapidly they will accumulate in the atmosphere, what will be the cost of abatement, how large the climate change will be, or even whether the change will be predominantly beneficial or harmful. Beyond agreeing that greenhouse gases are likely to result in atmospheric warming, other factors held constant, there is no consensus on any of these questions.
Economic Activity and the Greenhouse Effect
Authors: Ogawa Yoshiki
Published: May 2011

Global warming is recognized as one of the most important issues in international politics, although specialists are still uncertain about the role which various socio-economic factors play in global warming under a variety of conditions. Among the factors examined in this paper, the burning of fossil fuels bears the greatest responsibility for global C02 emissions. Given the growth in emissions in the LDCs, global action to regulate emissions cannot be effective without their full participation and therefore north-south problems need to be addressed simultaneously, or before, the problem of global warming. The problem of global warming is becoming ever more urgent as energy demand has begun to increase again following the collapse of oil prices in 1986.
The Cost of Slowing Climate Change: a Survey
Authors: Nordhaus William D.
Published: May 2011

Policies to deal effectively and efficiently with the threat of greenhouse wanning must balance the costs of slowing climate change against the potential damages. This survey discusses one half of this question, the costs of slowing climate change by reducing greenhouse gas (GHG) emissions. The analysis provides estimates of the cost of reducing chlorofluorocarbon and C02 emissions, and inquires into the costs of using forestry options to remove C02 front the atmosphere. A promising new approach, the use of geoengineering is discussed qualitatively.
Productivity Trends and the Cost of Reducing CO2 Emissions*
Authors: Hogan William W. , Jorgenson Dale W.
Published: May 2011

Adequate control of CO2 emissions may require a significant increase in energy price, which in turn will create long-term economic costs. This paper explores the effects of long-term productivity trends in the U.S. economy and relates them to the cost of reducing CO2 emissions. Technology change has been negatively correlated with energy prices and positively correlated with materials prices. Thus, if all prices remain constant, expenditures on materials per unit of output will decline, and expenditures on energy per unity of output will increase. If energy prices increase, the rate of productivity growth will decrease. This trend will be very small, if measured on an annual basis, but eventually could be quite significant. A comparison with recent cost estimates of CO2 emission control suggests that this otherwise ignored productivity effect could be the largest component of a complete cost analysis.
Cutting CO2 Emissions: The Effects of Alternative Policy Approaches*
Authors: Whalley John , Wigle Randall
Published: May 2011

This paper starts from the premise that attempts to curtail global emissions of greenhouse gases are likely to be made in the next few decades. We discuss some of the possible international effects which could result from attempts to achieve such a cutback, and illustrate a methodology which we hope to extend, in subsequent work, to further evaluating the consequences of responding to the problem of global warming. We identify possible magnitudes of effects of cutting global C02 emissions, and illustrate ways in which intercountry terms-of-trade effects and changes in trade patterns may occur.
Forecasting Ultimate Oil Recovery and Its Rate of Production: Incorporating Economic Forces into the Models of M. King Hubbert
Authors: Cleveland Cutler J. , Kaufmann Robert K.
Published: May 2011

Dwindling production of oil from domestic fields and rising consumption have increased U.S. dependence on imported oil to an all-time high. Concern about the effect of this dependence on economic and national security has focused attention on the domestic resource base: how much oil awaits discovery and at what rate can it be produced? We analyze the adequacy of domestic resources by updating and modifying in important new ways the models of discovery and production developed by M. King Hubbert. Hubbert’s models have been a lightning rod for debate about the future of oil resources because they have been the most accurate on record When we include real oil prices and the annual rate of drilling effort in Hubbert’s model of oil discovery, there is no evidence for claims that the secular decline in discoveries per foot of well drilled has been arrested or reversed in the lower forty-eight states. Our results indicate that there is little oil waiting to be found in unexplored sedimentary formations in the lower forty-eight states using conventional exploration techniques. Furthermore, we show that the declining quality of the resource base has offset the positive stimuli of price increases and changes in government policy towards a free market. Having passed through a period in which production in the lower forty-eight states fell 20 percent while real oil prices tripled, there seems little that the U.S. government can do to alter the bottom line for domestic operators so that U.S. production can displace imports to a significant degree. We conclude that the conventional supply side offers little room to manoeuvre around increased dependence on imported oil.
Efficient International Agreements for Reducing Emissions of CO2
Authors: Hoel Michael
Published: May 2011

International agreements are necessary to achieve significant reductions of emissions of C02 and other greenhouse gases. Traditional agreements of the type “uniform percent reductions” have two disadvantages: in the first place, it would probably be difficult to get a sufficiently large participation in such an agreement, since it gives a distribution of costs of reducing emissions which may differ strongly from the advantages the countries have from avoiding climatic changes. In the second place, agreements of this type are generally not efficient.

An international C02 tax and tradeable CO2 quotas are two alternative schemes which have several common features, and which both are (almost) efficient under reasonable conditions. With appropriately chosen tax reimbursements in the case of a C02 tax, or initial distribution of quotas in the case of tradeable quotas, it is possible to make all, or at least almost all, countries better off with the agreement than without.
Horizontal Oil and Gas Wells: the Engineering and Economic Nexus
Authors: Lohrenz John
Published: May 2011

Horizontal oil and gas well drilling is booming while, overall, development drilling is declining. The engineering parameters and how they affect the economics of horizontal drilling, compared to vertical drilling, are examined here. As a new applied technology, horizontal drilling can promise economic advantages over vertical drilling, but with incremental risks that must be weighed carefully. In the long term, horizontal drilling will merge into the ever-growing inventory of technologies that create the economics that extend the lives of, and yield more reserves from, oil and gas fields that would otherwise decline. The result is the persisting pattern of fields yielding more production than early estimates even as it remains impossible to count which particular new technology gave rise to so much more production.
A Risk Analysis of Oil Development in the Arctic National Wildlife Refuge
Authors: Powell Stephen G.
Published: May 2011

The Arctic National Wildlife Refuge (ANWR) in Alaska is simultaneously the most promising onshore area for oil exploration and one of the wildest areas remaining in the USA. The conflict between the need to develop energy resources and the desire to preserve wild areas has led to a prolonged debate over the merits of programs to lease the region for oil exploration and development.

In this study we report on a risk analysis of the oil potential of the ANWR. We develop a comprehensive simulation model of the oil exploration, development and production process in the ANWR based on publicly available data on the oil geology of the region. Compared to existing models of the ANWR, this model is unique in that it simultaneously takes into account the essential geologic characteristics of the region and the dynamic nature of the development process. The model projects the volume of oil production over time, oil industry profits and net national economic benefits, all in probabilistic terms.

The model provides a unifying framework for evaluating the limitations of previous models. It also allows us to better assess the potential role of the ANWR in future U.S. oil production, to evaluate the effects of policies that would mitigate environmental damage and, in general, to better frame the debate between advocates and opponents of development.
Predicting the Discoveries and Finding Costs of Natural Gas: the Example of the Scotian Shelf
Authors: Power M. , Fuller J. D.
Published: May 2011

Predicting the discovery rate and marginal finding costs of natural gas resources requires a well-documented and long statistical history. For partially explored basins, the statistical history is often inadequate. Attempts at avoiding the problem have been made using probabilistic modelling approaches. These are used to estimate the parent population of pools available for discovery and the probable discovery rate. The phenomenon of economic truncation, however, calls into question the precision and utility of such estimates. Furthermore, the exploration process is known to be biased toward larger pools, but no method of determining the extent of the bias has been discussed in the literature to date. To avoid these deficiencies, this paper employs the pool size distribution estimates routinely produced by geologists to drive a probabilistic modelling framework taking explicit account of the physical laws of resource depletion. The methodology is discussed and applied to Canada’s Scotian Shelf. In order to put the predicted costs for the Scotian Shelf in perspective, the results are then compared to forecasts for Alberta.
Is the World Oil Market “One Great Pool”?
Authors: Weiner Robert J.
Published: May 2011

Is there one, global market for crude oil? This appears to be the assumption made by most petroleum economists, stated succinctly by Adelman in a recent issue of The Energy Journal “The world oil market, like the world ocean, is one great pool” (July 1984, p. 5). Policymakers have often implicitly held the opposite assumption — that the world market is fragmented — as evidenced by the efforts of many importing-country governments to seek special arrangements for “secure supply” from exporters in the 1970s and early 1980s. Likewise, oil exporters have sought “secure outlets” for their crude in the late 1980s and early 1990s. These arrangements make no sense if the world crude oil market is integrated. In a similar fashion, a policy of diversifying suppliers, which is practised by many importers now, is senseless in a globally unified market.

Surprisingly, despite the importance of this issue, there has been no research directed at examining the question of the degree of integration vs. fragmentation of the world crude market. This study makes the first systematic effort in this direction — by analyzing patterns of price adjustment.

The correlation and regression results on price adjustment across regions indicate a surprisingly high degree of regionalization, implying that the world oil market is far from completely unified. The findings could be due to the ability of crude oil sellers to engage in price discrimination.

The findings imply that the world oil market is not “one great pool,” as claimed by Adelman. The implications for SPR policy, and other policies based on assumptions of international crude oil market integration, are discussed in the conclusion of the paper.
Optimizing Tax Strategies to Reduce Greenhouse Gases Without Curtailing Growth
Authors: Brinner Roger E. , Shelby Michael G. , Yanchar Joyce M. , Cristofaro Alex
Published: May 2011

Increasing federal gasoline taxes is one of the policy options available for reducing gasoline consumption and the resulting carbon dioxide (CO2) emissions that contribute to global warming. At the request of the U.S. Environmental Protection Agency (EPA), DRI/McGraw-Hill (DRI) estimated the levels of gasoline tax that would be necessary to stabilize CO2 emissions from the light-vehicle fleet over a 20-year period, and the economic impacts of such a tax. Three options for utilizing the revenues generated are examined: a reduction of the federal budget deficit, a reduction in personal and corporate income taxes, and a reduction in the employer-paid portion of payroll taxes. Each option would yield markedly different levels of economic performance: while the first two options would result in reductions in economic growth, the third option (a reduction in the employer-paid portion of payroll taxes) would result in relatively slight negative economic impacts in the short term and positive economic impacts in the long term.
Testing for Barriers to Energy Conservation-an Application of a Vintage Model
Authors: Ingham Alan , Maw James , Ulph Alistair
Published: May 2011

In this paper we use a sophisticated vintage model of the production structure of the U.K. manufacturing sector to analyze the pattern of energy conservation over the period 1971-1987 and to test whether there is evidence of significant market imperfections which could act as barriers to energy conservation. A major finding is that half the improvement in energy efficiency would have occurred anyway simply through the process of replacing some of the out-of-date capital present in 1971. The change in relative prices (especially energy prices and wages) was the leading cause of the remaining improvement up to 1980; thereafter technical progress became increasingly important and was the sole factor contributing to the improvement in energy efficiency after 1985. We are unable to find evidence of significant barriers to energy conservation in the U.K. manufacturing sector, though we point out the rather limited nature of the tests which we have been able to conduct.
The Welfare Impact of Rising Block Pricing: Electricity in Colombia
Authors: Maddock Rodney , Castaño Elkin
Published: May 2011

In Medellin, Colombia, electricity prices follow an unusual system of rising block prices. The stated objective of the policy is to redistribute income. In this paper we calculate the degree of redistribution achieved relative to that of a horizontal price schedule. We also calculate the efficiency cost of discrimination. The data come from a survey of over 1000 residential users of electricity.
Onsite Backup Generation and Interruption Insurance for Electricity Distribution
Authors: Doucet Joseph A. , Oren Shmuel S.
Published: May 2011

This paper extends recent work on interruption insurance for electric power by introducing onsite backup generation capacity as a supplementary form of interruption insurance. The basic model of interruption insurance as a mechanism for differential pricing is reviewed, the incentive for providing onsite backup generation capacity is demonstrated and the interaction between onsite backup generation and interruption insurance is analyzed. Two types of onsite backup, customer and utility owned, are discussed. It is shown that individuals’ economic incentives to install onsite backup generation dominate the utility’s incentive. Hence customer owned onsite backup decisions will pre-empt the utility’s plan to mitigate compensation payments by providing onsite backup generation.
The Trade-Off between Economic and Environmental Objectives in Japan’s Power Sector
Authors: Amagai Hisashi , Leung PingSun
Published: May 2011

The current concern about global wanning has made it necessary for the electric power industry in Japan to reexamine its power generation mix plan. Past studies on the optimal power generation mix in Japan have only emphasized economic efficiency. Thermal power generation producing carbon dioxide (CO2) emissions has a lower generation cost than hydropower and new energy sources. Hence, there is a trade-off between generation-cost minimization (the economic objective) and CO2-emission minimization (the environmental objective). This paper presents a quantitative study of the trade-off between these two objectives in the year 2000, and discusses the nature of the trade-off curve and the extent of power generation by source.
Limits on the Economic Effectiveness of a Carbon Tax
Authors: Kaufmann Robert K
Published: May 2011

Much of the discussion regarding policies to reduce the emission of carbon dioxide (CO2) and other greenhouse gases focuses on least-cost strategies. Policies that minimize costs are desirable because they are economically more efficient than policies that are based on a command and control strategy (Gasloms and Stram, 1990). Among the many least-cost policies now under consideration, a carbon tax has received the most attention. As currently envisioned, a carbon tax would be levied on users of fossil fuels according to the amount of carbon that is emitted when the fuel is burned. Because the combustion of coal emits more CO2 per heat unit than oil, which emits more CO2 per heat unit than natural gas, the tax on coal would be larger than the tax on oil, which would be larger than the tax on natural gas. The fuel specific charges that would be imposed by a carbon tax are a popular policy option because many believe that a carbon tax will reduce emissions of carbon dioxide in an economically efficient manner. That is, a carbon tax will reduce the use of fossil fuels by spurring technical change and by inducing the substitution of capital, labour, and non-energy materials. Furthermore, a carbon tax will reduce emissions of CO2 by inducing substitution of fuels that emit less CO2 per heat unit. The reduction in emissions that is achieved by interfuel substitution is caused by the differences in the size of the tax on coal, oil, and natural gas. Because the tax on coal is largest, the price of coal will rise relative to oil and natural gas and users will substitute oil or natural gas for coal.
DECOMMISSIONING PLANS AND COSTING IN GERMANY
Authors: Löschhorn Ulrich , Hollmann Herbert
Published: May 2011

Prior to reunification, within the borders of the Federal Republic of Germany there were seven reactors of different types and at various stages of decommissioning or planning. In this chapter, Ulrich Löschhorn and Herbert Hollmann highlight several factors which influence economic costs, including timing of dismantlement, site-specific features, lack of final repository, licensing framework, and political scenarios. It is apparent from this discussion that procedures, timing, key considerations, reasoning, and ultimate goals regarding decommissioning are similar from one country to another, with most countries facing similar challenges at about the same time. Although this means that each country can learn from the others’ experience, there is also little experience to use as signposts along the way.
STRATEGY, PLANNING AND COSTING FOR DECOMMISSIONING IN CANADA
Authors: Jayawardene Nihal D. , Stevens-Guille Peter D.
Published: May 2011

Ontario Hydro, the public-owned electric utility in Ontario, Canada, is one of the three largest nuclear utilities in the world. Decommissioning of its CANDU nuclear stations will begin about 2012 when the first station at Pickering is scheduled to be shut down after an operating period of 40 years. Other stations at Bruce and Darlington will be shut down and decommissioned subsequently. The cost of these operations is being charged to customers and is calculated using the annuity method. In this chapter, Nihal Jayawardene and Peter Stevens-Guille describe Ontario Hydro’s decommissioning policy, financial planning and method of funding future decommissioning costs. One policy requirement is that future generations should not have to pay for decommissioning costs; deferring costs far into the future is not financially prudent. The current status of public opinion in Canada on decommissioning and radioactive waste management, including the tourism value of a decommissioned reactor, also is discussed.