bluuebunny/crossref_metadata_2025 huggingface dataset:
Solving the Energy Problems in Developing Countries*
Authors: José Goldemberg
Published: May 2011

The industrialized nations have shown a remarkable ability to face the energy crisis of the 1970s by a combination of strategies which led in effect to the destruction of the OPEC cartel. The most important of these strategies was the reduction in oil imports made possible by the adoption of energy conserving technologies. In addition to that there was a remarkable shift from the use of oil to electricity which implies also a more efficient use of energy. While thermal cycles such as internal explosion motors used in automobiles convert only some 30 percent of the energy of the fuel into motive power in the wheels, electricity (once produced) can be converted into motive power with an efficiency of almost 100 percent. Of course the production of electricity from coal or oil goes also through a thermal cycle where energy is lost but the efficiency of conversion has been rising continuously, as shown in Figure 1. This shows the evolution of the thermal efficiency of British electrical generating stations (56 thermal power plants burning coal with a total generating capacity of 46.7 OW). In the period 1970-1985 the efficiency increased from 30 percent to 35 percent, equivalent in reality to an additional 10 mW of coal burning capacity.
Cost Effectiveness of Future Fuel Economy Improvements
Authors: Difiglio Carmen , Duleep K.G , Greene David L.
Published: May 2011

U.S. petroleum use today is 2 million barrels per day lower than it would have been if automobile fuel economy had not improved since 1975. This paper explores the potential for and cost of further increases in domestic passenger car fuel economy using market-ready technologies and sales mix shifts. Using technology already included in manufacturers’ production plans and based on consumers' willingness to pay for increased fuel economy, domestic auto mpg could be increased from the 1987 level of 27 mpg to 31.6 mpg in 1995 without reducing vehicle size or performance from 1987 levels. By 2000, 34.3 mpg can be justified on the same basis. A higher level, 36.4 mpg, is cost-effective, based on fuel cost savings over the entire expected vehicle life. The maximum level achievable with the technology included in this analysis is 39.4 mpg, but this level would not be cost-effective. Sales mix shifts stimulated by price subsidies for efficient cars and surcharges on inefficient models can cause about 1 or 2 mpg of higher fuel economy before becoming too costly.
C02 Emission Limits: An Economic Cost Analysis for the USA
Authors: Manne Alan S. , Richels Richard G.
Published: May 2011

This paper provides a cost-benefit analysis of controlling or decreasing CO2 emissions. It uses an analytical framework, called Global 2100, which is designed to evaluated C02 energy economy interactions and estimate the cost of a carbon emissions limit. It analyzes three demand parameters (potential GNP growth, elasticity of price induced substitution between capital-labour and energy, and the rate of autonomous energy efficiency improvements) which are crucial to the debate over energy and environmental futures. The paper discusses various energy sources which are either presently in use or will possibly be in use in the future, and analyzes their impact on cost-benefit analyses. Finally, the paper analyzes the results of carbon constraints and suggests that there is need for more research and development on the subject.
Regional Impacts of Petroleum Price Regulation: The Case of Texas, 1973-1983
Authors: Jones Clifton T. , Bremmer Dale S.
Published: May 2011

A dynamic engineering-based econometric model of the Texas petroleum industry is used to jointly assess the impacts of federal price controls and the windfall profit tax, on both oil and gas supply, over the period 1973-1983. Comparing simulation results obtained using actual prices, and then counterfactual, uncontrolled prices, show small but persistent losses in aboveground production but considerably larger percentage impacts in drilling activity and new reserve additions. Thus, the long-run opportunity costs of post-embargo energy policy may not be fully reflected in traditional calculations that use constant supply elasticities to calculate annual supply impacts without regard to previous years’ prices or production levels.
Structure and Organization of the Natural Gas Industry: Differences between the United States and the Federal Republic of Germany and Implications for the Carrier Status of Pipelines*
Authors: Teece David J.
Published: May 2011

This paper explores various ways to organize (he natural gas industry. In particular, it examines the function of merchant pipelines and explores how mandatory carriage has come to be introduced into the United States. The applicability of the US experience to the European Community is questioned because of the very different regulatory histories of the United States and Europe. The paper concludes that the "open access" trend in the United States has stemmed from the need to patch up the results of previous regulatory errors; and though the Federal Energy Regulatory Commission (FERC) may have helped relieve certain short-term problems by championing open access, it may have created long-term problems that are disguised by the current gas glut. The American regulatory experience in natural gas over the past two decades is seen as most unfortunate, and the benefits available to Europe from imitating recent FERC regulatory strategies are found to be illusory.
OPEC Behaviour Under Falling Prices: Implications For Cartel Stability
Authors: Jones Clifton T.
Published: May 2011

The surprising extended decline in real oil prices during the 1980s has raised the question of OPEC’s continued viability as a price-setting cartel. In response, Griffin’s (1985) tests of alternative hypotheses about OPEC behaviour performed over a period of generally rising prices (1971:1-1983:III) are repeated for the more recent period of falling prices (1983:IV-1988:IV), yielding the same general conclusions: most OPEC members continue to behave in a “partial market sharing” way, while most non-OPEC oil producers do not. Thus the evidence suggests that recent oil price reductions are more the result of deliberate output adjustments by the cartel than the unintentional outcome of a breakdown in cartel discipline on the way to eventual collapse.
Low-Cost Strategies for Coping with CO2 Emission Limits (A Critique of “CO2 Emission Limits: an Economic Cost Analysis for the USA” by Alan Manne and Richard Richels)
Authors: Williams Robert H.
Published: May 2011

Manne and Richels (Manne and Richels, 1990) have developed a useful modelling framework for evaluating the potential economic impacts of alternative strategies for coping with greenhouse wanning. Their estimate is that the discounted present value of economic consumption losses arising from a 20% reduction in CO2 emissions through the next century is in the range of $0.8 to $3.6 trillion. This critique shows that the options for reducing C02 emissions through energy demand reduction and energy supply shifts are much broader than those considered by Manne and Richels in the initial run of their model. The possibilities are so diverse with both present and future technologies, that the minimum C02 emissions constraint penalty estimated by Manne and Richels may well prove to be too high - and the possibility of a negative penalty cannot be ruled out. Manne and Richels are correct in arguing that a vigorous R&D program is needed to keep economic consumption losses associated with constraints on C02 emissions at low levels, and that waiting for clarification of the scientific issues relating to the greenhouse warming before launching such R&D efforts would be unwise, but the priorities for R&D implicit in the initial run of their model are much too narrowly focused. As this analysis indicates, a much more broadly based energy R&D program is called for.
Integrating Direct Metering and Conditional Demand Analysis for Estimating End-Use Loads
Authors: Bartels Robert , Fiebig Dertzil G.
Published: May 2011

Conditional demand analysis (CDA) is a statistical method for allocating the total household electricity load, during a period, into its constituent components, each associated with a particular electricity-using appliance or end-use. This is an indirect approach to the estimation of end-use demand and, quite naturally, it often generates imprecise estimates. One of the possible methods for improving these estimates involves the incorporation of data obtained by directly metering specific appliances. It is argued that an extremely natural approach to the use of this extra information follows directly from a reformulation of the standard CDA model into a random coefficient framework. Some new results on the possible efficiency gains from such an approach are developed. Illustrations based on an empirical study of New South Wales (NSW) households are also provided.
Introduction: Facts and Uncertainties
Authors: Cox Loren C.
Published: May 2011

The unusually hot summer and drought in 1988 in parts of North America stimulated wide discussions about the cause of these events. While most scientists now studying climate believe that the 1988 events were short-run phenomenon, some scientists and many policy makers in the U.S. Congress and Administration suggest that this weather was linked to global warming caused by a build-up of the so-called greenhouse gases: carbon dioxide, nitrogen oxides, methane and chlorofluorocarbons.
CO2 Emissions from Major Developing Countries: Better Understanding the Role of Energy in the Long Term*
Authors: Sathaye Jayant , Ketoff Andrea
Published: May 2011

This paper analyzes projected carbon dioxide emissions from the developing countries in 2025. The paper is based on analyses of energy use patterns, today and in the future, for nine major developing countries. These countries account for over two-thirds of the energy related emissions from the developing world. The analysis indicates that emissions from these countries increase fourfold by 2025, but policies aimed to reduce emissions curtail them to a threefold increase. Further, more than three -quarters of the reduction in carbon emissions are achieved through efficiency improvements and the remaining improvements are achieved through fuel switching. Industry contributes the most to carbon emissions, followed by the transport and residential sectors. Transport displays the largest relative potential for carbon reduction (33%). The economic growth rates to which each country aspires increase oil demand from 7 million barrels today to 25 million barrels by 2025. While this level may not strain world oil supply, individual countries may not be able to import oil because of foreign exchange constraints. Thus despite efficiency improvements and fuel switching, energy demand and carbon emissions from the developing countries increase severalfold by 2025.
EPA’s Scenarios for Future Greenhouse Gas Emissions and Global Warming
Authors: Lashof Daniel A.
Published: May 2011

While it is not possible to stabilize greenhouse gas concentrations immediately, a global commitment to reducing emissions would decrease the risks of global warming regardless of uncertainties about the response of the climate system. Scenario analyses conducted by EPA for a Report to Congress on Policy Options for Stabilizing Global Climate indicate that if no policies to limit greenhouse gas emissions are undertaken, the equivalent of a doubling of carbon dioxide would occur between 2030 and 2040, and the Earth might be committed to a global warming of 2-4°C(3-7°F) by 2025 and 3-6°C(4-10°F) by 2050. Early application of existing and emergingtechnologies designed among other things, to increase the efficiency of energy use, expand the use of non-fossil energy sources, reverse deforestation, and phase out chlorofluorocarbons, could reduce the global warming commitment in 2025 by about one-fourth, and the rate of climatic change during the next century by at least 60%. A global commitment to rapidly reducing greenhouse gas emissions could stabilize the concentrations of these gases by the middle of the next century, perhaps limiting global warming to less than 2°C(3°F).
Economics of Electricity Self-Generation by Industrial Firms
Authors: Rose Kenneth , McDonald John F.
Published: May 2011

This study develops, and econometrically tests, a model explaining the relative importance of several key economic and engineering factors that industrial firms consider when deciding whether to self-generate or cogenerate electricity. The model and empirical results (based on data from the chemical and paper industries) suggest that industrial self-generation is determined by the derived demand for electricity, price of purchased electricity, and marginal cost of self-generation. The buyback rate was found to be important only when certain economic and engineering conditions are met -- such as a relatively low marginal cost and/or a sufficiently high buyback rate. The evidence presented suggests that for most firms the buyback rate play’s no role in determining the quantity of electricity demanded or produced. The results indicate that policy actions related to industrial cogeneration should focus on the price of electricity and factors that affect the plant's marginal cost of producing electricity.
Economic Evaluation of Electricity Demand-Side Management Considering Customer Value
Authors: Hobbs Benjamin F.
Published: May 2011

What measure of economic efficiency is appropriate for evaluating demand-side management (DSM) programs sponsored by electric utilities? Most regulatory commissions in the United States require that utilities assess the efficiency of alternative programs as part of their planning process. A criterion based upon maximization of consumer surplus is proposed. This, the “most value” test, not only counts the avoided supply cost and environmental benefits of such programs, but also the changes in customer value that result from rebound/takeback and changes in electric rates. The test can be viewed as an extension of the “least cost” test, which many commissions now require utilities to use. Among the “most value” test’s practical implications is the fact that the net benefits of DSM will often be decreased if free riders are present or if electric rates must increase to fund the program. The “least cost” test wrongly assumes these effects to be merely matters of income transfer. Consequently, some programs that are desirable from a “least cost” standpoint will not be beneficial from a “most value” point of view. However, if rebound effects are large enough, the opposite can happen: some DSM programs which are apparently too costly will actually have positive net benefits. These conclusions apply not only to programs for conserving electricity, but also to water and natural gas conservation efforts and programs that promote energy use.
The Cost of Switching Electricity Generation From Coal to Nuclear Fuel
Authors: Virdis Maria R. , Rieber Michael
Published: May 2011

The Western European and Japanese nuclear power cost advantage over coal-fired electricity generation has been used, particularly since global warming became an issue, to counterpoint the U.S. experience — where the advantage is not apparent. Using OECD methodology, this paper examines the OECD assumptions and, as necessary, replaces them with European/Japanese practice. Additionally, for comparison with the U.S., market conditions replace statist controls. With the revised assumptions, the OECD data are resimulated yielding a severe reduction or reversal of the European/Japanese nuclear to coal advantage. Since the new generation is only developmental, existing technologies are used.
The Cost of Australian Carbon Dioxide Abatement
Authors: Marks Robert E. , Swan Peter L. , McLennan Peter , Schodde Richard , Dixon Peter B. , Johnson David T.
Published: May 2011

This paper examines efficient means of abating the greenhouse effect in. Australia by reducing the emissions of C02. It examines the generation of C02 emissions from fossil fuels in Australia, and analyses means to cut emissions from electricity generation and road transport. Finally, it calculates the cost, in terms of growth forgone, of measures to attain the Toronto targets for Australian electricity generation and road transport, using the ORANI multisectoral model.
Market Barriers to Energy-Efficiency Investments
Authors: Sutherland Ronald J.
Published: May 2011

The conservation literature argues that numerous cost-effective conservation measures could be undertaken, but they are not because market barriers discourage such investments. A review of these barriers indicates that, in general, they do not discourage investment and they are not market failures. A conventional investment model suggests that business investments in energy efficiency are made with the same decision rules as any other investments. Consumers who invest in energy efficiency require higher rates of return when the investments are illiquid and they are unable to diversify away the risk. The high discount rates required by consumers for energy-efficiency investments reflect real costs in a competitive market, not artificial market barriers. Policies that encourage the dissemination of information, such as appliance labelling may promote energy efficiency and overall economic efficiency. Policies, such as appliance standards, that require consumers to invest according to lower discount rates, reduce consumers’ overall economic wellbeing. Two market failures that illuminate the need for government support of conservation policies are the external costs of energy consumption and production and the lack of aggregate insurance against energy-related risks.
The Value of Commodity Purchase Contracts With Limited Price Risk
Authors: Teisberg Elizabeth Olmsted , Teisberg Thomas J.
Published: May 2011

This paper describes and demonstrates the equilibrium market valuation of commodity purchase contracts with price ceiling? or price floors or both. These contracts, which we call “limited price risk” contracts, are significantly easier for buyers and sellers to agree upon than fixed price contracts when price uncertainty is high and buyers and sellers have inconsistent price expectations. Analysis of an actual natural gas contract, as well as the existence of many brokers promoting limited price risk gas contracts, suggest that these contracts may be priced inefficiently in practice. Our example application should help managers to make use of modem financial techniques in assessing the value of these types of contracts.
Compiementarity-Substitution Relationships in the Demand for Time-Differentiated Inputs under Time-of-Use Pricing
Authors: Tishler Asher
Published: May 2011

In this paper we incorporate the non-synchronic responses of different inputs to changes in relative factor prices and develop sufficient conditions under which time-differentiated (over the day) electricity inputs are complements or substitutes. Similar sufficient conditions are developed for time-differentiated labour inputs. We also examine the strong and sometimes one-directional, relationships between the distributions over the day of the demands for labour and electricity. These relationships depend, among other factors, on the objective function of the firm (profit maximization, cost minimization) and on the specific time-of-use (TOU) schedules (of labour, electricity, etc.). Our results are also dependent on the assumption that firms can adjust inputs to changes in input prices on an hourly basis; more specifically, the underlying technology is assumed to be given by an hourly production function. Two issues are emphasized in the analysis. First, we show that short-run cost minimization may be an inappropriate procedure for cost-benefit analysis. Second, under the model developed in this paper, the commonly used weak separability assumption (between electricity and other inputs) implies radically different relationships among the time-differentiated inputs under profit maximization and cost minimization.
Manufacturing Energy Use in Eight OECD Countries: Trends through 1988
Authors: Howarth Richard B. , Schipper Lee
Published: May 2011

This paper reviews the evolution of manufacturing energy use in eight industrialized nations: West Germany, Denmark, France, Japan, Norway, Sweden, the United Kingdom, and the United States. Manufacturing energy use fell in these nations by 16% between 1973 and 1988 while manufacturing value-added increased by 41%. Reduced energy intensities in six industry groups -paper and pulp; chemicals; stone, clay and glass; iron and steel; nonferrous metals; and other manufacturing - were the primary source of this apparent decoupling of energy use and output. Between 1973 and 1988, intensity reductions would have driven down sectoral energy use by 32% if the level and composition of output had remained constant. Structural change, or shifts in the product mix, would have reduced energy use by 11% if the total level of output and the energy intensities of each industry group had remained constant.
The Impact of an Oil Market Disruption on the Price of Oil: A Sensitivity Analysis
Authors: Helkie William L.
Published: May 2011

This paper provides a quantitative analysis of the change in the price of oil due to an exogenous change in the supply of oil. It first outlines the role of oil in large-scale econometric models and reviews the theory upon which the oil/energy sectors in these models are based. It then presents a small reduced form of the large-scale econometric model and discusses the model’s key parameters. The model is solved in order to determine the price of oil in the event of an oil supply disruption. The paper then discusses the sensitivity of the price effects of an oil market disruption to changes in the model’s parameters and compares this range of price estimates to the three major supply disruptions of the past two decades.
ESTIMATING THE COSTS FOR JAPAN’S JPDR PROJECT
Authors: Yanagihara Satoshi , Tanaka Mitsugu
Published: May 2011

There has been an international flavor of cooperation in the commercial development of nuclear power. This cooperation is most strongly established with the development of strategies for decommissioning. Many countries are beginning this phase at about the same time; Japan, Canada, Germany, and the United States all are involved in dismantlement projects. This chapter, along with the next four chapters, addresses various aspects of the methodological approaches being developed to estimate decommissioning costs. Each country has adopted a different strategy for reactor decommissioning, taking its political and technical situations into consideration.

Japan also has its own strategy of reactor decommissioning, reflecting the geographic and economic positions peculiar to Japan. The Japan Power Demonstration Reactor (JPDR) decommissioning program is in the process of establishing a decommissioning data base and a cost estimation methodology, as well as developing new technology for reactor decommissioning. Various information about the JPDR dismantling has been accumulated in the decommissioning data base, which will be used for: (1) planning future decommissioning of commercial nuclear power reactors; (2) verifying the developed code system for management of reactor decommissioning; and (3) managing the ongoing JPDR dismantling. The computer code system developed in this program is expected to contribute to studying cost estimation and the optimization of decommissioning plans for commercial nuclear power reactors.
GENERIC APPROACHES TO ESTIMATING U.S. DECOMMISSIONING COSTS
Authors: Smith Richard I.
Published: May 2011

The estimation of decommissioning costs has certain common features, regardless of country or slate. In the U.S., the NRC has taken this into account as they worked on the development of generic estimates. The author of this chapter, Richard Smith, has been at the center of this effort for more than a decade. In this chapter, he summarizes three principal methods that have been used in cost estimates in the U.S.: the linear extrapolation approach, the unit cost factor approach, and the detailed engineering approach which he helped to develop at Pacific Northwest Laboratory in Washington state.
A PRIVATE CONTRACTOR’S APPROACH TO DECOMMISSIONING COSTS
Authors: LaGuardia Thomas
Published: May 2011

Generic cost estimates are important in giving a general impression about the magnitude of the overall task of decommissioning. Site-specific cost estimates, however, are necessary for each individual power plant so that differences in design, site, and history will be reflected as accurately as possible. Thomas LaGuardia has more experience in preparing such estimates than anyone else in the U.S. In this chapter he gives an insider’s view of cost estimates which will be valuable to the utility operator who wants to know whether an estimate is adequate without being overinflated, to the regulator who is responsible to the citizens, and to the public who ultimately will pay the bills. He discusses various types of contracts such as fixed price, time and materials, cost-plus-fixed-fee, and utility-to-DOC fixed price, recommending the use of fixed-price contracts for subcontractors and a cost-plus-fixed or incentive fee for the primary contractor. He stresses the need for site-specific estimates.
MANAGING QUALIFIED NUCLEAR DECOMMISSIONING TRUST FUNDS UNDER UNCERTAINTY
Authors: Hiller Howard
Published: May 2011

Funds for the eventual decommissioning and removal of nuclear power plants are accumulating. The amount will total many tens, perhaps hundreds of billions, of dollars. One of the ingredients in setting aside these funds is managing them so as to assure that just enough cash is on hand at the time of decommissioning to meet all required expenses at the lowest possible net present value cost to utility ratepayers. As with any investment, there can be a variety of opinions. For this reason, it is important to consult several sources for advice on the investment of such nuclear decommissioning trust funds (NDTs). The next three chapters provide such advice from the perspective of three different firms. The first, by Howard Hiller, stresses the importance of an adaptive approach, pointing out that the most difficult question is the choice of investment maturities. Hiller employs a simulation methodology to quantify the risk-cost characteristics of strategies along the maturity spectrum—from short-to long-term. He identifies some of the unique uncertainties inherent in decommissioning and brings these uncertainties into his analysis. He concludes that the steepness of the municipal yield curve can be exploited even in the presence of inflationary uncertainty.
INVESTMENT STRATEGIES FOR EXTERNALIZED NUCLEAR DECOMMISSIONING TRUSTS
Authors: Tuschen Thomas R.
Published: May 2011

This chapter constitutes the third view of nuclear trust fund investment. It addresses several overall strategies of such investment by identifying the types of trusts, investment objectives, risk considerations, and the historical record. The author uses a fund adequacy analysis to examine expected cost growth, expected fund value, actual cost growth vs. expected cost growth, and actual fund value vs. expected fund value. He believes that while the long-term goal of such nuclear decommissioning trust (NDT) investment is quite definable, the practical ability to meet the goal is limited. Under the current requirements, he considers the realistic prognosis for a real return on investment to be low, if not zero, even with the close monitoring that will be needed.
A COST/BENEFIT PERSPECTIVE OF EXTENDED UNIT SERVICE AS A DECOMMISSIONING ALTERNATIVE
Authors: Hewlett James G.
Published: May 2011

Some people consider life extension (and its cousin, license renewal) an alternative to decommissioning. The reasons for the popularity of such alternatives include presumed cost effectiveness, retention of scarce power plant sites, and the continued ability to pass on waste storage expenses as a cost of service. In this chapter, James Hewlett addresses nuclear power plant life extension—which he calls NUPLEX--in its economic garb, starting with a look at the common utility presumption that life extension of a nuclear plant will allow it to produce electricity at a lower rate than new coal generation. This presumption, he argues, may not be supportable by analysis. He concludes that the deferral of constructing new replacement capacity would result in cost savings only if both the level and escalation rate of the operating costs for the refurbished unit fall substantially from 1986 levels. Therefore, it is unclear whether the deferral of the construction of new capacity would result in the cost savings, although it definitely shifts the financial burden into the future.
THE PROJECTED INFLUENCE OF EXTENDED UNIT SERVICE
Authors: Lapides M.E.
Published: May 2011

If the operational life of a nuclear power plant can be extended, decommissioning will be delayed. In effect, this is an alternative to decommissioning. Is this a sensible or desirable option? In this chapter, M.E. Lapides evaluates the cost, environmental consequences, and funding impacts of delaying for 20 to 30 years. One of his conclusions is that the impacts of decommissioning on any of these three categories will be insignificant to the decommissioning decision. A contrasting view was offered in Chapter 20.
FINANCIAL IMPLICATIONS OF EARLY DECOMMISSIONING
Authors: Hewlett James G.
Published: May 2011

There are three generalized timing possibilities for decommissioning: at the end of the original operating license, after some period of life extension, or sometime before the end of normal service. In this companion piece to his discussion of life extension in Chapter 20, James Hewlett addresses the third option. Premature decommissioning can arise—as it did for Unit 2 of Three Mile Island—from an accident, or—more commonly— because it may be cheaper to close the facility than to have it continue in operation. The economic implication of premature closure is one of potentially insufficient fund accumulation. As Hewlett points out, the decision to close a plant is complicated by decommissioning considerations; for example, the decision could depend in part on the status of the accumulated funds. Such a decision also can influence plans for new construction since it may delay the time of closure for existing plants. State regulatory bodies in the United States influence such decisions through their control over rates of return. In the end, decommissioning cost considerations often influence decommissioning timing.
THE EXPANDING DECOMMISSIONING FOCUS: A COMPARISON OF COAL AND NUCLEAR COSTS
Authors: Williams Daniel H.
Published: May 2011

Are nuclear power plants the only industrial facilities that deserve decommissioning attention? Absent the radiation hazards of nuclear facilities, does it matter if other types of industrial equipment are decommissioned? If they are decommissioned, is the cost and effort large enough to really worry about? Daniel Williams examines these and other questions by comparing the costs of decommissioning at comparable coal and nuclear power plants. Williams argues that the nuclear industry is setting the standard among industries in planning and preparing for decommissioning, and that the nuclear experience provides information that can be applied to the decommissioning of all types of facilities.
THE OPTIMAL TIME TO DECOMMISSION COMMERCIAL NUCLEAR REACTORS
Authors: Rothwell Geoffrey S.
Published: May 2011

One of the key questions related to decommissioning is its optimal timing. In this final chapter, Geoffrey Rothwell integrates the findings presented in Nuclear Decommissioning Economics by proposing a model of discounted decommissioning costs. The real cost of decontaminating a reactor is specified as a function of its size, the volume of radioactive material, radiation exposure regulation, and the rate of productivity change in the decommissioning industry. The model allows calculation of an optimal waiting period between reactor shutdown and decommissioning. The optimal waiting period decreases with tighter radiation exposure regulation and higher inflation rates for radioactive waste burial.
UTILITIES AND DECOMMISSIONING COSTS: THE MEETING OF TECHNOLOGY AND SOCIETY
Authors: Ballard Kenneth P. , Carl Everett Margot E. , Everett Willard C.
Published: May 2011

Nuclear energy policy is impacted by several groups, including regulatory agencies, public interest organizations, private business, and academic research. As policy bends and changes, no group is affected more strongly than public utility companies. The principal reason for such sensitivity is that the utility companies, more than any of the other players in the decommissioning business, are the link between technology and society. This chapter presents the utility view of decommissioning within the context of PG&E’s nuclear power stations at Diablo Canyon and Humboldt Bay. The discussion includes special utility problems, such as inherent uncertainties and the causes for over- and underestimating. Among the conclusions is that the overall discussion of decommissioning technology is developing outside the commercial marketplace and will likely lead to inefficiencies, and that the various social costs and ramifications of decommissioning need much more attention.
FEDERAL REGULATION OF DECOMMISSIONING ECONOMICS
Authors: Wood Robert
Published: May 2011

As we move deeply into the new territory of large-scale decommissioning, countries around the world are looking to the United States for guidance and experience in establishing their own approaches. In the U.S., the Nuclear Regulatory Commission is the lead agency responsible for public health and safety issues linked to commercial nuclear power. This responsibility includes assuring adequate funds for decommissioning. In this chapter, Robert Wood introduces us to the regulations and positions of the NRC regarding decommissioning financing. The issues include why the NRC chose external funding mechanisms, how the funds should be collected and invested, the relationship between the NRC and state agencies, and fund assurance in a variety of cases including possible accident and bankruptcy. While this discussion will serve as an overview of the most significant aspects of decommissioning financing, it also introduces us to other chapters which focus on the relationships of the NRC with the states and electric utility companies.
STATE REGULATION OF DECOMMISSIONING COSTS
Authors: Strauss Peter M. , Kelsey James
Published: May 2011

Even though the NRC has jurisdiction over setting regulations governing financial assurance for decommissioning, the states have the specific responsibility of setting rates for fund accumulation. Each state must include many factors in determining the appropriateness of the rate requests from the utility companies under this jurisdiction, including plant size, date of decommissioning, and configuration of the nuclear component (single or multiple units). It also must decide on proper contingency factors, estimation methodology, the likelihood of early retirement, and whether fund accumulations will include amounts for the removal of nonradioactive components and site restoration. In this chapter the authors discuss the results of their survey of how 37 state utility commissions treat these factors.
DIVIDED AUTHORITY: FEDERAL VS. STATE POLICY ROLES IN DECOMMISSIONING ECONOMICS
Authors: DuBoff Scott M. , Stenger Daniel F.
Published: May 2011

The previous two chapters individually examined the federal and state roles in regulating nuclear power plant decommissioning. In this chapter, attorneys Scott DuBoff and Daniel Stenger take a legal look at these issues, comparing the radiological obligations and responsibilities which dominate at the federal level and the economic obligations and responsibilities which dominate at the slate level. They do this by examining how the NRC addressed the state role in its new rule on decommissioning, and by looking at the applicable regulatory provisions of several states. The authors conclude that the present dual system of regulation presents a potential for conflict on decommissioning economics, particularly with regard to the adequacy of fund accumulation.
APPLYING CONSTRUCTION LESSONS TO DECOMMISSIONING ESTIMATES
Authors: Cantor Robin
Published: May 2011

One of the standard practices in estimating costs for new procedures is to apply past experience. In this chapter, Robin Cantor uses prudency hearings and other data from power plant construction to illuminate some of the pitfalls likely to be encountered in preparing estimates for power plant decommissioning. Two of the most tempting pitfalls are scale and learning economies. She suggests that these presumed economies have had less impact on keeping construction costs down than expected, and that they also are unlikely to have much effect on decommissioning costs. Ignoring such evidence, she suggests, could result in decommissioning cost estimates that are too low and collection strategies that are inadequate. This finding has implications for future generations and future decommissioning options.
Should Carbon Taxes Be Additional to Other Transport Fuel Taxes?
Authors: Newbery David M
Published: May 2011

If transport fuel is taxed as a method of charging for road use and congestion, then, as a first approximation, carbon taxes should be superimposed on the existing taxes and the final price of transport fuel should rise by somewhat more than the carbon tax. If transport fuels are already taxed, the cost of meeting the emissions target will depend sensitively on whether the reduction in CO2 emissions is a proportion from base levels or to a target level, depending on factors other than fuel consumption (GNP or population).
A Short-Run Model of Petroleum Product Supply
Authors: Considine Timothy J.
Published: May 2011

This paper presents a monthly econometric model of petroleum refining supply in the United States. The model is derived using a multiproduct restricted cost function with adjustment costs. The Euler equations are used to estimate the convenience yield from holding inventories. Short-run petroleum product prices are closely related to crude oil costs but the responses vary by product. Shipments and inventory levels are also important factors in short-run price determination. An examination of the distillate fuel oil price surge of December 1989 and the Exxon Valdez accident of March 1989 suggest that shifts in the derived demand for crude oil may be a major factor in the transmission of demand shocks to product prices.
Risk Premiums and Efficiency in the Market for Crude Oil Futures
Authors: Deaves Richard , Krinsky Itzhak
Published: May 2011

The New York Mercantile Exchange's Crude Oil futures contract is investigated for the existence and nature of risk premiums and informational efficiency. During 1983-90, there is some evidence that short-term premiums were positive and covaried with recent volatility. As for efficiency, we find nothing inconsistent with weak-form efficiency, but some apparent violations cf semi-strong efficiency. We argue that, for a number of reasons, such rejections should be interpreted with caution.
Trade Liberalization, Transportation, and the Environment
Authors: Gabel H. Landis , Roller Lars-Hendrik
Published: May 2011

This paper is an empirical study of the consequences of European trade liberalization for international transport demand and its environmental impact. The European market is broken into nine trading blocks, and trade flow equations for 29 industries are estimated for the period 1975-1985. A simulation of the change in volumes of trade by industry and the distances trade goods must move generates an estimate of the increased transport demand in each industry. Data on the modal composition of transportation in each industry then allow an aggregation of demand across industries by transport mode-truck, train, sea, and inland waterway. The study concludes that the greatest increases will be in the demand for international transportation by sea, but that in terms of land-based transportation, there will be a large relative shift from rail to road. This will have a major adverse environmental impact which is discussed in the paper.
Energy Issues in Central and Eastern Europe: Considerations for International Financial Institutions
Authors: Richter Joerg-Uwe
Published: May 2011

This paper reviews the main institutional, economic, and technical issues related to energy sector rehabilitation and development which the countries of Central and Eastern Europe face in the process of economic transformation. These issues concern the institutional weaknesses at the sectoral, subsectoral, and enterprise levels; remaining inadequacies in energy pricing; high energy intensity, low energy efficiency, and the related environmental degradation; and excessive dependence on energy imports from the former USSR. The Governments of the region are determined to introduce the reforms necessary for viable energy development. This is bound to be a substantial task that requires a coherent strategy with consistent policies and institutional measures. The most important ones are: establishing a pro-competition regulatory framework; restructuring energy enterprises, and enhancing the role of the private sector; setting energy prices that reflect economic costs; enhancing energy efficiency and environmental management of energy operations; improving the productivity of energy subsectors and enterprises through rehabilitation and technical modernization; and redirecting energy trade. Energy demand in the region may regain 1990-91 levels by the end of this decade. Nevertheless, investment requirements for rehabilitation and expansion over the next decade may total US$120-150 bn (in 1991 prices and exchange rates) for the region as a whole, which cannot be met without considerable international financial assistance.
Common Carriage and the Pricing of Electricity Transmission
Authors: Doyle Chris , Maher Maria
Published: May 2011

The electric supply industry in Europe is increasingly under pressure to become more competitive. Deregulation and privatisation in the United Kingdom demonstrate the feasibility of this. Draft directives have already been agreed upon by the European Commission to open access in energy markets. We examine the relationship between generators, transmission networks and consumers within a full information static, short-run framework. We show that open access is desirable if accompanied by common carriage and competition in generation. Common carriage is a necessary but not a sufficient condition for efficient outcomes to emerge. We also discuss the pricing of transmission services under conditions of open access and competition in generation.
Energy Intervention After Desert Storm: Some Unfinished Tasks
Authors: Gordon Richard L.
Published: May 2011

Without fanfare, the U.S. government removed many intrusive regulations affecting oil and gas. Much further remains to be done. Regulation of environmental problems and public utilities remains deficient. Special attention is needed to the enthusiasm over the actual U.S. oil stockpiling program and proposed oil-import taxes. The arguments that oil is particularly insecure, that the insecurity produces severe macroeconomic damages, and that oil market policies are the best response are all dubious. In particular, design of such intervention is even more difficult than implementing traditional monetary and fiscal policy. International trade economics warns of the perils of taxing to create or offset monopoly. Stockpiling also is designed to offset the disincentives to private stockpiling created by the tendency to impose price controls during crises. The fear of windfall profits that inspires price controls also discourages stockpile release. Stockpiling thus may not prove helpful. The U.S. establishes goals for its public lands more ambitious than can be attained with the budgets allocated for administration. Reversing the retreat from encouraging sales to the private sector could improve land use.
Imperfect Price-Reversibility of U.S. Gasoline Demand: Asymmetric Responses to Price Increases and Declines
Authors: Gately Dermot
Published: May 2011

This paper describes a framework for analyzing the imperfect price-reversibility (“hysteresis”) of oil demand. The oil demand reductions following the oil price increases of the 1970s will not be completely reversed by the price cuts of the 1980s, nor is it necessarily true that these partial demand reversals themselves will be reversed exactly by future price increases. We decompose price into three monotonic series: price increases to maximum historic levels, price cuts, and price recoveries (increases below historic highs). We would expect that the response to price cuts would be no greater than to price recoveries, which in turn would be no greater than for increases in maximum historic price.

For evidence of imperfect price-reversibility, we test econometrically the following U.S. data: vehicle miles per driver, the fuel efficiency of the automobile fleet, and gasoline demand per driver. In each case, our econometric results allow us to reject the hypothesis of perfect price-reversibility. The data show smaller response to price cuts than to price increases.

This has dramatic implications for projections of gasoline and oil demand, especially under low-price assumptions.
Cuba’s Transition to Market-Based Energy Prices
Authors: Pérez-López Jorge F.
Published: May 2011

Since 1960 the Soviet Union has been, for all practical purposes, Cuba’s exclusive supplier of energy products. For certain time periods, Soviet sales of oil and oil products to Cuba were made at concessional prices; prior to 1991, they were priced using transferable rubles and were essentially bartered for Cuban goods, especially sugar.

Effective January 1, 1991, the Soviet Union shifted to world market prices and convertible currency payments for all traded commodities, including energy products. The shift to market prices and convertible currencies in Cuban-Soviet energy trade has already brought—or is likely to bring—a number of adjustments in four areas: 1) the trade balance; 2) the ability to reexport oil and oil products; 3) energy consumption patterns;. 4) and the structure of energy supplies.
Price and Cost Impacts of Utility DSM Programs
Authors: Hirst Eric
Published: May 2011

More U.S. utilities are running more and larger demand-side management (DSM) programs. Assessing the cost-effectiveness of these programs raises difficult questions for utilities and their regulators. In particular, should these programs aim to minimize the total cost of providing electric-energy services or should they minimize the price of electricity?

Most of the debates about the appropriate economic tests to use in assessing utility programs do not address the magnitude of the impacts. As a result, questions remain about the relationships among utility DSM programs and acquisition of supply resources and the effects of these choices on electricity prices and costs. This study offers quantitative estimates on the tradeoffs between total costs and electricity prices. A dynamic model is used to assess the effects of energy-efficiency programs on utility revenues, total resource costs, electricity prices, and electricity consumption for the period 1990 to 2010. These DSM programs are assessed under alternative scenarios for three utilities: a “base” that is typical of U.S. utilities; a “surplus” utility that has excess capacity, few planned retirements, and slow growth in fossil-fuel prices and incomes; and a “deficit” utility that has little excess capacity, many planned retirements, and rapid growth in fossil-fuel prices and incomes. Model results show that DSM programs generally reduce electricity costs and increase electricity prices. However, the percentage reduction in costs is usually greater than the percentage increase in prices. On the other hand, most of the cost benefits of DSM programs can be obtained without raising electricity prices.