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on Energy Economics |
| By: | Parisio, Lucia; Bosco, Bruno |
| Abstract: | In this paper we derive equilibrium bid functions in isolated domestic electricity markets and then analyse their modifications when cross-border trade among them is managed using the implicit auction method. We show that cross-border trade can induce price convergence across countries and thereby reallocate gains and losses as a result of two concomitant effects: a “volume” effect due to the mere increase/decrease of demand and supply in each market and a “bid effect” due to the modifications of bid functions brought about by interconnection. The latter effect can either contrast or reinforce the former. We derive conditions affecting the net result. |
| Keywords: | Electricity markets; implicit auctions; cross-border trade |
| JEL: | L94 L11 D44 |
| Date: | 2006–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:473&r=ene |
| By: | Bazhanov, Andrei; Vyscrebentsev, Alexei |
| Abstract: | Our approach is based on the use of the Durbin-Watson statistic and other statistical criteria for the specification of the number of the nonlinear summands in the empirical model of M.K. Hubbert. Given alternate criteria we compare the dynamics of extraction over recent years for the USA and Russia. We compare simulated dynamics to data on recoverable oil reserves for recent years. |
| Keywords: | Hubbert’s curve; Durbin-Watson statistic |
| JEL: | Q31 |
| Date: | 2005–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:479&r=ene |
| By: | Razzak, Weshah |
| Abstract: | I argue that state-ownership and state-management of oil on behalf of the Iraqi people is not conducive to democracy and inconsistent with the principles of free market. I also argue that it can adversely affect economic development and might further impoverish the average Iraqi citizen. To resolve the problems, this note proposes a change to the “political” rules; i.e., change the Iraqi constitution, and provides an economic strategy to transfer oil wealth to the Iraqi people. |
| Keywords: | Oil; private ownership; development |
| JEL: | Q43 Q32 P14 Q48 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54&r=ene |
| By: | Gido A.J.F. Brouns; Alexander F. Boogert (School of Economics, Mathematics & Statistics, Birkbeck) |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0615&r=ene |
| By: | Francisco Rodríguez (Department of Economics, Wesleyan University); Adam J. Gomolin (School of Public Policy, University of California, Berkeley) |
| Abstract: | This paper studies the evolution of Venezuelan economic institutions before the emergence of oil exploitation in 1920. We argue that by 1920 Venezuela had developed a highly centralized state and a professionalized military. These two institutions ensured that growing oil revenues would strengthen the state structure and protected Venezuela from the resource-conflict trap into which many oil-abundant countries have fallen. We also argue that the failure to develop institutions that could mediate between sectoral demands and the state, the subordination of property rights to political imperatives and the political dominance of the commercial-financial elite conditioned the nation’s response to the post-1920 influx of oil revenues. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2006-018&r=ene |
| By: | Ruiz, Juan; Vilarrubia, Josep |
| Abstract: | The continued rise in oil prices since 2002 has resulted in a significant increase in export revenue for oil exporting countries. This increase in the price of oil and other commodities means that OPEC countries and Russia have received, between 2003 and 2006, a windfall of 1.3 trillion dollars with respect to their export level in 2002. This paper analyzes, using the limited data available, the recycling of these resources back to the world economy through the trade channel, via higher imports, or the financial channel, via an increase in the net external asset position of these countries. Our results show that around 50% of the windfall revenue has been used to increase imports, while the rest has been directed towards international reserve accumulation and other improvements in the net asset position of these countries. Comparing the current oil price increase with previous ones, such as those resulting from the tightening of oil supply in the 70’s, we find that the trade channel has been more important in the current episode than in previous ones. This can be attributed to (i) the perception of a more permanent increase in the price of oil in the context of rising demand, and (ii) the gradualism of the current oil price increase, which has allowed a stronger response from imports. |
| Keywords: | Oil exporting countries; oil revenues; oil windfall; recycling; trade; imports; exports; reserve accumulation; marginal propensity to import; petrodollars; OPEC; Russia |
| JEL: | F32 Q43 F14 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:429&r=ene |
| By: | Ruiz, Juan; Vilarrubia, Josep |
| Abstract: | The continued rise in oil prices since 2002 has resulted in a significant increase in export revenue for oil exporting countries. This increase in the price of oil and other commodities means that OPEC countries and Russia have received, between 2003 and 2006, a windfall of 1.3 trillion dollars with respect to their export level in 2002. This paper analyzes, using the limited data available, the recycling of these resources back to the world economy through the trade channel, via higher imports, or the financial channel, via an increase in the net external asset position of these countries. Our results show that around 50% of the windfall revenue has been used to increase imports, while the rest has been directed towards international reserve accumulation and other improvements in the net asset position of these countries. Comparing the current oil price increase with previous ones, such as those resulting from the tightening of oil supply in the 70’s, we find that the trade channel has been more important in the current episode than in previous ones. This can be attributed to (i) the perception of a more permanent increase in the price of oil in the context of rising demand, and (ii) the gradualism of the current oil price increase, which has allowed a stronger response from imports. |
| Keywords: | Oil exporting countries; oil revenues; oil windfall; recycling; trade; imports; exports; reserve accumulation; marginal propensity to import; petrodollars; OPEC; Russia |
| JEL: | F32 Q43 F14 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:433&r=ene |
| By: | Jurdziak, Leszek |
| Abstract: | Opencast lignite mine and power plant as a bilateral monopoly in classical solution Based on example of opencast lignite mine and power plant operating on liberalized energy market the classical solution maximizing joint profits of bilateral monopoly has been presented. The graphic solution of finding the optimal quantity of coal production and contract curve has been presented based on demand, marginal revenue and cost curves. The advantage of vertical integration has been shown as well as alternative possibility of finding optimal solution using formula price contracts with agreed profit division. The need of further adaptation of presented classical bilateral model and its solution has been stressed in order to take into account restrictions imposed by the fact that one side of bilateral monopoly is an opencast mine exploiting unique lignite deposit. Usage of mining optimization programs has been proposed to determine supply of coal and cost curves. |
| Keywords: | bilateral monopoly; open pit optimisation; lignite price; contract curve; price negotiation |
| JEL: | L11 L72 D43 L14 |
| Date: | 2006–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:530&r=ene |
| By: | Jurdziak, Leszek |
| Abstract: | Lignite price negotiation between opencast mine and power plant as a two-stage, two-person, cooperative, non-zero sum game. Based on the simple model of the lignite deposit the methodology of finding the optimal solution for bilateral monopoly (BM) of lignite mine and power plant is shown taking into account nested pits generated by the pit optimisation process. It is proposed to treat lignite price negotiation as a kind of two-stage game. In the first step (cooperative) both sides should select the ultimate pit maximising joint profits of BM and in the second one (competitive) the agreement should be achieved regarding profit division. This can be realised through side payments or by establishing the lignite transfer price. Lack of cooperation and opportunism can lead to the suboptimal solution – excavation of the smaller pit. Due to existence of information asymmetry and the mine predominant strategy attainment of the optimal solution is more probably in vertically integrated firms. Dynamic adjustments of LOM BM plan to short-term changes of energy market using optimisation techniques, BM model, game theory and their valuation as real options is the new direction of further research. |
| Keywords: | bilateral monopoly; opencast mine; pit optimisation; price negotiation; |
| JEL: | D86 C71 C78 D42 D82 D74 L94 L22 |
| Date: | 2006–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:478&r=ene |
| By: | Jurdziak, Leszek |
| Abstract: | THE INFLUENCE OF LIGNITE OPENCAST MINE OPTIMISATION ON SOLUTION OF BILATERAL MONOPOLY MODEL OF LIGNITE MINE & POWER PLANT IN LONG RUN The classical and modified solution of bilateral monopoly for the system of opencast mine and power plant has been presented both using graphical and analytical methods. Determined through pit optimization and parameterization the influence of lignite base price on lignite supply in long run and on volatility of nested pits’ parameters (e.g. overburden to coal ratio) and quality of lignite contained in them (calorific value, sulphur and ash content) has been used to find optimal solution for bilateral monopoly: mine & power plant. It was shown that in contrary to the classical solution the modified one is determined not only in area of quantity of intermediate product (lignite) but also in its price. The hypothetical solution for the pit placed on the “Szczerców” deposit has been shown and discussed. |
| Keywords: | bilateral monopoly; open pit optimisation; lignite price; price negotiation; lignite supply; lignite quality; |
| JEL: | L13 L72 D43 L14 |
| Date: | 2006–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:531&r=ene |
| By: | Jurdziak, Leszek; Kawalec, Witold |
| Abstract: | Sensitivity analysis of lignite ultimate pit size and its parameters on change of lignite base price The influence of lignite base price on the size of ultimate pit (lignite supply) and decrease of lignite quality (decrease of calorific value and increase of sulphur and ash content) has been analyzed. The consequence of these changes is the relative decrease of real price of averaged lignite and changes of non-discounted pit cash flows. The influence of lignite base price on strip ratio has also been calculated. The ultimate pit from Lerchs-Grossmann optimization as well as phases from parameterization process conducted in NPVScheduler program has bee used for calculations. The base of analysis was the quality model of “Szczerców” deposit used for creation of value model with usage of price formula taking into account lignite quality parameters. |
| Keywords: | lignite mine; open pit optimisation; lignite price; lignite quality; value model of lignite deposit; long-term lignite supply |
| JEL: | L71 L11 |
| Date: | 2006–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:529&r=ene |
| By: | Jurdziak, Leszek |
| Abstract: | Is vertical integration of mines and power plants profitable and for whom? Based on outcomes from the research of bilateral relation between lignite mines and power plant author describes several benefits from vertical integration including strategic benefits described by Porter and benefits from reduction of transactional costs described by Williamson. Additional benefits can be attained by application of open pit optimisation which leads to the solution of modified bilateral monopoly of lignite mine and power plant. Cooperation can assure joint profits maximisation and rivalry leads to suboptimal solution in Pareto sense. Due to asymmetry of information about the deposit the mine has information advantage and can apply its predominant solution maximising only their own profits in long run. |
| Keywords: | bilateral monopoly; lignite mine; power plant; market structure; trasactional costs; lignite price; price negotiation; strategic benefits; bargaining; cooperative game; Pareto optimality; asymmetry of information |
| JEL: | L22 L94 L11 L72 J52 C78 D43 L14 |
| Date: | 2005–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:534&r=ene |
| By: | Bagliani Marco; Bravo Giangiacomo; Dalmazzone Silvana (University of Turin) |
| Abstract: | Recent research suggests that consumption-based measures offer an insightful perspective on the debate on the relationship between economie growth and the environment. In this article, we deepen the eonsumption-based line of inquiry by investigating the empirical èvidenee in support of the environmental Kuznets hypothesis using 1961-2001 ecological footprint data. We test not only inverted-U and linear functions, but a!so power functions as potentia!ly suitable models to represent the relationship between per capita income and environmental impact. Our results do not show evidence of delinking: the rate of growth of the ecologica! footprint slowly decreases when per capita income increases, but the growth itself never stops. The best model approximating this relationship is therefore not a quadratic but a power function, which does not support the case far indefinite economie growth as a prospective solution to environmental problems. |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200601&r=ene |
| By: | Richard S.J. Tol (Engineering and Public Policy, Carnegie Mellon University); Gary W. Yohe (Economics Department, Wesleyan University) |
| Abstract: | Tol (2003) found evidence that the uncertainty that surrounds estimates of the marginal damage of climate change may be infinite even if total damages are finite and questioned the applicability of expected cost-benefit analysis to global mitigation policy. Yohe (2003) suggested that this problem could be alleviated if international development aid were directed at eliminating the source of the problem – climate induced negative growth rates in a few regions along a handful of troublesome scenarios. The hypothesis about adding a second policy lever to the climate policy calculus is shown to hold, but not as robustly as perhaps expected. Infinite uncertainty and its implications for global mitigation policy can be avoided for a reasonable price in the relatively unlikely event that climate change can cause negative economic growth in a region or two when the portfolio of international policies includes at least two tools. |
| Keywords: | climate policy, development aid, equity weighting, expected cost-benefit analysis |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2005-003&r=ene |