• Energy Research
• Closed Access close
• Embargo close
• economics and business close
• US close
• GB close
• NL close

Abstract International politics affects the oil trade. But do financial and commercial traders who participate in spot oil trading also respond to changes in international politics? We construct a firm-level dataset for all U.S. oil-importing companies over 1986–2008 to examine how these firms respond to increases in “political distance” between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. However, the political pattern of oil imports is not entirely driven by the concerns of hold-up risks, which exist when oil transactions via term contracts are associated with backward vertical FDI that is subject to expropriation. In particular, our results indicate that even financial and commercial traders significantly reduce their oil imports from U.S. political enemies. Interestingly, while these traders diversify their oil imports politically immediately after changes in international politics, other oil companies reduce their oil imports with a significant time lag. Our findings suggest that in designing regulations to avoid harmful repercussions on commodity and financial assets, policymakers need to understand the nature of political risk.

Abstract Numerous countries have set up strategic petroleum reserves (SPRs) in response to oil disruptions since 1970. While numerous studies model such programs, we found few that evaluate SPRs' historical performance. Thus, we evaluate the U.S. SPR's performance by comparing actual real costs with estimated real benefits. From 1976 to 2014, the real U.S. SPR cost was about $219 billion real (2014$) dollars, whereas the real benefit was only $122 billion. Sensitivity testing suggests such negative net benefits are qualitatively robust. However, if world oil demand is extremely inelastic to oil price or GDP is elastic enough to oil price shocks, the estimated U.S. SPR net benefit is positive. Sensitivity testing around total real costs and benefits range from $380 billion to $80 billion. Limited testing of IEA coordinated drawdowns suggests that total U.S. benefits jump from $122 billion to more than $400 billion putting the SPR strongly in the black. Limited testing of private sector inventory changes was more disappointing and tentatively suggests private activities may at times have offset some of the government drawdowns. With 20-20 hindsight, initial experimentation found that better management could have significantly enhanced the value of the U.S. SPR, especially for the 1990-91 disruption.

Abstract The need to shift from a fossil fuel based economy towards a more bio-based economy has received a lot of attention in public debates and policy making in recent years. However, there seems to be some inconsistency in how a bio-based economy is defined as well as how to estimate the size of this bio-based economy. The current article shows, using a Bibliometric analysis, that the topic "bio-based economy" does not come up extensively in the literature by mid 2010. Moreover, it seems that estimating the importance of the whole of a bio-based economy (and thereby not only focusing on one type of production or product) for a region or country is quite rare, besides a few examples. Within Flanders, one such study has been executed by order of the Flemish government. The current article suggests a framework that can be used to estimate the size of the bio-based economy in other regions or countries. It is based on several steps, so called critical points related to conceptualization, disaggregation, information and valuation. The critical points depend on who has and who wants the information, what the context is, what kind of data is available and whether the research should be comparable. The authors suggest that by following their proposed steps, a reliable estimate of the size of the bio-based economy can be calculated.

Abstract Using a binomial probability distribution model this paper creates an endurance index of oil service investor sentiment. The index reflects the probability of the high or low stock price being the close price for the PHLX Oil Service Sector Index. Results of this study reveal the substantial forecasting ability of the sentiment endurance index. Monthly and quarterly rolling forecasts of returns of oil service stocks have an overall accuracy as high as 52% to 57%. In addition, the index shows decent forecasting ability on changes in crude oil prices, especially, WTI prices. The accuracy of 6-quarter rolling forecasts is 55%. The sentiment endurance index, along with the procedure of true forecasting and accuracy ratio, applied in this study provides investors and analysts of oil service sector stocks and crude oil prices as well as energy policy-makers with effective analytical tools.

Abstract This paper examines the determinants of state gasoline consumption per household in the USA using pooled time-series cross-section data for the period 1966–1980. It was found that gasoline price, fuel efficiency of vehicle stock, percentage of population in metropolitan areas, and non-automobile transport modes have negative effects on consumption, while per capita income, number of vehicles, non-agricultural employment per household, age 18–44, warm weather, visits by out-of-state automobiles, and share of buses and trucks have positive effects on consumption. Holding constant the size of vehicle stock and its fuel-efficiency characteristics, the short-run price elasticity of gasoline was found to be -0.321 for the period 1966–1973 and -0.106 for the period 1974–1980. It was also found that gasoline demand experienced a temporary shift both in the intercept and in the price coefficient during the shortages of 1974 and 1979, and had undergone a permanent shift in the same parameters during the post-embargo period.

Abstract In California today nearly 16,000 wind generators are spinning, providing for the electrical needs of roughly one million residents. Yet in 1980, just sixteen years ago, the state was without wind generators, save for a few experimental models. It is time to reflect on this remarkable growth. What caused it? What transformed a “soft energy path” dream into reality? This paper will focus on four central factors: 1) political climate, 2) tax incentives, 3) the PURPA Act of 1978, and 4) a sympathetic public utility commission.

PurposeThis paper aims to examine the complex issue of the social cost of carbon. The authors review the existing literature and the strengths and deficiencies of existing approaches. They introduce a simple methodology that estimates the amount of “legal looting” in the fossil fuel industry as an alternative approach to calculate an unpaid social cost of carbon. The “looting amount” can be defined as society’s failure to charge fossil fuel firms for the damage that their activities cause represents an implied subsidy.Design/methodology/approachThe methodology used in this paper combines decisions in the form of policymakers setting carbon taxes and rational investors investing in carbon emission markets.FindingsThe authors show that the unpaid social cost of carbon in the fossil fuel industry was US$12.7tn over 1995-2013, but may be as high as US$115.5tn.Originality/valueOver the same period, the sum of industry profits, emission trading scheme carbon permit and carbon tax revenue totalled US$7tn, indicating the industry would not be viable if it was made to pay for damages to society.

In this paper, a real-time solar-powered road surveillance system is proposed to detect and report moving vehicles that violate the speed limit. The system is designed to operate as a standalone with no connection to the main power line and the wired communication networks. It is powered by a battery array that is charged through solar panels. The data communication with the authorized remote station is achieved via wireless communication technology. A dedicated digital signal processing chip is used to exploit computationally inexpensive image-processing techniques over the video sequence captured from the fixed position video camera for estimating the speed of the moving vehicles. The moving vehicles are detected by analyzing the binary image sequences that are constructed from the captured frames by employing the interframe difference or the background subtraction techniques. A novel adaptive thresholding method is proposed to binarize the outputs from the interframe difference and the background subtraction techniques. The detected moving vehicles are tracked to estimate their speeds. The images of the speeding vehicles are further analyzed to detect license plate image regions according to the predefined color information of the license plates in Northern Cyprus. The detected license plate image regions are reported to the authorized remote station.

Much of the debate on sustainability is predicated on the belief that environmental demands lead to the production of sustainable technologies that induce environmental benefits. This fails to account for the influential ways technologies are used in practice, and the interactions between users and technologies that shape their environmental effects. This article uses the example of how cars and their drivers together accomplish the practice of driving through their interactions with each other, and explores the implications this has for generating environmental outcomes. We draw on a body of literature that argues how together, users and technologies participate in carrying out practices that actively shape outcomes, and we show how and why this applies to sustainability. The article presents the case of the Toyota Prius, analyzing Toyota’s intent in designing a sustainable car and contrasting it with the perspectives of thirty-eight of its drivers. We find that the possibility for fuel and carbon reduction is coproduced and is a result of complex interactions between technology, drivers, and driving practice.