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on Energy Economics |
| By: | Paulson, Nicholas D.; Ginder, Roger |
| Abstract: | The biodiesel industry in the United States has realized significant growth over the past decade through large increases in annual production and production capacity and a transition from smaller batch plants to larger-scale continuous producers. The larger, continuous-flow plants provide operating cost advantages over the smaller batch plants through their ability to capture co-products and reuse certain components in the production process. This paper uses a simple capital budgeting model developed by the authors along with production data supplied by industry sources to estimate production costs, return-on-investment levels, and break-even conditions for two common plant sizes (30 and 60 million gallon annual capacities) over a range of biodiesel and feedstock price levels. The analysis shows that the larger plant realizes returns to scale in both labor and capital costs, enabling the larger plant to pay up to $0.015 more per pound for the feedstock to achieve equivalent return levels as the smaller plant under the same conditions. The paper contributes to the growing literature on the biodiesel industry by using the most current conversion rates for the production technology and current price levels to estimate biodiesel production costs and potential plant performance, providing a useful follow-up to previous studies. |
| Keywords: | biodiesel, biofuels, feedstock, production costs, return on investment. |
| Date: | 2007–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12813&r=ene |
| By: | Elobeid, Amani; Tokgoz, Simla; Hayes, Dermot J.; Babcock, Bruce A.; Hart, Chad E. |
| Abstract: | The ongoing growth of corn–based ethanol production raises some fundamental questions about what impact continued growth will have on US and world agriculture. Estimates of the long–run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas and distillers grains stay at current levels, then the break–even corn price is $4.05 per bushel. A multi–commodity, multi–country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn–based ethanol production would reach 31.5 billion gallons per year. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. The demand for biotech corn varieties that allow for continuous corn production would increase dramatically as would the demand for corn, soybean, and wheat varieties that can be grown in marginal areas. |
| Keywords: | biofuels, commodity markets, corn price, energy markets, ethanol. |
| Date: | 2007–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12717&r=ene |
| By: | Emek Baris Kepenek |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:met:stpswp:0611&r=ene |
| By: | Kilian, Lutz; Rebucci, Alessandro; Spatafora, Nikola |
| Abstract: | This paper studies the effects of demand and supply shocks in the global crude oil market on several measures of countries’ external balance, including the oil trade balance, the non-oil trade balance, the current account and changes in net foreign assets (NFA) during 1975–2004. We explicitly take a multilateral and global perspective. In addition to the United States, the Euro area and Japan, we consider a number of regional aggregates including oil-exporting economies and middle-income oil-importing economies. Our first result is that the effect of oil shocks on the merchandise trade balance and the current account, which depending on the source of the shock can be large, depends critically on the response of the non-oil trade balance, and differs systematically between the United States and other oil importing countries. Second, using the Lane-Milesi-Ferretti NFA data set, we document the presence of large and systematic (if not always statistically significant) valuation effects in response to oil shocks, not only for the United States, but also for other oil-importing economies and for oil exporters. Our estimates suggest that increased international financial integration will tend to cushion the effect of oil shocks on NFA positions for major oil exporters and for the United States, but may amplify it for other oil importers. |
| Keywords: | Balance of payments; External balances; International financial integration; Oil demand shocks; Oil prices; Oil supply shocks |
| JEL: | F32 F36 O16 O57 Q43 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6303&r=ene |
| By: | Jan-Peter Olters |
| Abstract: | Buoyant oil prices have allowed oil-producing countries in sub-Saharan Africa (SSA OPCs) to increase oil exports and fiscal revenues, providing them with resources necessary to address the pressing social needs. To preclude another boom-bust cycle, this paper advocates the definition of a fiscal benchmark anchored in sustainability grounds, following Leigh- Olters (2006). The difference between current primary deficits and those that could be maintained after oil reserves are exhausted represent an indication of the degree to which fiscal positions will have to be adjusted-either gradually, while the overall balances remain in surplus, or abruptly, once oil revenues begin to dwindle. |
| Date: | 2007–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/107&r=ene |
| By: | Nienke Oomes; Katerina Kalcheva |
| Abstract: | In this paper, we assess whether recent economic developments in Russia are symptomatic of Dutch Disease. We first provide a brief review of the literature on Dutch Disease and the natural resource curse. We then discuss the symptoms of Dutch Disease, which include (1) real exchange rate appreciation; (2) slower manufacturing growth; (3) faster service sector growth; and (4) higher overall wages. We test these predictions for Russia while carefully controlling for other factors that could have led to similar symptoms. We conclude that, while Russia has all of the symptoms, the diagnosis of Dutch Disease remains to be confirmed. |
| Date: | 2007–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/102&r=ene |
| By: | Joshua D. Angrist (MIT, NBER and IZA); Adriana D. Kugler (University of Houston, NBER, CEPR and IZA) |
| Abstract: | Natural and agricultural resources for which there is a substantial black market, such as coca, opium, and diamonds, appear especially likely to be exploited by the parties to a civil conflict. Even legally traded commodities such as oil and timber have been linked to civil war. On the other hand, these resources may also provide one of the few reliable sources of income in the countryside. In this paper, we study the economic and social consequences of a major exogenous shift in the production of one such resource - coca paste - into Colombia, where most coca leaf is now harvested. Our analysis shows that this shift generated only modest economic gains in rural areas, primarily in the form of increased selfemployment earnings and increased labor supply by teenage boys. The results also suggest that the rural areas which saw accelerated coca production subsequently became more violent, while urban areas were affected little. The acceleration in violence is greater in departments (provinces) where there was a pre-coca guerilla presence. Taken together, these findings are consistent with the view that the Colombian civil conflict is fueled by the financial opportunities that coca provides, and that the consequent rent-seeking activity by combatants limits the economic gains from coca cultivation. |
| Keywords: | rural development, economic shocks, civil war, illegal drugs |
| JEL: | Q34 O13 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2790&r=ene |
| By: | B. MERLEVEDE; K. SCHOORS; B. VAN AARLE |
| Abstract: | This paper develops and estimates a small macroeconomic model of the Russian economy. The model is tailored to analyze the impact of the oil price, the exchange rate, private sector confidence and fiscal policy on economic performance. The model does very well in explaining Russia’s recent economic history in the period 1995-2004. Simulations suggest that the Russian economy is vulnerable to downward oil price shocks. We substantiate two mechanisms that mitigate the economic effects of oil price shocks, namely the stabilisation brought by the Oil Stabilisation Fund and the Dutch disease effect. The negative effect of a shock in private sector confidence on real GDP is comparable to the effect of an oil price shock, although the transmission of both shocks runs along different channels. The fiscal policies of the Putin administration temper economic fluctuations caused by oil price shocks, but it remains to be seen whether these policies will be continued. |
| Keywords: | Russia, Macroeconomic Modeling, Macroeconomic stabilization |
| JEL: | C70 E17 E58 E63 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:07/461&r=ene |
| By: | Nadeem Ilahi; Ghiath Shabsigh |
| Abstract: | Oil funds have become increasingly popular in oil exporting countries during the recent surge in oil prices. However, the literature on the contribution is small, tends to focus narrowly on their fiscal benefits, and concludes that they are redundant of such funds-in other words, that well designed fiscal management and policy are adequate substitutes for oil funds. This paper argues that a broader focus is needed in judging the effectiveness of such funds. We test whether oil funds help reduce macroeconomic volatility. The econometric estimation results from a 30-year panel data set of 15 countries with and without oil funds suggest that oil funds are associated with reduced volatility of broad money and prices and lower inflation. However, there is a statistically weak negative association between the presence of an oil fund and volatility of the real exchange rate. |
| Date: | 2007–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/96&r=ene |
| By: | Christian Huurman (Financial Engineering Associates); Francesco Ravazzolo (Erasmus Universiteit Rotterdam); Chen Zhou (Erasmus Universiteit Rotterdam) |
| Abstract: | In the literature the effects of weather on electricity sales are well-documented. However, studies that have investigated the impact of weather on electricity prices are still scarce (e.g. Knittel and Roberts, 2005), partly because the wholesale power markets have only recently been deregulated. We introduce the weather factor into well-known forecasting models to study its impact. We find that weather has explanatory power for the day-ahead power spot price. Using weather forecasts improves the forecast accuracy, and in particular new models with power transformations of weather forecast variables are significantly better in term of out-of-sample statistics than popular mean reverting models. For different power markets, such as Norway, Eastern Denmark and the Netherlands, we build specific models. The dissimilarity among these models indicates that weather forecasts influence not only the demand of electricity but also the supply side according to different electricity producing methods. |
| Keywords: | Electricity prices; forecasting; GARCH models; weather forecasts |
| JEL: | C53 G15 Q40 |
| Date: | 2007–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070036&r=ene |
| By: | Stefan Baumgärtner (Centre of Sustainable Management, Leuphana University of Lüneburg); Frank Jöst (Alfred-Weber-Institute of Economics, Universtity of Heidelberg); Ralph Winkler (Center of Economic Research,ETH Swiss Federal Institute of Technology) |
| Abstract: | We analyze the optimal dynamic scale and structure of a two-sector-economy, where each sector produces one consumption good and ons specific pollutant. Both pollutants accumulate at different rates to stocks which damage the natural environment. This acts as a dynamic driving force for the economy. Our analysis shows that along the optimal time-path (i) the overall scale of economic acticity may be less than maximal; (ii) the time sclae economic dynamics (change of scale and structure) is mainly determined by the lifetime of pollutNTS, their harmfulness and the discount rate; and (iii) the optimal control of economic scale and structure may be non-monotonic. These results raise important questions about the optimal design of environmental policies. |
| Keywords: | dynamoic economy-environment interaction, multi-pollutant emissions, non-monotonic control, optimal scale, stock pollution, structural change, time scale |
| JEL: | Q20 O10 O41 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:50&r=ene |
| By: | Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Budy P. Resosudarmo (Australian National University) |
| Abstract: | This paper analyses the distributional impact of carbon tax in Indonesia, one of the largest carbon emitter developing countries. Using a Computable General Equilibrium (CGE) model with disaggregated households, the result suggests that in contrast to most studies from industrialised countries, the introduction of carbon tax in Indonesia is not necessarily regressive. Its structural change and resource reallocation effect, following the carbon tax, is in favor of factors endowed more proportionately by rural, and lower income households. In addition, the expenditure of lower income households, especially in rural area, are less sensitive to the prices of energy-related commodities. Revenue-recycling through uniform reduction in commodity tax rate may reduce the adverse aggregate output effect, whereas uniform lumpsum transfers may enhance the progressivity. This study demonstrates an example, that encouraging developing countries to reduce carbon emission, may not only increase the efficiency of carbon abatement globally, but also have desirable distributional implication in the developing countries themselves. |
| Keywords: | Carbon Tax, Climate Change, Distribution, CGE, Indonesia |
| JEL: | D30 D58 Q40 Q48 Q54 Q56 Q58 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:200705&r=ene |