Implications of Natural Gas Shortage For Industrial Demand and the Environment (original) (raw)
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Energy Economics, 2007
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Estimating Industrial Natural Gas Demand Elasticities in Selected OECD Countries
Energy Economics Letters, 2019
Contribution/Originality: This documents contribution to provide recommendations on energy policy in Indonesia with several energy policy references in other countries. The recommendation is to limiting the use of subsidized fuel with direct and closed distribution (learning from India), adjusting subsidized retail prices, and in line with affordable public transportation. 1. INTRODUCTION It is, of course, necessary to implement an environmental policy to save lives, but we need to look at this prospect from the perspective of the history of human civilization by using economic considerations. High-quality environmental demands are increasingly pushing the economy to play a role in policies on new standards, licensing, and taxation systems. Building arguments require coherent data and accurate information to predict the impact of an environmental policy. Thus, any environmental policy that has shown little tangible benefits will be increasingly difficult to replace (Hahn, 2000). Developing a policy takes a long time because it involves the use of various instruments relating to the field of environment and a cost-effectiveness analysis or cost-benefit analysis (Morgenstern and Landy, 1997). Decision
MAKARA of Technology Series, 2011
The petroleum fuels (PF) subsidy has long burdens the government spending, and discourages less expensive energy usage such as natural gas (NG). Exporting NG and importing the more expensive PF products cause financial losses to Indonesia. The lack of NG infrastructure is the main hurdle in maximizing domestic NG usage and so does the perception of its high investment costs burdening government spending and pushing the NG transportation cost up. This study calculates the required NG infrastructure and its investments for several levels of PF substitutions up to 2030. To balance the NG demands, the supply from each field and its corresponding infrastructures needed was calculated and optimized using non-linear programming with generalized reduced gradient method to calculate the lowest transportation cost for the consumers. The study shows with a favorable return on investments attractive to private investors, the NG prices can still be put much lower than PF prices, allowing subsidy, import and production cost savings in many sectors. Furthermore, the highest level of substitution scenario needs only US$ 2.07 billion a year investment, very low compare to the current US$ 14.17 billion a year PF and electricity subsidy.
How is demand for natural gas determined across European industrial sectors?
Energy Policy, 2011
This paper estimates the response of manufacturing sectors' natural gas demand to price and output changes. The average response to future changes in absolute and relative prices of the manufacturing industry in an OECD country depends on the mix of manufacturing industries, particularly with respect to energy intensity and substitution opportunities in production. We estimate short and long run demand elasticities using a shrinkage estimator, which allows heterogeneous demand responses across industries for each country. Our results show that price and output elasticities are heterogeneous within the same manufacturing sector across countries. Furthermore, an output contraction due to e.g. demand shocks will generally have larger negative effects on gas demand than increases in natural gas prices.
Energy Economics, 2016
With advances in natural gas extraction technologies, there is an increase in the availability of domestic natural gas, and natural gas is gaining a larger share of use as a fuel in electricity production. At the power plant, natural gas is a cleaner burning fuel than coal, but uncertainties exist in the amount of methane leakage occurring upstream in the extraction and production of natural gas. At higher leakage levels, the additional methane emissions could offset the carbon dioxide emissions reduction benefit of switching from coal to natural gas. This analysis uses the MARKAL linear optimization model to compare the carbon emissions profiles and system-wide global warming potential of the U.S. energy system over a series of model runs in which the power sector is required to meet a specific carbon dioxide reduction target across a number of scenarios in which the availability of natural gas changes. Scenarios are run with carbon dioxide emissions and a range of upstream methane emission leakage rates from natural gas production along with upstream methane and carbon dioxide emissions associated with production of coal and oil. While the system carbon dioxide emissions are reduced in most scenarios, total carbon dioxide equivalent emissions show an increase in scenarios in which natural gas prices remain low and, simultaneously, methane emissions from natural gas production are higher.
Effects of natural gas supply on macro-economics: comparative analysis
International Journal of Ambient Energy, 2018
Energy is the main inputs of products and services. Energy has strategic role at the micro and macroeconomic scales in the countries. Compared with other fossil energy sources, the natural gas has been the most growing one. This fact suggests that understanding the effects of natural gas utilization on the economical situation of different countries is an important subject among researchers and policymakers. This research is conducted to analyze the effect of natural gas supply in the economics of 5 developed, emerging, and developing countries (United States of America, Brazil, Germany and Iran). The countries were selected based on the importance of natural gas in their energy supply. The results show that countries with natural gas sources (Iran and US), are more gas dependent. The reason for high natural gas dependency in Iran is due to lack of effective energy legislation. In other countries (Germany, Brazil and Turkey), the level of development is highly related to natural gas consumption. To sum up, decent natural gas consumption in beneficial sectors can improve countries economic development.
Economic and Environmental Impacts of Methane Emissions Reduction in the Natural Gas Supply Chain
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Chemistry Central Journal, 2012
Natural gas comprises about a quarter of the United States' energy use. It is more environmentally friendly than oil and coal due to lower carbon dioxide (CO 2) emissions per unit, less costly per unit of energy and more readily available domestically in abundant supply. However, due to a number of barriers in the political, infrastructural, pricing and other arenas, the use of natural gas as a significant energy source in the United States has been limited. In our paper, we highlight the favorable qualities of natural gas and its benefits for the consumer, producer, and environment, having compared the costs of the various components of the natural gas business such as drilling and transport to that of coal and oil. Moreover, we touch upon the major issues that have prevented a more prevalent use of the gas, such as the fact that the infrastructure of natural gas is more costly since it is transported though pipelines whereas other energy sources such as oil and coal have flexible systems that use trains, trucks and ships. In addition, the powerful lobbies of the coal and oil businesses, along with the inertia in the congress to pass a national climate change bill further dampens incentives for these industries to invest in natural gas, despite its various attractive qualities. We also include discussions of policy proposals to incentive greater use of natural gas in the future.
A perspective on the economics of natural gas decontrol
FUNDAMENTAL lesson that economic policymakers learned over the past decade is that microeconomic energy policies can have a significant effect on the nation's macroeconomic performance. Early in the decade, price regulation in domestic energy markets led to growing imports of energy and rendered the United States-the world's largest energy producerimpotent to the challenge of the OPEC cartel in determining the prices of the world's energy resources. Subsequent policy efforts to smooth the difficult transition to a world ofhigher-cost energy by preventing any abrupt rise in domestic energy prices reduced the incentive to conserve energy, discouraged domestic energy production, subsidized petroleum imports and increased inefficiencies in the use of domestic energy supplies.