Forthcoming Issue and Preprints

Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within The Energy Journal.

While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of The Energy Journal. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Energy Journal preprint articles.

Select Issue:

The Energy Journal
Volume 45, Special Issue

Mitigating Climate Change While Producing More Oil: Economic Analysis of Government Support for CCS-EOR

Hossa Almutairi and Axel Pierru

DOI: 10.5547/01956574.44.SI1.halm
View Abstract

By storing CO2 captured from the atmosphere or point sources into oil fields, carbon capture and storage with enhanced oil recovery (CCS-EOR) increases the fields' output by raising reservoir pressures. Since CO2-EOR has been experimented with for decades and the revenues from the additional oil production improve projects' economics, CCS-EOR is the most readily deployable CCS technology. However, government support for CCS-EOR projects is sometimes contested on the grounds that the resulting increase in oil production undermines their environmental benefits. Addressing this concern requires determining the effects of implementing CCS-EOR on global CO2 emissions. This paper presents a simple approach based on a marginal reasoning consistent with economic decision-making. It produces analytical formulas that account for the effects on the global oil market of incentivizing CCS-EOR. In addition, we quantify the volume of oil that can be decarbonized by storing a ton of captured CO2 through EOR from different perspectives. We produce numerical results based on a first-cut calibration. They suggest that, from an economic perspective, CCS-EOR is a technology that mitigates global emissions. However, after accounting for the need to decarbonize the EOR oil, the reduction in emissions is significantly less than the stored quantity of CO2. If fully allocated to oil production, the environmental benefits of capturing a ton of CO2 and storing it through conventional EOR can allow the oil producer to decarbonize 3.4 barrels on a well-to-wheel basis and 14.4 barrels when offsetting its oil-upstream emissions only. Fiscal incentives granted by governments to support CCS-EOR as a climate-change mitigation technology should be sized accordingly. We compare our findings to the size of the subsidy in the revised Section 45Q of the 2022 United States Inflation Reduction Act.

Net-Zero Policy vs Energy Security: The Impact on GCC Countries

Simona Bigerna, Maria Chiara D’Errico, Paolo Polinori, and Paul Simshauser

DOI: 10.5547/01956574.44.SI1.sbig
View Abstract

Gulf Cooperation Council countries have accumulated large oil portfolio revenues. However, the world economy is seeking to reduce carbon emissions, and in turn, its reliance on fossil fuel resources through investments in renewable energy resources. The aim of this research is to analyze oil portfolio risk from an exporters' perspective, highlighting how relevant determinants, such as the increasing penetration of renewables in the importer counterparties, and financial and policy uncertainty, increase the volatility of oil export portfolios.We construct oil portfolios for four Gulf Cooperation Council countries (Kuwait, Oman, Saudi Arabia, United Arab Emirates) from 2008 to 2018, and compute volatility spillovers à la Diebold and Yilmaz. Then, the effects of policy and economic variables on volatility spillover indices are estimated using different panel linear regression models.We find rising renewable market shares significantly affects oil export portfolio risks and reduces adverse impacts on importing countries of oil market fluctuations.

Projecting Saudi Arabia’s CO2 Dynamic Baselines to 2060: A Multivariate Approach

Abdulelah Darandary, Anwar A. Gasim, Lester C. Hunt, and Jeyhun I. Mikayilov

DOI: 10.5547/01956574.45.SI1.adar
View Abstract

Using an econometric model, we generate scenario projections of CO2 emissions under different sets of assumptions on the underlying drivers. These drivers include GDP, the energy price, economic structure, and the underlying emissions trend. Our baseline scenario projects that Saudi CO2 emissions will rise from 540 Mt in 2019 to 621 Mt in 2030 and 878 Mt in 2060. In a high GDP growth scenario, the corresponding numbers for CO2 emissions are 635 Mt in 2030 and 985 Mt in 2060. In contrast, in a low GDP growth scenario, CO2 emissions would grow to 607 Mt in 2030 and 781 Mt in 2060. In an economic diversification scenario, CO2 emissions would grow to 602 Mt in 2030 and 769 Mt in 2060. These projections are 646 Mt and 1096 Mt for the heavy industrialization scenario. Even in our lowest scenario, further efforts are needed to meet the net zero ambition.Keywords: CO2 emissions, Saudi Arabia, baseline scenario, economic structure, economic growth, net-zero target


© 2024 International Association for Energy Economics | Privacy Policy | Return Policy