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The Energy Journal
Volume 4, Number 3

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The International Energy Investment Dilemma

Paul Tempest

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-1
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There never has been a global energy market. What there is, at the consumer end, is an amalgam of national energy systems developed from local resources onto which have been grafted various energy imports. Of these, the only truly internationally traded energy commodity is oil. For their base-load energy needs, most national economies have relied on committed systems of domestic supply usually embedded deeply in their own public utility infrastructure and industrial systems. The prices to the consumer of all these forms of energy are heavily masked by subsidy, taxation, and other forms of government control. The availability of domestic energy varies greatly from country to country. There are therefore great variations between countries (and also within countries) in the resource cost of energy and the price to the consumer.

The Impact of the Oil Price Decline on the Soviet Union and Eastern Europe

Jan Vanous

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-2
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The effects on the Soviet Union and Eastern Europe of the decline in the world market price of oil (and the subsequent likely decline in international prices of natural gas and coal) can be divided into three groups: direct, or first-round effects-the impact of the decline in net hard-currency export revenue/net import outlays for oil and other types of energy;"spillover" effects-the impact of potential Soviet cutback in the quantity of energy sold to Eastern Europe for nonconvertible rubles and at preferential prices; indirect, or secondary effects-the impact of oil price cuts on world market interest rates and thus the cost of debt servicing; the impact on Western economic recovery and thus the demand for imports from the Eastern bloc, and so on.

Global Energy and CO2 to the Year 2050

Joe Edmonds and John Reilly

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-3
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One of the important by-products of the combustion of fossil fuelsis carbon dioxide (C02), a nontoxic, colorless gas with a faintly pungent odor and acid taste. Carbon dioxide is not commonly thought of as apollutant. Rather, COs plays an important role in the determination of the global climate. The presence of C02 in the atmosphere produces a "greenhouse effect," allowing incoming sunlight to penetrate but trapping heatradiated back from earth. Man's ability to significantly affect COs levels through use of fossil fuel gives rise to the possibility of climate change atunprecedented rates.

Oil Stockpiling: Help Thy Neighbor

William W. Hogan

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-4
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Saudi benevolence apart, a large inventory of oil is the most effective emergency tool that oil-importing nations could fashion. Long ago, Joseph advised the Pharaoh to prepare for famine by storing during times of plenty. Today virtually every study of policy options for oil supply emergencies emphasizes the value of building and using a large stock of oil to cushion the effects of a sudden loss in supply. And among the array of official pronouncements and promises, oil stockpiling stands out as the most visible and substantial arena of government activity in energy policy, where new institutions and resources have been deployed in the halting beginnings of a coordinated international stockpiling program. The Strategic Petroleum Reserve (SPR) and similar efforts have achieved primacy in the analysis and implementation of oil emergency policy.

Energy Demand Elasticities in Industrialized Countries: A Survey

George Kouris

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-5
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A high price elasticity for energy demand implies a long-term ability of the economy to absorb the impact of higher energy prices. Thus price shocks, after generating pronounced inflationary and recessionary effects over the short term, do not act as a constraint to economic growth over the longer term. By contrast, a low price elasticity implies weak reactions to increasing energy costs and a protracted adverse effect on output and inflation. Unfortunately, a survey of the literature on energy demand elasticities shows diverse results. Should econometric results be used for policymaking and planning, then a critical and eclectic attitude is imperative to screen out the most relevant aspects of the empirically determined price elasticities.


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