The energy outlook: combining the options

Where can we get all the energy we will need for the rest of the century to heat our homes, cool our offices, run our hospitals, and keep our factories going? Not from the conventional sources of energy at home and certainly not from foreign oil, say these authors. According to their calculations, U.S. supplies of oil, natural gas, coal, and nuclear power will be inadequate, and U.S. importation policy has already made us dangerously dependent on the unstable, unpredictable Middle East. To lessen our dependence on imported oil, they say, requires a balanced program of adopting reasonable conservation measures, developing solar power, and producing energy from our usual domestic sources under new incentives.     

Chemicals and energy: The next 25 years

The chemical industry can no longer rely on a rapid expansion or production based on a single feedstock. New sources of raw materials and energy will have to be used. The uncertainties include costs, social and political factors, new competitors, and the developing botanical and biochemical technologies. The author examines energy use in the OECD area and discusses the factors affecting energy efficiency. He concludes that the chemical industry is likely to maintain a petrochemical base much longer than might be expected. Although competition from Eastern Europe is imminent, OPEC products are unlikely to have a significant impact before 1987. For the next decade the growth rate of the chemical industry in Western Europe will probably be around 5%. Options after petrochemicals include a return to the pathways used 30 years ago, and the new possibilities promised by the use of shale oil, nuclear power, and natural products. At present oil prices, coal is not competitive above about $\text{\$10}\text{ton}$, and for the rest of the century the upper limit is around $\text{\$20}\text{ton}$.     

Is nuclear fission acceptable?

Fossil fuels, including coal, oil and gas, cannot be counted upon as a major energy fuel resource over a long time period. Given that energy utilisation patterns will not alter from those presently characteristic then only three potential fuel sources currently appear adequate to meet the large part of future requirements. These are solar, nuclear fusion and nuclear fission energy. Of these, nuclear fusion energy remains technically unproved. In the highly developed world nuclear fission appears to have been chosen as the major future energy resource. But many would hold that promotional opportunism of the nuclear establishment rather than merit has served as the basis for this choice.     

The prospects for synthetic fuels in the UK

This is an attempt to answer the question: “What happens when oil and natural gas production start to decline?” Forecasts of the world production and demand for oil and gas are reviewed briefly and it is concluded that large scale production of synthetic oil from coal and oil shale in particular will have to start by about 2000, and that energy intensive processes for the production of fuels such as methanol and hydrogen from non-fossil sources will have to start on a large scale during the period 2000–2030.     

The energy revolution in the USA and the pre-salt reserves in Brazil: Risks and opportunities for the Brazilian petrochemical industry

The petrochemical industry is known for its interrelations with the oil industry. In recent years the world has witnessed the rapid growth of the Chinese economy and an associated surge in demand for petroleum and oil products, alongside the emergence of alternative sources of oil and natural gas to those produced by OPEC (Organization of Petroleum Exporting Countries) and Russia, such as Brazil’s pre-salt reserves and shale gas in the United States. The US is undergoing a veritable energy revolution with its use of unconventional oil and natural gas production techniques in low-permeability reservoirs, chiefly shale gas. Brazil’s prospects as an international player are on the rise thanks to the exploration of oil and natural gas from its pre-salt reserves, which could lead to exports of petroleum of over 2 million barrels/day. All these movements have a direct influence on the petrochemical industry. This article aims to foster discussions about the risks and opportunities facing the Brazilian petrochemical industry with the exploration of oil and natural gas in Brazil and unconventional sources in the United States. Systemic thinking and scenario-based planning were used as the basis for the analysis.     

Exchange rate effect on carbon credit price via energy markets

This paper examines the impact of currency exchange rates on the carbon market. We scrutinize this effect through the European Union Emission Trading Scheme (EU-ETS), which primarily uses two substitutable fossil energy inputs for the generation of electricity: coal and natural gas. The European coal market is directly driven by global coal markets that are denominated in USD, whereas, natural gas is mainly imported from Russia and is denominated in Euros. The impulse response functions of a Structural Vector Autoregression (SVAR) model demonstrate that a shock in the Euro/USD exchange rate can be transmitted through the channel of energy substitution between coal and natural gas, and influence on the carbon credit market.     

European equity markets volatility spillover: Destabilizing energy risk is the new normal

While energy risk is increasingly recognized as a systemic risk, there is limited comprehensive analysis of the risk propagation in regional contexts. In this study, we examine oil and natural gas price changes and shocks in relation to equity market returns and volatility for 24 European Economic Area (EEA) countries. In addition to traditional panel regressions, we also deploy the Diebold-Yilmaz (2014) spillover index for a closed network analysis. We differentiate in the cross-section across the core EU block, PIIGS countries, EU enlargement countries joining after 2004, and other non-EU countries, to provide insights into the ongoing debates on the European energy market stability. While we find evidence of the manifestation of energy risk throughout the sample period, we find that until 2019 the primary sources of volatility spillover in the EEA economic network arose from economic or political uncertainty. Energy risks, measured by large crude oil and natural gas price shocks also significantly contributed to equity market volatility, with increasing volatility risk arising from natural gas, a green labelled energy source after 2019. Last, we show that CEEC equity markets are more sensitive to oil and natural gas price shocks when domestic currencies depreciate against the Euro.     

Review and Assessment of Chinese Energy Policy Since the Reform and Opening Up

Since carrying out reforms and launching its “opening up” policy in the late 1970s, the Chinese government has issued a series of energy policies that has increased China’s total energy supply, optimized the energy structure, and improved energy efficiency. China’s total energy supply increased from 627.7 million tons of standard coal equivalent to 3.2 billion tons from 1978 to 2011, an average annual growth rate of 5 percent. The structure of China’s energy supply is improving gradually, with natural gas accounting for 4.3 percent of the total energy production in 2011 compared to 2.9 percent in 1978. The proportion of hydroelectric, nuclear, and wind power increased from 3.1 percent in 1978 to 8.8 percent in 2011. China’s energy efficiency continues to improve, with the amount of standard coal equivalent required to produce RMB 10,000 of gross domestic product decreasing from 15.68 tons in 1978 to 0.74 in 2011. The development of China’s energy structure not only has guaranteed national economic and social development but has also made a great contribution to world energy security.     

Rating of worry about energy sources with respect to public health,environmental health,and workers

Environmental risks of different energy sources pose a significant problem for managers, decision-makers, and the general public. Attitudes and perceptions may differ by type of energy, as well as the recipient of the harm. A post-Fukushima survey of students and others in a university community in central New Jersey was conducted to determine how much people worried about the potential effects of different energy types (nuclear, chemical, coal, hydroelectric, solar, wind, and gas), which aspect they worried about (public health, workers, and the environment), and which form they thought the USA should further develop. Ratings for worry varied significantly by energy type and receptor type. In general, worry was greater for all aspects of chemical, coal, nuclear, and gas, and significantly less for hydro, solar, and wind. Worry was generally higher for exposure from the plant, exposure from food and water, exposure to workers, and exposure for wildlife than for either transportation issues or exposure from everyday occurrences. The same exposures (or targets) were rated for each energy source. The greatest worry for each energy type was as follows: (1) nuclear exposure to radiation in food, although worker exposure and exposure from the plant were very close, (2) chemical exposure was from accidents in the plant, (3) coal was from harmful effects of mercury on wildlife, (4) hydro was from contamination of drinking water, (5) solar was from harmful UV radiation exposure in wildlife, (6) wind was from mortality of birds due to wind turbines, and (7) gas was from harmful gas exposure to wildlife. Overall, the highest rated features in terms of worry (four of seven energy forms) were for wildlife. The survey population believed that wind, solar, tidal, and hydro power should be developed further, and coal should be developed the least.     

煤层气投资千亿扩张

虽然没有完成上个5年的产业发展规划目标,中国煤层气(煤矿瓦斯,常规天然气)的"十二五"规划保持了对煤层气发展前景的信心,提出了更高的发展目标:累积利用目标调高至"十一五"规划的7倍。这个目标大大超出此前业界的预期,也反映出中国能源管理层希     

Dynamic volatility spillovers across oil and natural gas futures markets based on a time-varying spillover method

This paper analyzes dynamic volatility spillovers between four major energy commodities (i.e., crude oil, gasoline, heating oil and natural gas) in the oil-natural gas future markets. We construct a time-varying spillover method by combining the TVP-VAR-SV model and the spillover method of Diebold and Yilmaz (2009, 2012, 2014). We use the spillover method to obtain time-varying total, directional and pairwise volatility spillover indices. Our results summarize as follows: (1) The volatility spillover indices present peaks and troughs during some periods, such as shale gas revolution, financial crisis, and oil price crash; (2) After the U.S. shale gas revolution, the size of volatility spillover from natural gas future market has reduced sharply, but volatility doesn't decouple from the other three oil future markets; (3) The directional spillover is asymmetric. The crude oil and heating oil futures market are main net transmitter of volatility risk information, while the gasoline and natural gas futures markets are the net receiver; (4) For natural gas future market, the pairwise volatility spillover from crude oil future market has the most significant influence.     

Pulling up the tarnished anchor: The end of silver as a global unit of account

We use the demise of silver-based standards in the 19th century to explore price dynamics when a commodity-based money ceases to function as a global unit of account. We develop a general equilibrium model of the global economy with gold and silver money. Calibration of the model shows that silver ceased functioning as a global price anchor in the mid-1890s—the price of silver is positively correlated with agricultural commodities through the mid-1890s, but not thereafter. In contrast to Fisher (1911) and Friedman (1990), both of whom predict greater price stability under bimetallism, our model suggests that a global bimetallic system, in which the gold price of silver fluctuates, has higher price volatility than a global monometallic system. We confirm this result using agricultural commodity price data for 1870–1913.     

Can energy predict the regional prices of carbon emission allowances in China?

The carbon emission trading is an important market-oriented tool in the process of China's carbon neutrality, which makes companies face tremendous pressure to reduce emissions while having strong energy demands. In order to evaluate whether energy prices can be robust predictors of the prices of emission allowances, this study perform extreme bounds analysis (EBA) in four representative markets. The empirical results reveal that energy prices can indeed predict the prices of emission allowances, but the robustly predictive capabilities of different energy prices vary with regions. Among them, thermal coal is the robustly positive predictor for Guangdong, Hubei and Shanghai market; natural gas is the robustly negative predictor for all the four chosen regions; and crude oil can only positively predict Hubei market with robustness. Meanwhile, the horizons that predictions from energy to emission allowance can be performed as well as the predictive coefficients also vary with energy types and regions. And some trading implications are also provided alongside.     

A time–frequency comovement and causality relationship between Bitcoin hashrate and energy commodity markets

This study examines time–frequency relationship between Bitcoin prices and Bitcoin mining based on daily data from January 2013 to October 2018. Bitcoin mining is measured through Bitcoin hashrate, which represents the completion speed of the Bitcoin code. We also include three energy commodities, i.e. oil, coal, and gas in a multivariate model employing time–frequency wavelet extensions in the form of partial and multivariate models. Results of our study suggest that both oil and gas lead Bitcoin returns from mid 2014 till 2016 across 64– 128 days' period. Under the investment period of 64– 256, hashrate and Bitcoin returns share significant comovement in the presence of oil and natural gas however exhibit no comovement when the effect of coal market is considered. Our results of wavelet decomposition suggest that the magnitude of comovement ranging from short- to long-run is time varying. Finally, results of the causality on quantile test suggest that Bitcoin returns cause changes in Bitcoin hashrate mostly during median quantiles with an asymmetric pattern. Our work entail implications for investors in the Bitcoin and energy market and is also helpful in forecasting the pricing behavior of Bitcoin using the hashrate and vice versa.     

Was America born capitalist? A counter view

This paper is a response to Part 1 of Rob Bryer's analysis of American business consciousness in the period prior to the mid-1800s. It argues that RB's historical model for tracking the transition to capitalism in the US based on accounting signatures is too simplistic, and that the evidence he presents is ambiguous, relying as it does on the interpretation of secondary sources. The paper questions RB's unique definition of capitalism as well as his conception of a clear point of divide between the capitalist and pre-capitalist worlds, and argues that the capitalist mentality or spirit existed in America long before the early 20th century based on current evidence.     

Risk transmission from the energy markets to the carbon market: Evidence from the recursive window approach

The carbon market is an emerging trading system in the financial services sector, with its global market value increasing from $150 billion in 2010 to $851 billion in 2021. In this study, we examined the volatility transmission from the energy markets (i.e., crude oil, coal, natural gas, and biofuel) to the carbon market in Europe. Our sample period ranged from March 25, 2008, to July 17, 2020, and covered phases of different market conditions. We employed an asymmetric and unrestricted version of the bivariate GARCH-in-mean model, assuming flexible distributions within the recursive window framework. Our empirical findings indicate that (1) carbon market returns are negatively and significantly influenced by crude oil and coal market uncertainties, (2) carbon market volatility is significantly affected by crude oil and coal market volatilities, and (3) the biofuel market does not have a significant relationship with the carbon market, probably because the biofuel market is still young and immature. The results of our study could aid carbon market participants in better understanding the information and risk spillover mechanisms from the energy market to the carbon market and provide them with a basis to formulate policies and make decisions on risk management and portfolio optimization.     

Two scenarios for Europe: “Europe confronted with high energy prices” or “Europe after oil peaking”

A significant change in trends regarding energy prices (in particular oil) has taken place in 2003 at the beginning of the Iraq War. It has revealed a very strong tension between oil prices on the one hand and the relationship between global oil supply and demand on the other. The strong growth rates of emerging economies up to 2008 have generated a very sharp increase in oil prices. The temporary economic recession of 2008-2009 has resulted in turn into a significant decrease of oil prices, down to a level which remained, however, twice as high as that of early 2003. With the economy recovering from the recession, it is highly probable that energy prices will continue to increase and that Europe will be confronted with high energy prices in the coming decades. Against this general background, two scenarios have been elaborated which differ mainly by the time of occurrence of oil peaking.¹ The differences between the scenario hypotheses are therefore differences of context in relation to exogenous factors. Policies are also considered in the scenarios, but they are not at the forefront and their impact is considered as limited in relation to that of exogenous factors.The first scenario “Europe in a context of high energy price” assumes that the process of oil peaking will not take place before 2030, but that oil price increase will nevertheless be sustained and substantial until then. Numerous adjustments will have to be made in the economy and their territorial impacts will be significant (less polycentricity, more compact cities, decline of the importance of road and air transport). The second scenario “Europe after oil production peaking” assumes that oil production will peak around the mid-2010s (followed by gas production peaking around 2025), despite significant investments to increase production. In a context of steadily growing oil and gas demand, Europe will be confronted with serious economic difficulties. The territorial impacts will be different from those suggested by the first scenario, with stronger pressure put on rural areas and a loss of attractiveness of large cities related to increasing unemployment and social tensions. In both scenarios, the countries of central and eastern Europe will be more severely hit by the new energy context.The scenarios were elaborated in 2005 and slightly reviewed in 2009 in order to take account of the impacts of the economic recession in Europe and of the growing concerns about climate change.     

Time-varying linkages between energy and stock markets: Dynamic spillovers and driving factors

Integration between international energy prices and stock market returns is critical for global economics and politics. In this study, we employ a TVP-VAR (time-varying parameter vector autoregression) connectedness decomposition approach to investigate the time-varying linkages between a diversified energy portfolio comprising oil, coal, natural gas, and stock returns in G7 countries and China. This approach allows us to show the dynamic spillovers and explore the driving factors underlying the dynamic patterns. We find that geopolitical risks, global economic policy uncertainties, and equity market volatility can influence cross-market spillovers. This study expounds the effect of energy financialization.     

Does the connectedness among fossil energy returns matter for renewable energy stock returns? Fresh insights from the Cross-Quantilogram analysis

The response of renewable energy stock returns to the dynamics of fossil energy markets is a vital concern of low-carbon transitions. There is still sparse literature documenting the directional dependence of renewable energy stock returns on the connectedness among fossil energy returns, even though previous studies have examined the relationship among renewable energy stocks and fossil energy markets. Additionally, the conclusions of prior studies are quite far from reaching a consensus regarding the relationship between the renewable energy stock and the fossil energy markets. To this end, by using the TVP-VAR based connectedness approach and Cross-Quantilogram techniques, this study does the first attempt to unpack the complicated and controversial directional dependence of renewable energy stock returns on the returns and connectedness of fossil energy markets, considering various market conditions and time horizons. The empirical analysis demonstrates that, first, the directional dependence of renewable energy stock returns on fossil energy returns is pronounced during extreme market conditions, whereas they appear to be decoupled from fossil energy returns during normal market conditions. Second, the total connectedness between fossil energy returns transmits a substantial shock to renewable energy stock returns during most market conditions, which is in stark contrast to the information transmission directly originating from fossil energy markets. The performance of renewable energy stock markets improves with stronger fossil energy return connectedness, whereas weaker fossil energy return connectedness hinders it. Additionally, further study reveals that the directional dependence of renewable energy stock returns on the net connectedness of the crude oil market is dominated by negative dependence when the net connectedness of the crude oil market is low, whereas it displays positive dependence when the net connectedness of the crude oil market is high. This directional dependence pattern on the net connectedness of the crude oil market is opposite to that exhibited in the net connectedness of the coal and natural gas markets. Third, in general, the directional dependence of renewable energy stock returns on fossil energy returns is more pronounced in the short term but diminishes over the medium and long terms. Conversely, the directional dependence of renewable energy stock returns on fossil energy return connectedness persists over the medium and long terms. Final, with the outbreak of the Global Financial Crisis during 2007–2008, we notice an abrupt jump in the directional dependence of renewable energy stock returns on fossil energy returns and their connectedness, particularly during extreme market conditions. Our findings provide noteworthy implications for energy transformation, energy security, and climate mitigation.     

Traditional energy resources : Present state and future development

In the United Kingdom, in particular, the difficulty of reconciling short-term economic and commercial objectives with long-term technical and supply problems has been complicated by new elements: the nuclear energy programme, the discoveries of natural gas and the extension of off-shore oil exploration. The situation is further complicated when the energy problems of the third world are considered, for world consumption will reach astronomical proportions if it were to approach the current North American level. The most hopeful feature of the energy situation is that its seriousness is now being realised.