Price and income elasticities of crude oil import demand in South Africa: A cointegration analysis

This paper examines the demand for imported crude oil in South Africa as a function of real income and the price of crude oil over the period 1980–2006. We carried out the Johansen co integration multivariate analysis to determine the long-run income and price elasticities. A unique long-run cointegration relationship exists between crude oil imports and the explanatory variables. The short-run dynamics are estimated by specifying a general error correction model. The estimated long-run price and income elasticities of −0.147 and 0.429 suggest that import demand for crude oil is price and income inelastic. There is also evidence of unidirectional long-run causality running from real GDP to crude oil imports.     

Import demand of crude oil and economic growth: Evidence from India

This study establishes a long-run equilibrium relationship among quantity of crude oil import, income and price of the imported crude in India for the time span 1970–1971 to 2005–2006 using autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Empirical results show that the long-term income elasticity of imported crude in India is 1.97 and there exists a unidirectional long-run causality running from economic growth to crude oil import. So reduction of crude oil import will not affect the future economic growth in India in the long-run. India should take various energy efficiency and demand side management measures in transport sector along with other measures like expanding and strengthening indigenous resource-base, substituting imported fuels by domestic fuels and de-controlling the price of petroleum products to reduce its import dependence.     

Modelling demand for crude oil products in Spain

This paper develops an econometric model for the five most important crude oil products demand in Spain. The aim is the estimation of a range of elasticities of such demands that would serve as the basis for an applied general equilibrium model used for forecasting energy demand in a broader framework. The main distinctive features of the system with respect to previous literature are (i) it takes advantage of monthly information coming from very different information sources and (ii) multivariate unobserved components (UC) models are implemented allowing for a separate analysis of long- and short-run relations. UC models decompose time series into a number of unobserved though economic meaningful components mainly trend, seasonal and irregular. A module is added to such structure to take into account the influence of exogenous variables necessary to compute price, cross and income elasticities. Since all models implemented are multivariate in nature, the demand components are allowed to interact among them through the system noises (similar to a seemingly unrelated equations model). The results show unambiguously that the main factor driving demand is real income with prices having little impact on energy consumption.     

Short- and long-run time-of-use price elasticities in Swiss residential electricity demand

This paper presents an empirical analysis on the residential demand for electricity by time-of-day. This analysis has been performed using aggregate data at the city level for 22 Swiss cities for the period 2000−2006. For this purpose, we estimated two log–log demand equations for peak and off-peak electricity consumption using static and dynamic partial adjustment approaches. These demand functions were estimated using several econometric approaches for panel data, for example LSDV and RE for static models, and LSDV and corrected LSDV estimators for dynamic models. The attempt of this empirical analysis has been to highlight some of the characteristics of the Swiss residential electricity demand. The estimated short-run own price elasticities are lower than 1, whereas in the long-run these values are higher than 1. The estimated short-run and long-run cross-price elasticities are positive. This result shows that peak and off-peak electricity are substitutes. In this context, time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off-peak periods.     

World crude oil and natural gas: a demand and supply model

This paper examines world markets for crude oil and natural gas over the period 1918–1999; it analyzes the time-series properties of output and prices and estimates demand and supply elasticities during 1918–1973 and 1973–1999. Oil and gas prices were stable during the first period; they became volatile afterwards, reflecting deep changes in the market structure following the oil shock in 1973. Demand price elasticities were too low; however, demand income elasticities were high. Supply price elasticities were also too low. The elasticity estimates help to explain the market power of the oil producers and price volatility in response to shocks, and corroborate elasticity estimates in energy studies.     

ARIMA forecasting of primary energy demand by fuel in Turkey

Forecasting of energy demand in emerging markets is one of the most important policy tools used by the decision makers all over the world. In Turkey, most of the early studies used include various forms of econometric modeling. However, since the estimated economic and demographic parameters usually deviate from the realizations, time-series forecasting appears to give better results. In this study, we used the Autoregressive Integrated Moving Average (ARIMA) and seasonal ARIMA (SARIMA) methods to estimate the future primary energy demand of Turkey from 2005 to 2020. The ARIMA forecasting of the total primary energy demand appears to be more reliable than the summation of the individual forecasts. The results have shown that the average annual growth rates of individual energy sources and total primary energy will decrease in all cases except wood and animal–plant remains which will have negative growth rates. The decrease in the rate of energy demand may be interpreted that the energy intensity peak will be achieved in the coming decades. Another interpretation is that any decrease in energy demand will slow down the economic growth during the forecasted period. Rates of changes and reserves in the fossil fuels indicate that inter-fuel substitution should be made leading to a best mix of the country's energy system. Based on our findings we proposed some policy recommendations.     

The efficiency of the crude oil markets: Evidence from variance ratio tests

This study examines the random walk hypothesis for the crude oil markets, using daily data over the period 1982–2008. The weak-form efficient market hypothesis for two crude oil markets (UK Brent and US West Texas Intermediate) is tested with non-parametric variance ratio tests developed by [Wright J.H., 2000. Alternative variance-ratio tests using ranks and signs. Journal of Business and Economic Statistics, 18, 1–9] and [Belaire-Franch J. and Contreras D., 2004. Ranks and signs-based multiple variance ratio tests. Working paper, Department of Economic Analysis, University of Valencia] as well as the wild-bootstrap variance ratio tests suggested by [Kim, J.H., 2006. Wild bootstrapping variance ratio tests. Economics Letters, 92, 38–43]. We find that the Brent crude oil market is weak-form efficiency while the WTI crude oil market seems to be inefficiency on the 1994–2008 sub-period, suggesting that the deregulation have not improved the efficiency on the WTI crude oil market in the sense of making returns less predictable.     

Ant colony optimization approach to estimate energy demand of Turkey

This paper attempts to shed light on the determinants of energy demand in Turkey. Energy demand model is first proposed using the ant colony optimization (ACO) approach. It is multi-agent systems in which the behavior of each ant is inspired by the foraging behavior of real ants to solve optimization problem. ACO energy demand estimation (ACOEDE) model is developed using population, gross domestic product (GDP), import and export. All equations proposed here are linear and quadratic. Quadratic_ACOEDE provided better-fit solution due to fluctuations of the economic indicators. The ACOEDE model plans the energy demand of Turkey until 2025 according to three scenarios. The relative estimation errors of the ACOEDE model are the lowest when they are compared with the Ministry of Energy and Natural Resources (MENR) projection.     

A supply model for crude oil and natural gas in the Middle East

Crude oil (CO) and natural gas (NG) play an important role in the world economy. The Arab countries (ACs) share 64% of the total oil reserves and 40% of the NG reserves [OPEC, 2003. The Annual Statistical Bulletin]. On the production side, ACs contribute to 30% and 9% of the world production of CO and NG, respectively. Accurate forecast models are needed to do better planning and create less risky business environment. In this paper, an econometric model is built to capture the behavior of CO and NG production in the ESCWA¹ countries. The model is used to forecast future production trends of CO and NG, and thus provide a powerful tool for researchers, planners and investors working in the energy field.     

Some general equilibrium effects of declining crude oil production in Australia

Crude oil production in Australia is expected to decline significantly during the 1990s. As a result, net imports of crude oil could increase sharply over the period. In this paper, macroeconomic, intersectoral and interindustry effects of a fall in domestic crude oil production are examined. General equilibrium effects are estimated using ORANI, a large multisectoral model of the Australian economy. By itself, the reduction in crude oil production would require restraint in domestic expenditure and a decline in Australia's real exchange rate in order to offset the expected rise in net crude oil imports. Furthermore, a contraction of the domestic oil industry would result in a small decline in gross domestic produce together with an expansion of other import-competing and export industries. It is important to note that other changes in the energy sector, such as the substantial expected increase in production of coal, uranium and LNG over the next decade, have the potential to more than offset the macroeconomic effects of reduced oil production.     

Analysis of Iran's crude oil export future capacity

The paper analyzes Iran's oil export capacity and the factors affecting it. First, the local energy demand is reviewed and crude oil, with 5.7% annual growth rate, is introduced as a major source to respond to the increasing domestic energy demand. Then, the national plans for controlling the local demand and replacing oil with other types of energy carriers are reviewed to create a view over the future of local demand for crude oil in Iran. In the next step, crude oil production and exploration situation in Iran are investigated and the required increase in production to maintain the present level of export is calculated. By estimating the average capital expenditures for adding each barrel of new capacity to Iran's daily oil production, the necessary annual investment to compensate the production drop and domestic consumption growth for maintaining the export is introduced. Then, the future of oil export in Iran is predicted in three optimistic, reference, and pessimistic scenarios on the basis of the country's ability in managing the financial resources in upstream oil industry. Finally, domestic and foreign investment and the history of buyback contracts and their undeniable role in development of Iranian oil and gas projects are discussed.     

GHG balance of crude palm oil for biodiesel production in the northern region of Brazil

Biomass has become important as an alternative to fossil fuels and as a means to decrease greenhouse gas (GHG) emissions, particularly in tropical regions such as Brazil. Therefore, the demand for energy crops has increased strongly, and among such crops, palm oil is distinctive because of its productivity and well-developed production techniques. This paper intends to evaluate crude palm oil's GHG balance through a life-cycle assessment approach. This study is based on the average data of an ideal palm oil system in the northern region of Brazil. In the production of crude palm oil, a large amount of CO₂ sequestration occurs during the growth of palm oil trees. In contrast, the greatest emissions are biotic CO₂, which returns to the atmosphere and emissions from fertilizer production. The GHG balance of an oil palm plantation is approximately −208 kg CO₂-equiv./1000 kg crude palm oil per year.     

An empirical analysis of energy demand in Namibia

Using a unique database of end-user local energy data and the recently developed Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration, we estimate the long-run elasticities of the Namibian energy demand function at both aggregated level and by type of energy (electricity, petrol and diesel) for the period 1980–2002. Our main results show that energy consumption responds positively to changes in GDP and negatively to changes in energy price and air temperature. The differences in price elasticities across fuels uncovered by this study have significant implications for energy taxation by Namibian policy makers. We do not find any significant cross-price elasticities between different fuel types.     

Crude oil import policy of Turkey: Historical analysis of determinants and implications since 1968

Turkey is one of the most energy import dependent countries in the world, suffering deeply from the economic and strategic burdens of oil importation. Our purpose is to determine the factors behind the crude oil import policy of Turkey and to measure their contribution to a well-organized import strategy. We implemented a principle component analysis to construct an Oil Import Vulnerability Index (OIVI) based on four factors, which are crude oil import dependency of primary energy consumption, crude oil import bill as a share of Gross Domestic Product (GDP), non-diversification of import sources, and share of oil in total energy import. The contribution of these factors to the OIVI is found to be approximately equal. While an overall deterioration in the OIVI has been observed during periods of increasing oil prices, better diversification of oil import sources has lead to significant improvements. We suggest Turkish policy-makers implement sound policies, emphasizing diversification of crude oil import sources and reduction of the share of crude oil in primary energy imports to increase energy supply security. This study has also demonstrated that it is possible to construct an index representing crude oil vulnerability caused by import dependency.     

Improvement of energy demand forecasts using swarm intelligence: The case of Turkey with projections to 2025

The energy supply and demand should be closely monitored and revised the forecasts to take account of the progress of liberalization, energy efficiency improvements, structural changes in industry and other major factors. Medium and long-term forecasting of energy demand, which is based on realistic indicators, is a prerequisite to become an industrialized country and to have high living standards. Energy planning is not possible without a reasonable knowledge of past and present energy consumption and likely future demands. Energy demand management activities should bring the demand and supply closer to a perceived optimum. Turkey's energy demand has grown rapidly almost every year and is expected to continue growing. However, the energy demand forecasts prepared by the Turkey Ministry of Energy and Natural Resources overestimate the demand. Recently many studies are performed by researchers to forecast the energy demand of Turkey. Particle swarm optimization (PSO) technique has never been used for such a study. In this study a model is proposed, using PSO-based energy demand forecasting (PSOEDF), to forecast the energy demand of Turkey more efficiently. Although there are other indicators as well, gross domestic product (GDP), population, import and export are used as basic energy indicators of energy demand. In order to show the accuracy of the algorithm, a comparison is made with the ant colony optimization (ACO) energy demand estimation model which is developed for the same problem.     

Short and long-run elasticities in US residential electricity demand: a co-integration approach

Co-integration techniques show promise in the analysis of short- and long-run effects of economic variables on energy use. We use these techniques to develop an error correction model of annual US residential electricity demand. We construct equipment stock indices and estimate the model for 1949–1993. Our analysis suggests a structural shift in consumption during the 1960s. We discuss reasons for this shift, report the short- and long-run elasticities, provide forecasts for 1994–1995, and compare the model's forecasts with other published forecasts.     

The production of crude oil and natural gas

This paper is directed at examining the impact of changing prices on the level of production of crude oil and natural gas in the United States. By using a cross-correlation test for unidirectional causality it is clearly demonstrated that, for both crude oil and natural gas, domestic production is affected by changing prices. The implications are clear. The decontrol of the price of crude oil and the deregulation of natural gas prices will lead to additional production in the near term.     

The status of primary fossil energy resources in Turkey

The lack of primary fossil energy resources in Turkey is an important problem. Turkey is one of the top 25 nations in energy consumption. Its domestic electricity demand is increasing by 6% per year. Turkey is an import-dependent country because the production of natural gas and oil in Turkey is very low. Turkey must import 93% of its oil needs and 99% of its natural gas requirements. The aim of this study is to investigate the current use and the available potential of primary fossil energy resources in Turkey.     

Regional electric power demand elasticities of Japan's industrial and commercial sectors

In the assessment and review of regulatory reforms in the electric power market, price elasticity is one of the most important parameters that characterize the market. However, price elasticity has seldom been estimated in Japan; instead, it has been assumed to be as small as 0.1 or 0 without proper examination of the empirical validity of such a priori assumptions. We estimated the regional power demand functions for nine regions, in order to quantify the elasticity, and found the short-run price elasticity to be 0.09–0.30 and the long-run price elasticity to be 0.12–0.56. Inter-regional comparison of our estimation results suggests that price elasticity in rural regions is larger than that in urban regions. Popular assumptions of small elasticity of 0.1, for example, could be suitable for examining Japan's aggregate power demand but not power demand functions that focus on respective regions. Furthermore, assumptions about smaller elasticity values such as 0.01 and 0 could not be supported statistically by this study.     

Determinants of import demand for non-renewable energy (petroleum) products: Empirical evidence from Nigeria

This study estimated determinants of import demand for refined petroleum products in Nigeria for the period 1984–2013. It employed the autoregressive distributed lag (ARDL) bounds test cointegration method and analysed both long-run and short-run determinants of import demand for total and specific petroleum products.In the long-run, aggregate and sectoral incomes are significant determinants of import of refined kerosene. Further, real effective exchange rate (REER), aggregate income (GDP), manufacturing sector's income, domestic energy production (DEP) and population growth rate (PGR) are drivers of import of refined motor spirit Moreover, REER, DEP and manufacturing sector's income are propellers of import of refined distillate fuel. Also, REER and total output of petroleum products are major drivers of total import of refined petroleum products.Short-run results show that previous period GDP, PGR and manufacturing and service sectors' incomes are determinants of import demand for refined kerosene. Moreover, REER, GDP, previous PGR and manufacturing sector's income exert significant effects on the import of refined motor spirit. Further, significant effects of REER, DEP, previous PGR, domestic output of the product and manufacturing and service sectors' incomes on the import demand for distillate fuel were found.Policy implications of the foregoing are articulated in the paper.