Showing papers in "The Energy Journal in 1987"

Energy Saving Resulting from the Adoption of More Efficient Appliances

Abstract: In last November's IAEE meetings, Amory Lovins reported estimates of energy saving that will result from the adoption of more efficient appliances. This note addresses three questions related to the subject. 1. The realism of Lovins' estimate of energy saving. 2. The way these estimates fare when juxtaposed against the price elasticity of demand used by Lovins. 3. The light my recent empirical results shed on the magnitude of energy saving we can realistically expect. In the process, the note touches on the polar opposite policies that Lovins has been advocating.

Separating the Changing Composition of U.S. Manufacturing Production from Energy Efficiency Improvements: A Divisia Index Approach

Abstract: The demand for energy is normally broken down into five sectors: industry, utilities, the residential sector, the commercial sector, and transportation. Industry is the most heterogeneous of these with manufacturing accounting for about 80 percent of total industrial energy demand. Manufacturing is itself a very heterogeneous collection of production activities. As

The Behavior of the Market for Energy Efficiency in Residential Appliances Including Heating and Cooling Equipment

Abstract: cooling equipment. Accurate forecasts of residential energy use require quantitative assessments of market decisions about energy efficiency. The results of our investigation of market behavior can lead to a better understanding of the barriers to investment in energy conservation. Understanding market behavior over time is a prerequisite to an evaluation of the need for and the importance of policies to promote energy efficiency. Our results are particularly important to an assessment of the desirability of such federal policies as appliance efficiency standards. To the extent that the market place is effectively influencing the purchase of energy-efficient household appliances, there is little need for federal policies to modify market forces. To the extent that the market for energy efficiency is not performing effectively, the justification for policy intervention is supported. The major finding of this study is that the payback periods for investment in increasing the energy efficiency of most household appliances are two years or less. Except for air conditioners, the discount rates corresponding to these

Uncertainty Analysis of the IEA/ORAU CO2 Emissions Model

Abstract: Future levels of carbon dioxide emissions from fossil fuels are an important determinant of the severity and timing of global warming due to elevated levels of radiatively active (greenhouse) gases in the atmosphere. Many studies have addressed this issue,. These include Rotty (1977), Keeling and Bacastow (1977), Siegenthaler and Oeschger (1978), JASON (1979), Marchetti (1980), IIASA in Haefele (1981), Lovins (1981), Hamm (1982), Nordhaus and Yohe (1983), and Reister and Rotty (1983). Ausubel and Nordhaus (1983) provide a recent critical review of emissions forecasts with a focus on methodological development, citing the advance in methodological sophistication leading to improvements in understanding long-term patterns of energy use and their relationship to CO2 emissions.

Productivity Growth and Technical Change in the Generation of Electricity

Abstract: No student of the electric power industry and its regulation can help but be troubled by the industry's recent historical record on productivity and technical change. For many years the electric power industry was one of the leading sectors of the economy in terms of productivity growth and technological innovation. This is no longer true. By almost every measure, productivity growth and technical change have virtually ceased in the past decade (or even decreased, by some estimates).

Energy Demand Analysis in Developing Countries: A Review

Abstract: Energy demand analysis is an important component of integrated energy planning and policy in developing countries. Planners and policy makers need to have a good understanding of the factors affecting growth and pattern of energy demand before they can proceed to make demand projections for the future. Given the capital intensity and long gestation periods of energy investments, supply bottlenecks, and adverse effects of energy shortages, detailed demand studies need to be under taken at the aggregate and sectoral levels. An analysis of the influence of price and nonprice variables on energy demand would also be neces sary for designing policy measures relating to energy conservation. Energy demand analysis (EDA) involves (a) assembling and presenting a consistent set of data on consumption of various forms of energy, (b) estimating the level of shortage or unfulfilled demand at rele vant price ranges, and (c) quantifying the relationship of energy demand with relevant economic and noneconomic variables such as income, population, prices of different energy sources and their substitutes, changes in technology, etc. In the context of developing countries, EDA becomes complex on account of the following factors: (i) Apart from the compilation of data on commercial fuels, there is a need to estimate the consumption of traditional (or non commercial) forms of energy (biomass as well as animate sources)

Energy for Transport in Developing Countries

Abstract: Transportation is the major market for liquid fuels in many developing countries, accounting on average for one half of total consumption. Unlike the other end-use sectors, possibilities for fuel switching in transport are limited, at least for the time being. Given the existing stock of transport equipment, virtually the entire increase in consumption of transport fuels for the next 15 years or so will involve petroleum products.

Residential Demand for Electrical Appliances and Electricity in the Federal Republic of Germany

Abstract: The description and the forecast of residential electricity consumption is not only important for many areas of economic policy but also for the long-term investment plans of enterprises supplying electrical power. In the past most projections of future residential electricity demand have missed their target values. Besides erroneous assumptions concerning the development of exogeneous variables, there is strong evidence that misspecification of underlying relations and neglect of aggregation problems have contributed to this.

Oil Demand Elasticities in Nigeria

Abstract: Crude oil, which was first discovered in Nigeria in 1956 by the Shell-BP Development Company, has contributed significantly to the country's economic development. The exploitation of this resource transformed Nigeria's balance of trade from chronic deficits to huge surpluses (especially during the early-to-mid 1970s). This occurred as a result of the increase in the volume as well as the value of crude oil during this period. However, the surplus started to decline in the mid-1970s due to a combination of increased imports (resulting from the oil-boom mentality that had developed) and reduced crude oil exports (caused by the downward trend in world economic situations). By late 1977 the country again had a deficit on visible trade.

Thermal and Economic Measures of Energy Use: Differences and Implications

Abstract: Statistical agencies often report aggregate energy use by expressing different energy types on a common basis with thermal conversion factors. Before the energy crisis of the 1970s Turvey and Nobay (1965) indicated some pitfalls associated with thermal conversion factors in the analysis of aggregate energy use. This point has been emphasized again by Berndt (1978). More recently Hong (1983) compared two Divisia indexes of energy useone of the expenditure shares and the other with thermal shares-and he found the two indexes behaved differently in the United States from 1950 to 1978. The relationship between the relative prices of energy types, which change over time, and their relative thermal contents, which are usually taken to be constant, explains why these two measures of energy use follow different paths.

The Reserve-Production Ratio

Abstract: A good concise examination of the significance of the reserveproduction (R/P) ratio for the future availability of oil can be found in a short paper by Edward W. Erickson in the Energy Journal (1985). He notes that the worldwide R/P ratio is 35, but this ratio is not uniform across the world. For the three core countries of the Gulf (Saudi Arabia, Kuwait, and the United Arab Emirates) it is 100. For the rest of the world it is 25, although according to my calculations, for the world outside OPEC and the communist areas it may be close to 18. Furthermore, with the fall in OPEC production that has taken place over the past few years and the rise in production outside of OPEC, about half of the world oil output is now generated in areas where the aggregate R/P ratio is less than 20.

Utilities and Cogeneration: Some Regulatory Problems

Abstract: Cogeneration-a technology which uses waste heat for electricity generation-has been known for over one hundred years. To be economically viable, it requires that excess electricity be fed into a grid for distribution. In the U.S., utilities have been legally obliged by PURPA legislation (Public Utility Regulation Practices Act) to put their grids at the disposal of electricity suppliers in industry. Nonetheless, cogeneration has recently accounted for no more than 14 percent of electricity used in industry (Anandalingam, 1985). Thus, PURPA legislation may not be enough to open markets to cogenerators.

Cuban Oil Reexports: Significance and Prospects

Abstract: Since the early 1970s, Cuba has been selling oil products, obtained largely from imported Soviet crude, in Western Europe for hard currency. Initially, these sales were relatively small and limited to refined products, such as naphtha. More recently, the magnitude of these reexports has grown significantly, and the range of exported products has expanded to include crude oil.

The Demand for Home Insulation: A Study in the Household Demand for Conservation

Abstract: Publisher Summary There has been a growing need for the development of a behavioral model of the demand for conservation. It is because the utilities as a group have increasingly become a supplier of conservation in the sense that they are a supplier of energy as a group. Consequently, there emerged a need to plan for the demand for conservation in the same way as the need to plan for the demand for energy. The development of a system that estimates behaviorally the demand for conservation provides the utility with a tool that enables it to estimate the household response to measures intended to affect the household demand for conservation, one way or another. These measures may originate with the utility or the state and federal government. This chapter presents a behavioral model of the household demand for insulation in the Sacramento Municipal Utility District's (SMUD's) service area. It describes the use of an engineering model (CAL PASS) to provide the database necessary to generate the time series for the insulation index. The chapter discusses the methods for calculating the index for 1960–1980 and for each type of dwelling, with each dwelling classified by heating and cooling model.

Lessons from the National Energy Planning Experience in Developing Countries

Abstract: Most of the effort to solve the energy problems of developing coun tries since 1973 has been devoted to demonstrating particular energy technology options, such as solar energy, and meeting particular needs, such as electric power generation. But a continuing theme has been the more general need for well-informed, systematic energy planning and decisionmaking in these countries. Energy is a particularly risky area of policymaking to try to handle through intuition and casual information gathering because it includes such a wide range of options, institutional roles, and connections with other sectors and because decisions on re sources and technologies so often affect energy conditions (and national economies) for decades ahead. It is not surprising, then, to see that ineffective energy planning has often led to unwise selection of energy options; wastes of scarce fiscal and human resources; energy shortages, higher than necessary energy costs, unreliabilities in energy supply that become obstacles to the development process; and reduced confidence in energy and other institutions, including national governments and international partners. One response by energy experts and development assistance agen cies has been to emphasize the importance of integrated, comprehensive national energy planning and to provide technical assistance to develop ing countries in building institutions for that purpose. Based on more than a decade of experience with such efforts, this paper offers a sum mary of what has been learned so far, together with some thoughts about where to go from here.

Energy-Nonenergy Input Substitution in Western U.S. Agriculture: Some Findings

Abstract: The crucial role of energy as an input in the production process has engaged the serious attention of energy planners and researchers in recent years. This was especially true after the OPEC oil embargo of 1973 and the natural gas shortages in the winter of 1976-1977. The prospect of similar energy supply disruptions and price escalations in the future has reinforced the need for adopting measures to reduce energy consumption.

Energy Demand Modeling with Noisy Input-Output Variables

Abstract: One of the most important challenges facing energy analysts is to predict future energy consumption levels. The volatility of energy prices following the 1973 oil embargo and the unexpected elasticity of demand to higher prices caught most energy forecasters off the mark (see Energy Daily, "How It Didn't Turn Out: The Forecasters Who Failed," 1986). The same can be said of electricity forecasters who consistently overshot growth rates for over a decade despite compelling signs to lower their projections (Uhler and Nelson, 1985), (see Figure 1).

Energy and Economic Effects of Utility Financial Incentive Programs: The BPA Residential Weatherization Program

Abstract: Many electric utilities offer their residential customers substantial financial incentives (low-interest loans or rebates) to install energy-efficient equipment and building retrofit measures (Stern, Berry, and Hirst 1985). For example, the Tennessee Valley Authority gave zero-interest loans to almost 500,000 households between 1977 and 1985; these loans average almost $1000 each for installation of retrofit measures (TVA 1985). Pacific Gas and Electric Company spent almost $100 million on administrative and debt service costs for its residential retrofit loan program, in which about 500,000 households participated (California PLC 1984).

Sources of Labor Productivity Variation in the U.S. Surface Coal Mining Industry, 1960-1976

Abstract: Our paper analyzes the sources of labor productivity variation in U.S. bituminous coal surface mining from 1960 to 1976. The coal mining industry was among the first to experience a prolonged decline in labor productivity in the post-World War II period. In surface mining nationally, labor productivity in 1977 was 26.6 tons per worker-day, or 28 percent less than the peak of 36.7 tons per worker-day achieved in 1973. Moreover, in several major coal-producing states, the decline began much earlier and was more dramatic. For example, in West Virginia (the first state to experience declining productivity) the loss in productivity between 1965, the year in which productivity in the state peaked, and 1976 was nearly 52 percent. Eastern Kentucky experienced an even larger drop of 56 percent between 1967 and 1976. It was only the expansion of surface mining to western states in the 1970s that delayed the appearance of a national decline in productivity until the early 1970s. The industry has thus foreshadowed the labor productivity declines that subsequently occurred in other industries.

Price Elasticity of Demand for Oil and the Terms of Trade of the OPEC Countries

Abstract: Our aim was to develop a model that shows that the rise in the price elasticity of oil could have a significant adverse effect on the terms of trade of the oil exporters. The model will also be used to investigate the effects on terms of trade of a number of OPEC countries given the price elasticity of demand for oil.

The Residential Adoption of Electricity in Early Twentieth-Century America

Abstract: The commercial development of electricity in the late nineteenth century brought about a technological revolution comparable to, if not exceeding, the development of the steam engine more than a century earlier. While the steam engine laid the groundwork for the Industrial Revolution and altered the social, economic, and political framework of eighteenth- and nineteenth-century Western Europe, the development of electricity had an equally significant impact in a later era.

Competition in Natural Gas Pipeline Wellhead Supply Purchases

Abstract: Throughout most of the last three decades, interstate natural gas pipeline companies-operating mainly as private carriers, buying gas supplies in the field and reselling them downstream'-have competed primarily on the basis of nonprice terms. Under the regime of wellhead regulation stemming from Phillips,' in upstream (field) markets binding price ceilings meant thatinterpipeline competition in gas purchases was governed principally by the attractiveness of take-or-pay provisions pipelines offer in their contracts with gas producers.' In downstream (city-gate) markets the chronic excess demand induced by wellhead regulation meant that pipelines competed for gas sales to local distribution companies and direct wholesale consumers (large industrial end-users and electric utilities) largely on the basis of the maximumquantity of gas that could be delivered.

Direct Investment in Conservation Measures by a Public Utility

Abstract: This is the publisher's version, also available electronically from http://www.iaee.org/en/publications/ejarticle.aspx?id=1830.

On Marginal Cost Pricing When Consumers Can Also Produce

Abstract: Marginal cost pricing, so often praised in theoretical as well as empirical studies, is correct only for a very idealised economy. When a theoretical model is adjusted for some real world concerns, pricing at marginal cost begins to seem impractical and often incorrect. Baumol and Bradford (1970) wrote perhaps the most striking article along these lines, showing that in an economy where the government has authority to tax, marginal cost pricing is not optimal and second-best solutions are called for.

Policy and Energy Use: Asia's Adjustment to the Changing Energy Picture

Abstract: There are several important issues associated with the dramatic changes in the energy sector over the last ten years. These changes may be grouped into three phases: (1) the dramatic increase in oil prices in 1973-74 (henceforth to be referred to as "Oil Shock I"), (2) the second set of sharp increases in 1979-80 (henceforth, "Oil Shock II"), and (3) the stabilization and subsequent drop in both the nominal and real prices of oil beginning in late 1982-sometimes referred to as "Oil Shock III" (in the sense that many energy programs and plans assumed the contrary). These events drew attention to the cost of using oil-oriented tech nology to improve the quality of life and standards of living in all coun tries. Each set of events has had varied impacts on the development plans of oil-using countries. The vulnerabilities of such users are de pendent on three major factors: (1) the level of dependence on imported oil; (2) the ability of the user to finance oil imports, and (3) the country's stage of economic development. The countries which faced the greatest need to reevaluate their oil consumption patterns were the oil-importing nations, especially the net-oil-importing developing countries (NOILDCs). There is no question that a country's vulnerability increases with the size of its imports of oil and other fuels relative to total supply. But in the light of the political factors associated with the stability of inter national oil supplies this vulnerability is more pronounced for oil im

The Structure of Energy Demand and Energy Conservation

Abstract: A major shortcoming of energy planning for the developing coun tries has been the inadequate treatment of the structure of energy demand and how it is likely to change as development proceeds. A realistic assessment of the conservation potential and interfuel substitu tion possibilities in the major end use sectors is therefore difficult. There were two reasons for this past neglect. The first is that until the sharp rises in oil prices, neither conservation nor interfuel sub stitution was a major policy concern for the developing countries. On the contrary, petroleum supplies were cheap and easily available, and the exceptional flexibility of petroleum-based fuels meant that they could be used in a wide variety of functions (raising steam, process heat, cooking, lighting and motive power) in all end use sectors. In these circumstances government policies in most countries, whether implicit or explicit, encouraged the substitution of petroleum for other sources of energy, or at least did not place obstacles in its path. The second reason for the neglect of sectoral energy demand was the lack of basic data on consumption of the various sources of energy in main end use sectors. Typically, energy consumption data for develop ing countries were limited to total primary consumption by types of fuel (coal, oil, gas, primary electricity). They stopped short of the distribu tion of these fuels to energy transformation, household, industrial, or transport uses.

Technology and Energy Use Before, During, and After OPEC: The U.S. Portland Cement Industry

Abstract: For 12 years analysts have watched industries respond to increased energy prices. In particular, there has been an extensive effort to measure the substitutability of inputs in production, much of which has focused on energy and capital. We may now be at a point where the relevant question is, have firms increased the substitutability of energy with other inputs by what they have done these past 12 years, or will they be caught unawares as the current drop in oil prices precipitates a fall in the market prices of all energy sources? Will we see firm production moving back toward a more energy-intensive process either in the short run or the long run?