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Energy Journal Issue

The Energy Journal
Volume 4, Number 4

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Optimal Oil Producer Behavior Considering Macrofeedbacks

Harry D. Saunders

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-1View Abstract

Oil producer decisions on oil pricing and production can affect consumer countries' economies in ways directly affecting producers' interests. The short- and long-term evolution of oil demand in consumer economies is, of course, strongly affected by producer actions. But so also may be returns on assets that producers hold in these economies.

Comment on "Optimal Oil Producer Behavior Considering Macrofeedbacks"

Knut Anton Mork

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-2View Abstract

Harry Saunders's paper on the above subject in this issue of the Journal raises a very interesting point. As is well known, oil-exporting countries now hold major assets in the Western economies. Furthermore, the sensitivity of these economies to abrupt changes in oil prices seems widely accepted. It then seems reasonable to expect oil exporters' pricing decisions to be influenced by concerns about the rate of return on their assets. In particular, Saunders argues that oil exporters would want to avoid abrupt price changes because the ensuing shock effects would tend to reduce the rate of return on capital.

The Rate of Return Earned by Lessees under Cash Bonus Bidding for OCS Oil and Gas Leases

Walter J. Mead, Asbjorn Moseidjord, and Philip E. Sorensen

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-3View Abstract

The remaining oil and gas reserves and resources of the Outer Continental Shelf (OCS) represent one of America's largest publicly owned assets. Through 1980, OCS oil and gas leases had produced $62.8 billion in gross revenue and $41.3 billion in bonus, royalty, and rental payments to the federal government (U.S. Geological Survey, 1981).

Oil and Gas Supply Modeling under Uncertainty: Putting DOE Midterm Forecasts in Perspective

Carl M. Harris

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-4View Abstract

The original purpose of this study was to examine the midterm projections of oil and gas production generated by the 1979 version of the Department of Energy's Midterm Oil and Gas Supply Modeling System (MOGSMS) for the 1979 Annual Report to Congress.q These forecasts applied to conventional oil and gas, onshore and offshore, in the lower 48 states from 1985 to 1995, inclusive. The specific objective of the work was to quantify the sensitivity of these projections to potential uncertainty in some of the model's key elements. But more generally, this exercise is viewed as but one good example of how to estimate the uncertainty in forecasts coming from a large computer-based model.

Nationalizing Oil in the 1970s

Dean Goodermote and Richard B. Mancke

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No4-5View Abstract

National oil companies emerged during the 1970s as an important force within both oil-exporting and oil-importing countries. By 1980 they were producing and marketing well over half the crude oil available for sale on world markets. These oil companies prospered within oil-exporting countries as events increasingly confirmed that the principal source of economic power in the oil business was sovereign control over oil reserves rather than private control over technical, managerial, and capital resources. During the 1970s, many oil-exporting countries sought to exploit their new-found market strength and exercise greater control over their oil industry either by building up existing government-owned oil companies or by seizing the opportunity to create new ones.