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Energy Journal Issue

The Energy Journal
Volume 11, Number 3



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Structure and Organization of the Natural Gas Industry: Differences between the United States and the Federal Republic of Germany and Implications for the Carrier Status of Pipelines

David J. Teece

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-1View Abstract

Abstract:
This paper explores various ways to organize the natural gas industry. In particular, it examines the function of merchant pipelines and explores how mandatory carriage has come to be introduced into the United States. The applicability of the US experience to the European Community is questioned because of the very different regulatory histories of the United States and Europe. The paper concludes that the "open access" trend in the United States has stemmed from the need to patch up the results of previous regulatory errors; and though the Federal Energy Regulatory Commission (FERC) may have helped relieve certain short-term problems by championing open access, it may have created long-term problems that are disguised by the current gas glut. The American regulatory experience in natural gas over the past two decades is seen as most unfortunate, and the benefits available to Europe from imitating recent FERC regulatory strategies are found to be illusory.




CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89

David L. Greene

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-2View Abstract

Abstract:
Following a tripling of world oil prices in 1973-74, the U.S. Congress passed the Energy Policy and Conservation Act of 1975 establishing mandatory fuel economy standards for automobiles and light trucks. Beginning at 18 MPG in 1978, the passenger car standards increased to 27.5 MPG by 1985. There has been considerable debate about the influence of the standards, as opposed to the gasoline price increases in 1973-74 and 1979-80, on new car fuel economy.




The U.S. Demand for Highway Travel and Motor Fuel

Dermot Gately

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-3View Abstract

Abstract:
This paper, based on an econometric analysis of annual data since 1965, examines the prospects for US highway travel and fuel demand, disaggregated by vehicle type (cars and light trucks). Despite projections by the US Department of Energy (DOE/EIA) of virtually no change in highway fuel use in the 1990s, we project a growth rate of about 1.3% annually. DOE/EIA assumes extraordinarily rapid improvement in fuel efficiency and relatively slow growth in large trucks' vehicle miles. We project slower gains in fuel efficiency, for all types of vehicles, and faster growth for large trucks' vehicle miles.




An Empirical Test of An Electric Utility Under An Allowable Rate of Return

George J.Y. Hsu and Tser-Yieth Chen

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-4View Abstract

Abstract:
This paper examines a utility's behaviour under the regulatory constraint of a maximum allowable rate of return. The golden rule of production efficiency, i.e. that the marginal productivities of the input factors are equal, is used as our criterion to examine the utility's economic behaviour. Our case study uses a translogproduction function to investigate the production efficiency of the Taiwan Power Company. Two null hypotheses are tested with the results obtained supporting the existence of the A-f effect. The implications of the results are discussed, a comparison with previous studies is presented, and suggestions for further research are made.




Analyzing Oil Production in Developing Countries: A Case Study of Egypt

Nazli Choucri, Christopher Heye and Michael Lynch

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-5View Abstract

Abstract:
This article presents a detailed simulation analysis of the domestic oil sector in Egypt; a near-typical, non-OPEC, oil-producing developing country. Egypt is a small producer by international standards, yet significant enough that its oil production is important for the country's economy and under certain conditions, for the international oil market as well. A dynamic computer simulation model that depicts significant characteristics of the country's oil sector is utilized to explore the implications of alternative scenarios for government policies, world oil prices, and geological parameters on patterns of production, exports, and export earnings.




OPEC Behaviour Under Falling Prices: Implications For Cartel Stability

Clifton T. Jones

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-6View Abstract

Abstract:
The surprising extended decline in real oil prices during the 1980s has raised the question of OPEC's continued viability as a price-setting cartel. In response, Griffin's (1985) tests of alternative hypotheses about OPEC behaviour performed over a period of generally rising prices (1971:1-1983:III) are repeated for the more recent period of falling prices (1983:IV-198R�1V), yielding the same general conclusions: most OPEC members continue to behave in a 'partial market sharing" way, while most non-OPEC oil producers do not. Thus the evidence suggests that recent oil price reductions are more the result of deliberate output adjustments by the cartel than the unintentional outcome of a breakdown in cartel discipline on the way to eventual collapse.




Future World Oil Prices and Production Levels: A Comment

Franz Wirl

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-7View Abstract

Abstract:
In a recent paper published in this journal, Marsballa and Nesbitt (1986) present an economist's point of view of OPEC pricing. In particular, they compute profit maximizing price strategies using a dynamic representation of the world oil market. The purpose of this paper is not to dispute the calculated numbers but to question the qualitative validity of the calculated optimal paths. The claim of this note is that it is very unlikely to generate smooth paths -- e.g. the price strategies shown in their paper -- the presented framework.