Natural gas pricing policies in Southeast Asia

The very dynamic economies of Southeast Asia have recently been experiencing a rapid increase in energy demand. Parallel to this development, there has been an increase in the utilization of indigenous natural gas resources. This article reviews gas-pricing policies in the region, which partly explain the rise in gas utilization. Although diverse, energy pricing policies in Southeast Asia address the common objective of enhancing domestic gas production and utilization.
The article concludes that a more rational gas-pricing policy framework is emerging in the region. In global terms, gas pricing in the region tends to converge in a market-related framework, despite the many different pricing objectives of individual countries, and the predominance of non-economic pricing objectives in certain countries (especially gas-rich nations). Specifically, governments have been flexible enough to follow global trends and initiate changes in contractual agreements (pricing and profit-sharing), giving oil companies more favourable terms, and encouraging continued private investment in gas development. At the same time, promotional pricing has also been used to increase utilization of gas, through set prices and adjusted taxes achieving a lower price level compared to substitute fuels.
For an efficient gas-pricing mechanism, refinements in the pricing framework should be undertaken, as demand for gas approaches existing and/or forecast production capacities.     

Investor demand and spot commodity prices

The on-going debate over the influence of investor demand on spot commodity prices largely attempts to assess this influence by measuring the growth in investor demand in recent years. Given the serious data problems that plague such analyses, this article pursues another approach in the hope of providing useful insights into the impact of investor demand on spot commodity prices. It focuses on the mechanisms by which investor demand affects spot prices, and in particular on two questions. First, how does an increase in investor demand on the futures markets affect the spot market and spot price? Second, when investor demand is increasing and pushing a commodity's price up, do physical stocks of the commodity also have to be rising, as economists and others widely assume?On the first question, the article concludes that a surge in investor demand raising prices on the futures markets will have a direct and comparable effect on the spot market prices when these markets are in strong contango. However, when markets are in weak contango or backwardation, price movements in the futures markets have a much looser effect on spot prices. As a result, changes in investor demand on the futures markets may have little or no influence on spot prices in the absence of a strong contango. Instead, changes in fundamentals (that is, producer supply and consumer demand) and possibly changes in investor demand taking place directly on the spot market largely determine the spot price at such times.On the second question, the article shows that investor demand can be pushing up a commodity's price even when investor stocks are falling, despite the widespread presumption to the contrary.     

天然气供气业务风险分析与应急预案设计

近年来,天然气消费量迅速增长,天然气领域的投入和天然气储量、产量和贸易量也呈迅速增长态势,并显示出增长的巨大潜力。天然气市场需求量的大幅度增加与国内天然气供给不足造成的供需不平衡,给天然气供气业务带来了极大的挑战。本文根据近两年来天然气供应面临的危机,分别对天然气供气产业链的上、中、下游的突发事件风险进行分析;并针对供气业务中断带来的风险,从突发事件分级、应急处置流程等两个关键要素着手对应急预案进行优化。该研究对完善天然气供气突发事件应急预案、有效快速应对突发事件提供了参考和指导。     

The potential supply of energy minerals in Australia

Australia is a sparsely populated country that is well endowed with energy resources, and the size of coal, natural gas, and uranium reserves relative to domestic demand has given Australia the opportunity to become a major exporter of these fuels. This paper assesses Australian supply potential of these three fuels, together with crude oil, through to the early years of the next century. With the exception of crude oil, supply potential appears adequate to meet projected domestic and export demand. However, crude oil supplies are unlikely to meet domestic requirements, and to the shortfall may be considerable.     

Oil spills on other commodities

This paper examines the effect of crude oil prices on the prices of 35 internationally traded primary commodities for the 1960–2005 period. It finds that the pass-through of crude oil price changes to the overall non-energy commodity index is 0.16. At a more disaggregated level, the fertilizer index had the highest pass-through (0.33), followed by agriculture (0.17), and metals (0.11). The prices of precious metals also exhibited a strong response to crude oil price. In terms of individual commodities, the estimates of the food group exhibited remarkable similarity while those of raw materials and metals gave a mixed picture. The implication is that if crude oil prices remain high for some time, as most analysts expect, then the recent commodity price boom is likely to last much longer than earlier booms, at least for food commodities. The other commodities, however, are likely to follow diverging paths. On the methodological side, the results show that price indices, while providing useful summary statistics, they need to be supplemented by individual commodity analysis.     

An economic appraisal of the Australian oil and gas industry

The author assesses Australian oil and gas production within the context of overall domestic energy supply and demand. Future domestic production of petroleum is unlikely to meet more than 60% of domestic demand after this decade, although gas reserves should be adequate until 2000. Important economic issues - leasing, royalties, taxation, pricing, and exploration incentives - and their relationship to future supply and demand, are identified and evaluated.     

Rare earth elements as critical raw materials: Focus on international markets and future strategies

Supply of some critical raw materials by European industry is becoming more and more difficult. After the case of natural textile fibres, in particular cotton, and timber, over the last few years the problem of rare earths (REs) availability has also risen. The 97% of the global supply of rare earth metals (REMs) is produced by China, that has recently done copious cuts of its exports, apparently in order to protect its environment. This fact has greatly increased the REs prices, causing tension and uncertainty among the world hi-tech markets. Many of these materials, in fact, have very few effective substitutes and low recycling rates too. In addition, their natural reserves of rare earths are concentrated in a small number of countries (China, Brazil, US, Russia, Democratic Republic of Congo). REMs are a group of 17 elements particularly used in many new electronic and advanced components: such as fuel cells, mobile phones, displays, hi-capacity batteries, permanent magnets for wind power generation, green energy devices, etc. Many analysts foresee much more requests in the next decades.     

The supply and demand outlook for energy in the Asia—Pacific region

Years of strong economic growth in the Asia—Pacific region have resulted in unprecedented increases in energy demand in the region, particularly for oil and gas. The supply of oil and gas to the region will become more problematic as the decade progresses. Already 50% dependent on imported oil, this figure will rise to nearly 65% by 2000. Because high rates of domestic oil demand growth among traditional petroleum exporters - Indonesia. China and Malaysia - will absorb exportable surpluses, the region will find itself dependent on the Middle East for at least 90% of its imported oil needs by 2000. Currently linked to oil, LNG prices cannot justify the investments needed to bring new greenfield projects on line. With demand expected to exceed 67 million tonnes (Mt) in 2000 and 100 Mt in 2010. over 50 Mt of new capacity will be needed; satisfying this demand will necessitate a new pricing structure for LNG, raising the price substantially above the relative price of crude oil.     

Price prospects in Western Europe for internationally traded fossil fuels until 2000

A methodology for the long-term assessment of prices is designed and applied to the international markets for coal, oil and natural gas and likely price developments between 1990 and 2000 are explored. The coal market will remain competitive, and the long-term price will be determined by the total cost of marginal supply. The oil price will be set, even in the long term, substantially above the competitive level, by those who control the exceptional Middle East resource base. The traditional link between gas and oil prices will erode in the 1990s, and gas will be independently and competively priced by the turn of the century. Resource constraints are not expected to push prices upwards within the time horizon of the study. The relative price of gas will fall over the forecast period, and its market share will increase as a consequence.     

Pricing of Natural Gas in Developing Countries

The uncertain supply and increasing cost of petroleum products since 1973 has spurred on the development of alternative forms of energy. Natural gas is a major source of energy in over 50 developing countries. In these countries natural gas has many uses as a substitute for other fuels or as a feedstock. This paper discusses the economic concept for pricing of natural gas, in particular marginal costs, and estimates the economic cost of natural gas in developing countries under a wide range of conditions. The marginal cost of natural gas estimated for these countries is far below the border price of competing fuels. Because natural gas is in its early days of development, gas supply costs are not expected to rise in these countries within the next two decades as already proven reserves are tapped.     

The Future Role of Natural Gas in Europe

This paper provides an overview of the Western European natural gas market and discusses its future development. Price data are presented. Current utilization is evaluated and projection of future consumption of natural gas by market sectors is given. The factors effecting future demand for natural gas as well as those effecting price are evaluated. The author concludes that it is unlikely that natural gas reserves indigenous to Western Europe will be sufficient to meet future demands. Importation of natural gas from outside the area will be necessary. Potential natural gas exporters to Western Europe are identified. Cet article présente une vue d'ensemble du marché du gaz naturel de l'Europe occidentale et étudie ses possibilités de développement. II donne également des indications sur l'évolution des prix. De plus, il passe en revue son usage courant ainsi que les tendances de sa consommation future par marchés sectoriels. L'article étudie aussi les facteurs affectant la demande future de même que ceux affectant les prix. L'auteur conclut qu'il est peu probable que les réserves de gaz naturel domestique de l'Europe occidentale soient suffisantes pour répondre à la demande future. L'importation du gaz naturel apparaît donc comme une nécessité. Enfin, les exportateurs éventuels de gaz naturel à destination de l'Europe occidentale sont répertoriés. Este artículo presenta una visión general del mercado de gas natural en Europa Occidental y analiza su desarrollo futuro. Se presenta información sobre precios y se evalúa la utilización presente y proyección futura del consumo de gas natural por sectores. Se evalúa también los factores que afectan la demanda y precios futuros del gas. El autor concluye que es improbable que el gas natural de Europa Occidental sea suficiente para cubrir la demanda futura de gas. La importación de gas será por tanto necesaria. En el artículo se identifican los exportadores potenciales de gas natural destinado a Europa Occidental.     

Canadian manufacturing: The impacts of natural resource price increases on input demands and costs

The separate effects of 50% increases in the prices of energy, renewable and nonrenewable natural resource inputs on factor demands and production costs are simulated for Canadian total manufacturing and six two-digit industries. Both renewable and nonrenewable natural resource price increases have a substantially greater effect upon the demands for other factors and upon production costs than a parallel energy price increase. These results are important from a policy perspective and justify the further disaggregation of inputs in this and in other models of input demand.     

A review of the PGM industry,deposit models and exploration practices: Implications for Australia's PGM potential

Australia is prospective for platinum group metal (PGM) mineralisation (in particular primary magmatic reef, primary magmatic by-product, late magmatic and hydrothermal, and alluvial placer type) but its known PGM endowment is negligible compared to that of South Africa, Russia, the USA and Canada. Most Australian PGM projects are operated by mid-cap or junior companies and form part of larger, more diverse project portfolios held by these explorers. Most projects were ‘hot’ while market conditions were favourable. However, as other metals became ‘fashionable’ and market conditions for PGM changed, so did the focus of these companies. Pure PGM companies are rare in Australia. The search for and development of PGM-only deposits in Australia are high risk business activities. No new primary PGM deposits have been discovered since the mid to late 1980s and none of the significant deposits that were discovered or evaluated in the 1980s have been mined. This review suggests that at least several A$10 million but more likely several A$100 million were sunk into PGM exploration and development projects but none advanced to the mining stage. The viability of Australian PGM projects is very sensitive to (1) metal prices, (2) the US$/A$ exchange rate, and (3) large capital expenditure requirements relative to the small size of Australian PGM-only deposits. Most PGM-only projects were initiated at times of high PGM prices. However, advanced exploration, feasibility studies and project development always lagged behind the price booms. South Africa, Russia and Canada contain approximately 98% of the known global PGM reserves. This situation has a very negative effect on the Australian PGM industry as the well-endowed nations continue to receive the lion's share of exploration spend and new projects.     

PROJECTED EFFECTS OF ENERGY POLICIES ON AGRICULTURAL WATER USE AND IRRIGATION1

ABSTRACT: A national and interregional programming model was used in projecting the impacts of alternative energy policies and prices on agricultural production, land use, and irrigation. The alternatives analyzed include (a) natural gas deregulation, (b) natural gas curtailment, (c) doubled energy prices, and (d) tripled energy prices. These alternatives are compared with a base alternative where prices and conditions are at normal levels. Restraints in the model control availability of water, land, nitrogen fertilizers, and energy. Water production functions were used to adjust water use to conform with projected energy prices and policies. Natural gas curtailment would have the largest effect on nitrogen use on irrigated land. Values or shadow prices for lands that remains in irrigation would increase under all of the alternatives because of reduced supply. Increased energy prices generally would increase use of surface water for irrigation and reduce use of ground water due to higher pumping costs. Reductions of 50 percent or more in ground water use would occur in the South Central and Western regions of the United States. Water supply prices increase under all of the alternatives; with the amount varying by regions and the policy or price situation.     

An overview of global gold market and gold price forecasting

The global gold market has recently attracted a lot of attention and the price of gold is relatively higher than its historical trend. For mining companies to mitigate risk and uncertainty in gold price fluctuations, make hedging, future investment and evaluation decisions, depend on forecasting future price trends. The first section of this paper reviews the world gold market and the historical trend of gold prices from January 1968 to December 2008. This is followed by an investigation into the relationship between gold price and other key influencing variables, such as oil price and global inflation over the last 40 years. The second section applies a modified econometric version of the long-term trend reverting jump and dip diffusion model for forecasting natural-resource commodity prices. This method addresses the deficiencies of previous models, such as jumps and dips as parameters and unit root test for long-term trends. The model proposes that historical data of mineral commodities have three terms to demonstrate fluctuation of prices: a long-term trend reversion component, a diffusion component and a jump or dip component. The model calculates each term individually to estimate future prices of mineral commodities. The study validates the model and estimates the gold price for the next 10 years, based on monthly historical data of nominal gold price.     

Mineral reserves: Projected lifetimes and security of supply

This article analyses the lifetimes of reserves of three dozen important minerals. Despite the high rate of their extraction in the past 30 years, the recorded reserves of these non-renewable materials were higher in 1981 than in 1950 and they seem to meet foreseeable demand for a long time to come, as indicated by the estimated static lifetime for each of the minerals covered. The dynamic nature of ‘reserves’ is emphasized: further exploration and scientific and technological advance will add to the present proven reserves, and at a higher price further resources will be ‘upgraded’ into commercially exploitable reserves. Apparent long-term security can be disturbed by natural disasters, political events or other factors, especially in the case of minerals whose reserves and production are highly concentrated in one country. However, any such interruption in the continuity of supply is likely to be short-lived.     

The role of price expectations and legal uncertainties in ocean mineral,exploration activities

In this paper, a standard exploration activities model is modified and applied to time series, data from deep seabed mining of a group of minerals where the number of patents is used as a proxy, for the level of mineral exploration activities. In addition to the rational expectations model, price, expectations formation for mineral prices is decomposed into trend and cyclical components using the, HP-filter method. Estimated parameters from the supply and cost functions are used to determine the, shadow price of the minerals. The non-linear instrumental variables estimator is employed to estimate, the exploration activities function. While the rational expectations model shows the importance of, current prices on exploration efforts, the HP-filter model suggests that firms concentrate on the trend, in prices rather than the short-run cyclical fluctuations. Also, while the U.S. refusal to ratify the LOSC, has increased the legal uncertainties surrounding the management of ocean resources and reduced the, incentive to engage in exploration activities, the passage of the ISA's main legislative accomplishment, regarding regulation of the explorations for polymetallic nodules appear to have made a positive effect.     

Long-term trends in the Real real prices of primary commodities: Inflation bias and the Prebisch-Singer hypothesis

Following the Boskin et al., (1996) report, it became widely recognized that price indexes in the U.S. and elsewhere overstate inflation. Svedberg and Tilton (2006) highlighted that this inflation bias may have important implications for estimated long-term trends in nonrenewable resource prices. ST construct an inflation-bias corrected CPI (and PPI) for the U.S. and use their corrected deflator(s) to define a so-called ‘real real’ price of copper. Their ‘real real’ price of copper is then used to re-estimate long-term trends in real copper prices. This paper proposes a quick method for obtaining inflation-bias-corrected estimates of long-run trends in real primary commodity prices directly from estimates in the published literature. Our approach obviates the need re-do existing empirical studies using a corrected or ‘real real’ price of nonrenewable resources. The two approaches are mathematically equivalent.     

VALUING IRRIGATION WATER IN PUNJAB PROVINCE,PAKISTAN: A LINEAR PROGRAMMING APPROACH1

ABSTRACT: Linear programming models of a representative farm in a district of Pakistan's Punjab Province are formulated for the purpose of estimating the value of irrigation water. The models provide for choices among several irrigation levels for each potential crop. Solutions of the model for several water supply situations provide the basis for approximating the total, average, and marginal values of irrigation water. Prices for important crops in Pakistan are controlled at levels below their levels elsewhere in the world, so models are specified for both financial (domestic price) and economic (world price) scenarios. The value of water to society (its economic value) is high relative to the costs of some generally available water-augmenting investments, while financial values, which measure water management and allocation incentives faced by farmers, are less than the corresponding economic values. At current water supply levels, incremental returns to added water estimated from the economic model would justify investments in water-saving or water-augmenting technologies, while such a decision would be barely attractive assuming financial prices. While present government commodity price policies may serve to protect low-income and non-farm members of the population, they also inhibit farmer investments to increase the productivity of scarce irrigation water.     

天然气供气业务风险分析与应急预案设计

天然气市场需求量的大幅度增加与国内天然气供给不足造成的供需不平衡,给天然气供气业务带来了极大的挑战。根据近两年来天然气供应面临的危机,分别对天然气供气产业链的上、中、下游的突发事件风险进行分析;并针对供气业务中断带来的风险,从突发事件分级、应急处置流程等两个关键要素着手对应急预案进行优化。该研究对完善天然气供气突发事件应急预案、有效快速应对突发事件提供了参考和指导。