The Energy Journal

This paper examines OPEC pricing and output strategies, both to provide an understanding of OPEC's unwise price doubling in 1979-80 and also to analyze what strategy might serve it best for the future. We focus on the unavoidable uncertainty regarding the underlying parameters that characterize the world oil market (price elasticities, income growth rates), and the sensitivity of discounted OPEC revenue to changes in these parameters, for various pricing strategies.

Privatization was intended to make the English bulk electricity market sufficiently competitive to avoid the need for regulation, but two generators set the spot price over 90% of the time though they supply less than 60% of total electricity generated. Their market power depends on their share ofnon-baseload plant, and agreed divestiture here should increase competition. The paper argues that the contract market, which makes entry contestable, will ensure that long-run average prices are kept at the competitive entry level, with increased competition mainly increasing medium-run volatility and short-run economic efficiency.

Based on sectoral, or partial equilibrium, analyses, energy conservation has been offered as a "no regrets" COz mitigation strategy. Ours is the first study to isolate key features of conservation strategies in a general equilibrium context. The results indicate that conservation would have slightly negative effects on the U.S. economy overall, in addition to sizable negative effects on most energy industries. Thus, while conservation may be a worthy C02 mitigation strategy, it should not be oversold as costless.

Beginning in 1998 a percentage of large auto companies' sales in California must include zero-emission vehicles (ZEVs), which at this time are synonymous with electric vehicles. Data on consumer values and the level of consumer acceptance for alternative fuel vehicles are necessary to determine the practicality of the State's policy. This paper presents the results of aforecast for alternative fuel vehicle purchases in California. This forecast uses conjoint analysis, a multi-attribute utility market forecast methodology developed within the field of marketing research. The forecast yields several types of results, including market simulations of the alternative fuel vehicle market, relative preferences among vehicle attributes, and the identification of market segments most likely to purchase each type of vehicle. The research suggests a market for electric vehicles too small to support California's ZEVsales mandate, and a very large market for natural gas vehicles. This paper concludes with a discussion of automobile and electric utility industry interests with regard to these forecast market consequences.

This paper examines the extent to which limitations in the transportation system for the natural gas market in the United States narrows the effectiveness of the NYMEX natural gas future contract as a hedging instrument and why a second contract with a different delivery point was approved during 1995. We find that the NYMEX contract is an effective hedging instrument for gas sold into pipelines for consumption in southern, eastern and midwestern states, but does not provide an effective hedge for gas sold for Rocky Mountain and West Coast states.

This paper examines how economics has contributed to an understanding of the international oil industry. After considering why knowledge of the oil industry is a subject worthy of interest, the paper develops a stylized version of economic methodology. It then tries to apply this to the oil industry. However, the paper observes that in the past, because of secrecy and lack of data, there have been serious problems which inhibit the use of standard methodology. The result has been a tendency among some economists to apply untried theory to the industry with damaging results. The paper then considers how other economists have adopted a different approach and in doing so, have made significant contributions. The paper concludes by considering future avenues for the further application of economic analysis to the oil industry.