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An elementary model to assess the impact of different levels of oil prices on the Mauritian economy
Karim Jaufeerally, Institute for Environmental and Legal Studies.
An elementary model is proposed to assess the impact on the Mauritian economy of different levels of oil prices.
It uses data readily available… Using those ratios, it is possible to map out the impact of oil prices on savings and consumption in Mauritius. Hence, one can infer what levels oil prices will begin to have deleterious effects on the Mauritian Economy.
It is very important to understand that we do not attempt to predict the evolution of oil prices at all, whether on the short, medium or long term. We only attempt to assess the impacts of different levels of oil prices on the Mauritian economy.
It is found that as oil prices increase a larger proportion of our export revenue goes into paying for mineral fuels, whilst savings expressed as a percentage of GNS over GDP(mp) drops and FCE takes a larger share of GNDI and investment expressed as GDFCF over GDP drops with a two year delay….
Conclusion
… As at October 2005, the average price of oil hovered close to US$ 57. It is very close to that level which can begin to have significant impacts on the local economy.
How high or how low oil prices can move up to or down to is basically an unanswerable question. However, should world oil demand closely match world oil supply as appears to be the case, continued high prices or even significantly higher prices cannot be ruled out. The model shows how close we are to an oil price level where savings fall and where most of our national income goes into consumption.
It is time for the people of Mauritius to consider what ought to be done if high prices persist on the medium term or even long term. It is not a vain pursuit. It may turn out to be one of the most vital issues the people of Mauritius have to face.
(17 November 2005)
The Institute for Environmental and Legal Studies “is a non-profit making organisation registered in Mauritius, dedicated to the study of the environment and its interaction with human societies.” (About the Institute). The site’s homepage (Mauritius and Its Environment) has other essays on energy in French and English, including The Possible Consequences of Peak Oil.
Natural gas crisis in the UK:
Anyone for long-term thinking?
Leader, The Guardian
It is vital to distinguish between short- and long-term factors. In the long term Britain will have to take a crucial decision: whether to sharply increase investment in a mix of energy sources to meet a looming shortage when the 21% of electricity produced by nuclear stations has to be replaced. The crunch is how much the need to reduce carbon emissions under our Kyoto obligations – and avoid overreliance on Russian gas – has become so important that past objections to nuclear power must be buried. This, the argument goes, is because other solutions such as “clean coal”, wind, solar, conservation and wave power won’t both be able to fill the gap caused by the withdrawal of old nuclear capacity and cater for normal growth of demand as well. It needs urgent debate and cross-party support because of the long timescales involved.
Today’s short-term problem is real but much less serious. It is the product of a long-term decline in Britain’s self-sufficiency in oil and gas – following the Thatcher government’s decision to leave North Sea oil to market forces – aggravated by short-term forces. These include a lack of domestic infrastructure to cope with imported gas, and inflexibility of supply from monopoly-owned pipelines on the continent of Europe, fanned by fears of an exceptionally cold winter. This has caused serious problems for some very large industrial users of gas, some of which take gas on cheaper “interruptible” contracts allowing cuts in supplies when prices are high or product scarce.
…What is left from all this is a generalised rise in the price of gas in the wake of the oil increase. It will affect everyone this winter, particularly poorer people, plus a comparatively small number of companies heavily reliant on gas which may have to curtail production or work a shorter week. An exceptionally cold winter could, of course, make everything much worse.
(24 November 2005)
Related Guardian story: Ministers ‘in denial’ over gas shortage.
Big Oil ‘participation’ at issue
Definitions cited in dispute over roles in energy task force
Justin Blum, Washington Post
It all depends how you define the word “participate.”
While that may seem as silly as bickering over the definition of the word “is,” the implications for some oil company executives who testified at a Senate hearing could be significant. Based on how the word is parsed, some executives either told the truth or did not when they were asked about their “participation” in the 2001 energy task force headed by Vice President Cheney.
The dispute stems from a question raised by Sen. Frank Lautenberg (D-N.J.). At a hearing two weeks ago, he asked five oil executives whether they or representatives of their companies participated in meetings with Cheney’s energy task force.
The chief executives of Exxon Mobil Corp., ConocoPhillips Co. and Chevron Corp. answered no. The president of Shell Oil Co. said his company did not participate “to my knowledge,” and the chief of BP America Inc. said he did not know.
The Bush administration has refused to identify who participated in the task force meetings. But The Washington Post reported last week that a White House document shows that in 2001, officials from Exxon Mobil, Conoco (before its merger with Phillips), Shell Oil and BP America met in the White House complex with the Cheney aides who were developing a national energy policy, parts of which became law and parts of which are still being debated.
(23 November 2005)
I’d like to know if ‘participate’ included mentioning the words peak, depletion, or Hubbert, and if not why not. -LJ
Higher energy costs a wildcard for retailers
Falling gas prices will help, but heating bills could crimp spending
John W. Schoen, MSNBC
You’ve laid out the money for supplies and rounded up some extra help to serve up the goodies. You’re expecting a crowd to show up, but all it takes is a little bad weather to keep some people home. And, as in years past, you won’t really know until it’s all over just how well your plan succeeded.
If you’re a retailer these days, you have a lot in common with other holiday hosts. And while this year’s high gas prices and consumer jitters appear to be abating, the retail industry won’t know for another month or so whether they bet right when they stocked up months ago for the upcoming shopping season, which traditionally kicks off Friday. If they bet right, they’re looking at one of their best holidays in years. If they bet wrong, you can expect big bargains at year-end sales.
A big wildcard in this year’s bet: rising energy prices. After back-to-back hurricanes knocked out U.S. refiners, a spike in pump prices gave retailers a scare last month, along with a slump in consumer confidence. But as pump prices have fallen, hopes for a solid season have been building. Now, retailers are hoping to front-load the shopping season -– before consumers get socked with winter heating bills, which are expected to run as much as 50 percent higher than a year ago.
(23 November 2005)
Senior producer Schoen has been writing good pieces on energy for MSNBC.
Warning sounded on oil sands
Patrick Brethour, Globe and Mail
A major environmental group is calling for the federal and Alberta governments to roll back “outdated, unnecessary and increasingly detrimental” fiscal incentives for oil-sands projects, arguing that the accelerating pace of development of bitumen deposits poses a grave risk to the province’s air, water and land.
In a report issued Wednesday, the Pembina Institute for Sustainable Development also urged the federal government to establish a “national energy framework” that could encompass a carbon tax — a levy that the oil and gas industry and Alberta have long opposed.
Failure to slow the pace of oil sands development will leave environmental scars across northern Alberta’s boreal forest, and sully Canada’s image, said Marlo Reynolds, executive director of the institute. “We’d probably be seen as the tar nation,” he said, an allusion to the original moniker of the bitumen deposits — the tar sands.
(23 November 2005)
Renewable energy may bring economic boom
David Melmer, Indian Country Today
DENVER – A most unlikely partnership between tribes and cities may be in the offing, and the connection could go a long way toward saving the environment by providing clean and renewable energy.
A Native Renewable Energy Summit was held in Denver Nov. 15 – 17 to brainstorm for ways in which the cities and tribes can partner to achieve their individual goals. The summit was designed to bring ideas to the table that could develop into workable plans for tribes and cities to work together to move toward a cleaner environment while overcoming pitfalls and generating economic opportunities.
Tribes – especially those in the northern Great Plains – want to develop clean, economically sustainable energy sources; and they have great wind resources available throughout most of their tribal lands. The many cities that have pledged to reduce their dependence on carbon-producing power share a common ground with the tribes. Tribes could lead the way by showing their commitment to clean air and water, and creating the potential to expand the distribution of power.
A plan is on the table to build wind turbines on nearly all of the Plains reservations to provide the power they and nearby communities need. The marriage of a clean environment and economic development may not be easily created, yet the obvious barriers seem to be few.
(18 November 2005)
