Andre Plourde

Crude oil prices between 1985 and 1994: how volatile in relation to other commodities?

It is said that since the mid-1980s oil has become a commodity like others, and exhibits noticeable price volatility. How then do oil price fluctuations compare with those of other commodities? To address this question, we examine three aspects of price volatility for two marker crude oils and nine other widely traded commodities. Our results suggest that between 1985 and 1994 crude oil is in the upper end of the range of all measures of price volatility studied, but is not clearly beyond the bounds set by other commodities. Implications of this result for the oil industry are discussed.

Asymmetric Price Responses of Residential Energy Demand in Ontario

During the last few decades, oil prices have experienced both sharp increases and, more recently, equally sharp decreases. A number of researchers (e.g. Gately 1993a, 1993b; Hogan 1993; Shealy 1990) have examined the demand responses to these price movements and concluded that price-induced changes in demand have not been symmetric. More specifically, this asymmetry is said to have taken the form of larger demand changes for price increases than for price decreases. To explain this phenomenon, it is typically argued that the oil price rises of the 1970s and early 1980s set in motion behavioural changes that had long-lasting effects, so that when price decreases occurred later in the 1980s, relatively small changes in demand were observed. Shealy (1990), among others, points to the capital stock as playing an important role in this process, but does not explicitly incorporate infornmation on the stock of capital in the model he estimates. Studies that have examined this issue are typically based on as many as three broad levels of aggregation. They tend to aggregate geographically, focusing on entire countries or even groups of countries. Many of these studies also aggregate across sectors of the economy, and thus fail to take into account the different patterns of energy utilization in different regions and/or sectors of the economy. Finally, by looking only at the demand for oil products or at total energy demand, these studies do not explicitly allow for inter-fuel substitution. In contrast, we examine residential energy demand in a single province (Ontario) and allow for inter-fuel substitution by specifying a system of fuel expenditure share equations, which is estimated using annual data for the period 1962-1989. Our focus on the residential sector is predicated on the

Smaller and smaller? The price responsiveness of nontransport oil demand

Abstract Despite a sharp decrease in world oil prices in 1986 that was sustained for almost 15 years, nontransport oil demand growth has remained rather weak in most industrialized countries. We implement various approaches to modeling this observed phenomenon using data for Canada, France, Japan, the U.K., and the U.S. In general, we find that nontransport oil demand has become less responsive to own-price changes, and that specifications allowing for different components of prices to induce different demand responses tend to dominate specifications that exclude this feature. Further, incorporating this feature in a model that allows elasticities to vary over time appears to provide a more appealing characterization of the evolution of nontransport oil demand during the last three decades.

Supply oriented macroeconomics: The MACE model of Canada

Abstract This paper describes MACE, a two sector annual nacroeconometric model of the Canadian economy. The sectoral breakdown highlights the role of energy in a small open economy. In addition, the model emphasizes the supply side, which includes both the evolution of normal output and the determination of the level of current output as the consequence of an explicit operating rate decision by firms. The bulk of the paper outlines the approach used to model supply side considerations, since this is where most of the models innovative features lie.

A supply constrained macroeconometric model of Tanzania

Abstract This paper presents a detailed description of a macroeconometric model of Tanzania, a small open economy at an early stage of economic development. In this economy, imports are a crucial constraint on sectoral output. Since exports are a main source of finance for imports, the export sector is modelled in some detail. The paper describes the theoretical structure of the model, provides a complete list of equations, and briefly discusses its forecasting properties.

The Impact of

The sudden and sharp fall in world oil prices that occurred between December, 1985 and April, 1986 caught many by surprise. This downward price shock was especially unpropitious for the Canadian oil and gas industry. After years of price regulation, the Western Accord (Energy, Mines and Resources, 1985b) and the subsequent agreement on natural gas pricing (Energy, Mines and Resources, 1985a) were in the process of moving the industry towards market-determined prices when, so to speak, the roof caved in.

(US)15 Oil on the Canadian Economy: Evidence from the MACE Model

A number of proponents and opponents of the Canada-U.S. free trade agreements (FTA) have argued that is precludes the adoption of another National Energy Program (NEP). This papers examines the key provisions of the NEP in the light of the energy-related measures in the FTA. It is argued that some of the most controversial measures of the NEP (e.g., price controls, production taxes, some of the discriminatroy aspects of the Petroleum Incentives Program) would be allowed under the FTA. Other measures (e.g., export taxes, the aspects of the Petroleum Incentives Program that discriminated according to nationality of investor), however, would indeed be prohibited under the FTA.

The NEP Meets the FTA

A national competition in 200112002 led to the establishment of CBEEDAC, a new Data and Analysis Centre created in cooperatione with both the Department of Economics and the School of Business at the University of Alberta. It is one of four Canadian Data and Analysis Centres supported, in part, by Natural Resources Canada (NRCan) as part of their National Energy Use Database (NEUD) initiative.

The Canadian Building Energy End-Use Data and Analysis Centre at the University of Alberta

Following the world oil price shock of the early 1970s, departments and agencies of the governments of Canada and of a number of provinces spent in excess of

Government Policy and Access to Natural Gas Service in Canada

1 billion on programs aimed at encouraging natural gas utilities to expand their distribution systems. We describe these programs and the associated public expenditures in each province, and examine their effects on the construction activities of utilities. Using an annual series on access to gas service that we construct for each province for the period 1961 to 1990, we also examine the effects of these programs on changes in access and on how such access has evolved relative to changes in the pipeline distribution system.