Colin Robinson

The future of UK final user energy demand

Anticipation of final user energy demand is central to suppliers and policy makers plans. Recent developments in dynamic econometrics, such as the cointegration approach, have enabled energy modellers to study long run relationships between demand and its determinants, principally economic activity and real prices. The purpose of this paper is to present the SEECEM output, elasticity estimates and forecasts using the cointegration approach, as well as the methodology and analysis underlying them. As economic activity is expected to grow in all but the iron and steel sector, the long run relationships indicate that most sectors will increase overall fuel use up to the year 2000. Despite weak but potentially volatile world oil prices and given stable environmental policies, average real oil prices should remain broadly constant except in the transport sector. Economic activity elasticities and increased competition in supply industries imply that natural gas and electricity are likely to take an increasing share of final user requirements at the expense of petroleum products and coal. This gradual and continued shift towards cleaner fuels is likely to ameliorate adverse environmental consequences resulting from the overall growth in final user fuel demand.

THE ENERGY MARKET AND ENERGY PLANNING

Abstract The purpose of this paper is to apply economic analysis to two important international energy problems. One is the short-and medium-term prospects for the Organization of Petroleum Exporting Countries. The second is the much longer run, though related matter of how the transition from presently used energy sources to those we may use in the future can be accomplished.

Electricity privatization: What future now for British Coal?

Abstract Since electricity privatization was first announced, it has been plain that radical change in the UK coal industry was bound to follow. British Coal sells the bulk of its production to a state-owned electricity generator which for many years has been used by governments to support indigenous coal output and employment. Electricity privatization seems certain to end such support, exposing British Coal to competition in the market for power generation fuels. Other forms of coal protection may also be called in question. This paper discusses ways in which the UK coal industry may be affected by electricity privatization. It argues that the government should liberalize the coal market as soon as possible even though there are difficulties in doing so if there are dominant generators of electricity.

EEC demand for imported crude oil, 1956-1985

Abstract The authors develop here a model which analyses the EEC demand for imported oil, basing the analysis on functional relationships with real income and price. They conclude that net imports into the EEC in 1985 will be sensitive to future oil prices. If no UK oil were available then it might be necessary to double real oil prices to meet an objective of holding net imports to their 1973 levels. However, the existence of UK oil should allow this goal to be achieved with much lower price rises, probably around 30–50%, but perhaps as low as zero.

Depletion control and profitability The case of the UK North Sea

Abstract The UK government now has very considerable legislative powers to control oil and gas depletion from North Sea fields. The authors examine here the possible effects of the use of these powers. They set up hypothetical models which allow investigation of a number of possible depletion control policies operated in the context of three possible world energy scenarios. They conclude that operation within guidelines so far specified by the UK government would not seriously affect the profitability of the larger fields but that some smaller fields might be more adversely affected. Extra uncertainty and extra cuts seem bound to be generated by depletion control.

Marketing natural gas in Britain

Suggests that both future supplies of, and the future demand for, North Sea Gas are highly uncertain. Gives examples to show that one can argue, with equal plausibility, that in the 1970s there could be either a significant shortage, or a substantial surplus of capacity relative to ‘premium’ gas demand. Argues that the uncertainty of the future demands a highly flexible marketing policy in which tariffs, with built‐in incentives to improve load factors, are aimed at keeping the market in balance and interruptible sales are one of the main marketing weapons. Sums up that this paper has tried to establish some guidelines for natural gas marketing policy in this country, working within some of the constraints which have already been established.