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Dahl, Carol
Publications (5 of 5) Show all publications
Zhao, X., Dahl, C. & Luo, D. (2019). How OECD countries subsidize oil and natural gas producers and modeling the consequences: A review. Renewable & sustainable energy reviews, 104, 111-126
Open this publication in new window or tab >>How OECD countries subsidize oil and natural gas producers and modeling the consequences: A review
2019 (English)In: Renewable & sustainable energy reviews, ISSN 1364-0321, E-ISSN 1879-0690, Vol. 104, p. 111-126Article in journal (Refereed) Published
Abstract [en]

Since fossil fuel subsidies entail significant economic, fiscal, social and environmental costs, more and more attention is being paid to phasing out fossil fuel subsidies. The OECD has recently completed a report quantifying the amount of both producer and consumer subsidies for their member countries, and some work has been implemented on analyzing the effects of consumer subsidy removal. However, there is hardly any investigation of the consequences of producer subsidies. In this paper, we focus on oil and gas producer subsidies of OECD countries and their effects. First, we describe the transfer mechanisms indicated by the OECD report for producer subsidies. In order to recommend models to analyze the influence of removing producer subsidies, we review upstream oil and gas models and provide a taxonomy for them. From them we recommend the most appropriate models for each type of producer subsidy to model upstream decision making. Our contribution in this paper is to categorize the upstream models we have found, compare their main features, as well as recommending best in class models for analyzing the effects of each type of upstream producer subsidy.

Place, publisher, year, edition, pages
Elsevier, 2019
Keywords
Producer subsidy, Upstream oil and natural gas models, Model recommendation, Survey
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-73086 (URN)10.1016/j.rser.2019.01.002 (DOI)
Available from: 2019-03-01 Created: 2019-03-01 Last updated: 2019-03-01Bibliographically approved
Zhao, X., Luo, D., Lu, K., Wang, X. & Dahl, C. (2019). How the removal of producer subsidies influences oil and gas extraction: A case study in the Gulf of Mexico. Energy, 166, 1000-1012
Open this publication in new window or tab >>How the removal of producer subsidies influences oil and gas extraction: A case study in the Gulf of Mexico
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2019 (English)In: Energy, ISSN 0360-5442, E-ISSN 1873-6785, Vol. 166, p. 1000-1012Article in journal (Refereed) Published
Abstract [en]

Since producer subsides can entail significant economic, fiscal, social and environmental costs, governments have been increasingly interested in removing them. Although many studies have been done on reducing consumer subsidies, subsidies to fossil fuel production are rarely discussed by scholars. This paper seeks to fill this void by developing an economic optimization model for oil and gas extraction to analyze the effects of producer subsidy removal. We forecast field-specific costs for exploration, development and production through constructing functions for the number of wells drilled and producing wells, production and economic limits. Various scenarios of phasing out producer subsidies in U.S. federal and state regulation on optimal production using field data from the Gulf of Mexicoare simulated, including removing royalty relief, amortization of geological and geophysical costs, and percentage depletion. The results show that removal of producer subsidies reduces the optimal production rate and investors' net present value and increases government revenue, but the total effect is a cost of net social benefits. Changes in both the discount rate and oil price have positive effects on optimal production, but they exert opposite effects on producer benefits. Our research is helpful for policy-makers to regulate an efficient subsidy removal path.

Place, publisher, year, edition, pages
Elsevier, 2019
Keywords
Producer subsidy removal, Oil and gas extraction, Optimization model, Number of wells drilled, Scenario analysis
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-73087 (URN)10.1016/j.energy.2018.10.139 (DOI)
Available from: 2019-03-01 Created: 2019-03-01 Last updated: 2019-03-01Bibliographically approved
Abdulbaqi, D. M., Dahl, C. & Al-Shaikh, M. (2018). Enhanced Oil Recovery (EOR) as a Stepping Stone to Carbon Capture and Sequestration (CCS). Mineral Economics, 31(1-2), 239-251
Open this publication in new window or tab >>Enhanced Oil Recovery (EOR) as a Stepping Stone to Carbon Capture and Sequestration (CCS)
2018 (English)In: Mineral Economics, ISSN 2191-2203, E-ISSN 2191-2211, Vol. 31, no 1-2, p. 239-251Article in journal (Refereed) Published
Abstract [en]

Environmental concerns about carbon emissions coupled with the oil industry’s need to secure additional CO2 for enhanced oil recovery (CO2-EOR) projects have sparked interest in the potential that CO2-EOR may have in jumpstarting carbon capture and sequestration (CCS). However, existing studies on the viability of coupling CO2-EOR with CCS have generally placed more focus on either the engineering or economic aspects of the problem. Most engineering studies focus on the technical aspects of the CO2-EOR project to produce the maximum amount of oil, while simultaneously storing the most CO2 during the production process with the economics as an afterthought, while most economic studies found have focused on a singular aspect of the issue such as impacts of exogenously varying injection rates. Furthermore, modelling efforts have stopped at the end of the productive life of the field. We build a unique two-stage dynamic optimization model, which simultaneously addresses engineering and economic policy aspects, to study the viability of coupling CO2-EOR transitioning into CCS. Our model includes a carbon tax for emissions, which becomes a subsidy for full scale sequestration after oil production has ceased; this allows us to explore the transition from CO2-EOR, our first stage, to sole CO2 sequestration in our second stage for a single field. We maximize the operator’s profits across both stages, while tracking the responsiveness of oil production and total carbon movements to both price and policy changes. We pair our optimization model with a reservoir simulation model, allowing us to mimic actual field behavior, giving our work a more realistic representation of both production and sequestration profiles. Our results suggest that small increases in the level of carbon tax can have large and discontinuous impacts on net sequestration. This stems from the observed transition from limited natural sources of CO2 to more expensive captured CO2 resulting from the implemented policy. With appropriate taxes, total volumes of captured CO2 sequestered across both stages are equivalent to 30 to 40% of the emissions from the use of the oil produced. With the credits oil producers receive from sequestering CO2, which equate to the tax, relatively high carbon taxes incentivize additional sequestration without significantly impacting the supply of oil. This, alongside maintaining a steady stream of profits, is a win-win situation for energy security and the climate.

Place, publisher, year, edition, pages
Springer, 2018
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-67838 (URN)10.1007/s13563-018-0151-1 (DOI)000445765000024 ()2-s2.0-85047208288 (Scopus ID)
Note

Validerad;2018;Nivå 2;2018-05-21 (andbra)

Available from: 2018-03-05 Created: 2018-03-05 Last updated: 2018-10-15Bibliographically approved
Akimaya, M. & Dahl, C. (2018). Estimating the Cross-Price Elasticity of Regular Gasoline with Respect to the Price of Premium Gasoline. Journal of Transport Economics and Policy, 52(2), 157-180
Open this publication in new window or tab >>Estimating the Cross-Price Elasticity of Regular Gasoline with Respect to the Price of Premium Gasoline
2018 (English)In: Journal of Transport Economics and Policy, ISSN 0022-5258, E-ISSN 1754-5951, Vol. 52, no 2, p. 157-180Article in journal (Refereed) Published
Abstract [en]

Gasoline demand has been extensively researched, yet there has been no attempt to estimate cross-price elasticities of different grades of gasoline. Such knowledge will allow accurate determination of the impact of a fuel pricing policy that has different rates of tax or subsidy depending on the gasoline grade. Using monthly data on the Mexican gasoline market from 1999 to 2014, regular gasoline demand is estimated with an ARDL model. Endogeneity of the price and structural break are also investigated. The cross-price elasticity between regular and premium gasoline is found to be 0.875, confirming high substitutability among gasoline with different grades.

Place, publisher, year, edition, pages
University of Bath, 2018
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-66518 (URN)
Note

Validerad;2018;Nivå 2;2018-08-15 (svasva)

Available from: 2017-11-09 Created: 2017-11-09 Last updated: 2018-08-16Bibliographically approved
Akimaya, M. & Dahl, C. (2017). Simulation of price controls for different grade of gasoline: The case of Indonesia. Energy Economics, 68, 373-382
Open this publication in new window or tab >>Simulation of price controls for different grade of gasoline: The case of Indonesia
2017 (English)In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 68, p. 373-382Article in journal (Refereed) Published
Abstract [en]

A gasoline subsidy is one of the most prevalent strategies for distributing welfare to the people in oil-producing countries. However well-intentioned, the policy will distort the gasoline market with the resulting inefficiencies. Furthermore, the gasoline subsidy takes a great amount of government's budget. Arguably, these funds could be spent elsewhere with a greater impact on economic growth. These governments are aware of the cost of such a policy, yet face difficulties in removing the policy because of strong resistance from the public. This paper looks at the unique case of Indonesia that only provides a subsidy for regular gasoline and in turn proposes an alternative policy that introduces a subsidy for premium gasoline at a lower rate to reduce the overall gasoline subsidy cost. There has yet to be any research that simulates price controls for gasoline with different grades. The aggregate demand for gasoline in Indonesia is replicated using a translog cost calibration approach. Simulations based on the calibrated demand are then performed and the results confirm the existence of potential savings that are largely determined by the cross-price elasticities between regular and premium gasoline. The benchmark scenario, based on a recent study of substitutability between gasoline by grades, results in an 11.5% reduction in subsidy cost of around 950 million USD with a subsidy rate of Rp 2254/liter. Furthermore, the optimal rate of subsidy for premium gasoline results in a reduction of inefficiency as consumers' welfare increase by 6.8 trillion rupiahs (or 560 million USD).

Place, publisher, year, edition, pages
Elsevier, 2017
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:ltu:diva-66470 (URN)10.1016/j.eneco.2017.10.012 (DOI)000418208100030 ()
Note

Validerad;2017;Nivå 2;2017-11-08 (andbra)

Available from: 2017-11-08 Created: 2017-11-08 Last updated: 2018-01-11Bibliographically approved
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