No abstract

No abstract

No abstract

No abstract

No abstract

No abstract

A risk analysis is presented of the peaking of world conventional oil production and the likely transition to unconventional oil resources such as oil sands, heavy oil, and shale oil. Estimates of world oil resources by the U.S. Geological Survey (USGS) and C. J. Campbell provide alternative views of ultimate world oil resources. A global energy scenario created by the International Institute of Applied Systems Analysis and the World Energy Council provides the context for the risk analysis. A model of oil resource depletion and expansion for 12 world regions is combined with a market equilibrium model of conventional and unconventional oil supply and demand. The model does not use Hubbert curves. Key variables such as the quantity of undiscovered oil and rates of technological progress are treated as probability distributions, rather than constants. Analyses based on the USGS resource assessment indicate that conventional oil production outside the Middle East is likely to peak sometime between 2010 and 2030. Even if oil production does not peak before 2020, output of conventional oil is likely to increase at a substantially slower rate after that date. Analysis based on data produced by Campbell indicates that the peak of non-Middle East production will occur before 2010. Once world conventional oil production peaks, oil sands and heavy oil from Canada, Venezuela, and Russia and, later, shale oil from the United States must expand rapidly if total world consumption of petroleum fuels is to continue to increase.

Nations around the world have used fuel economy standards, voluntary or mandatory, to control greenhouse gas emissions and oil consumption. Although the literature on fuel economy standards is extensive, little attention has been paid to analyzing the efficiency and equity of alternative forms and levels of standards. A mathematical programming model is developed and applied to measuring the effects of alternative fuel economy regulations in terms of economic efficiency and differential impacts on manufacturers in the United States. Fuel economy improvements of 20% to 33% would appear to provide net economic benefits to U.S. consumers. Unfortunately, none of the alternatives tested is clearly more equitable than the others. The uniform percentage increase (UPI) and corporate average fuel economy (CAFE) metrics disadvantage different sets of manufacturers. An industrywide, voluntary fuel economy standard [such as that of the European Union or l’Association des Constructeurs Européens d’Automobiles (European Car Manufacturers’ Association)] has the potential to be most economically efficient and to avoid transfer payments among manufacturers as well. A weight-based metric would be more expensive than CAFE or UPI metrics for the same level of fuel economy increase but might be less likely to restrict manufacturers’ future marketing options. The analysis has many limitations that should be addressed in future research.