The gas chain: influence of its specificities on the liberalisation process. NBB Working Papers. No. 122, 16 November 2007

Like other network industries, the European gas supply industry has been liberalised, along the lines of what has been done in the United Kingdom and the United States, by opening up to competition the upstream and downstream segments of essential transmission infrastructure. The aim of this first working paper is to draw attention to some of the stakes in the liberalisation of the gas market whose functioning cannot disregard the network infrastructure required to bring this fuel to the consumer, a feature it shares with the electricity market. However, gas also has the specific feature of being a primary energy source that must be transported from its point of extraction. Consequently, opening the upstream supply segment of the market to competition is not so obvious in the European context, because, contrary to the examples of the North American and British gas markets, these supply channels are largely in the hands of external suppliers and thus fall outside the scope of EU legislation on the liberalisation and organisation of the internal market in gas. Competition on the downstream gas supply segment must also adapt to the constraints imposed by access to the grid infrastructure, which, in the case of gas in Europe, goes hand in hand with the constraint of dependence on external suppliers. Hence the opening to competition of upstream and downstream markets is not "synchronous", a discrepancy which can weaken the impact of liberalisation. Moreover, the separation of activities necessary for ensuring free competition in some segments of the market is coupled with major changes in the way the gas chain operates, with the appearance of new markets, new price mechanisms and new intermediaries. Starting out from a situation where gas supply was in the hands of vertically-integrated operators, the new regulatory framework that has been set up must, on the one hand, ensure that competitive forces can be given free rein, and, on the other hand, that free and fair competition helps the gas chain to operate coherently, at lower cost and in the interests of consumers, for whom the stakes are high as natural gas is an important input for many industrial manufacturing processes, even a "commodity" almost of basic necessity

Overlapping Free Trade Agreements of Singapore-USA-Japan: A Computational Analysis

The proliferation of overlapping free trade agreements (FTA) in the recent years has led to hub-and-spokes (HAS) throughout the world. Being avid subscribers to FTAs, many countries in the Asia-Pacific region including the USA, Japan, Singapore, South Korea, Thailand and Australia have become trade hubs to their partners who are in turn relegated to spoke status. In this paper, we question whether being a hub is welfare optimal for a small and open economy like Singapore compared to membership in a single bilateral FTA or a multi- member free trade zone. Within this context, we use a computable general equilibrium model to examine the welfare implications of the triangular trade relationship of the USA, Singapore and Japan. This is facilitated by the Japan- Singapore Economic Partnership Agreement, the USA-Singapore Free Trade Agreement, and a hypothetical USA-Japan Economic Partnership Agreement. The analysis is extended to incorporate “super-hub” effects; that is, the spoke countries can be trade hubs in other HAS systems. The experiment reveals that hub status generates positive welfare gain and is the highest Singapore can get from the trade configurations considered. Meanwhile, Japan loses more than the USA when both are relegated to spoke status. These findings prove robust under different market structures and production technologies, deeper economic integration, “super-hub” effects, as well as, uncertainty in the key model parameters and the extent of trade liberalisation shocks.hub and spokes; overlapping agreements; free trade; preference dilution; computable general equilibrium; GTAP; systems; trade configurations

The gas chain : influence of its specificities on the liberalisation process

Like other network industries, the European gas supply industry has been liberalised, along the lines of what has been done in the United Kingdom and the United States, by opening up to competition the upstream and downstream segments of essential transmission infrastructure. The aim of this first working paper is to draw attention to some of the stakes in the liberalisation of the gas market whose functioning cannot disregard the network infrastructure required to bring this fuel to the consumer, a feature it shares with the electricity market. However, gas also has the specific feature of being a primary energy source that must be transported from its point of extraction. Consequently, opening the upstream supply segment of the market to competition is not so obvious in the European context, because, contrary to the examples of the North American and British gas markets, these supply channels are largely in the hands of external suppliers and thus fall outside the scope of EU legislation on the liberalisation and organisation of the internal market in gas. Competition on the downstream gas supply segment must also adapt to the constraints imposed by access to the grid infrastructure, which, in the case of gas in Europe, goes hand in hand with the constraint of dependence on external suppliers. Hence the opening to competition of upstream and downstream markets is not "synchronous", a discrepancy which can weaken the impact of liberalisation. Moreover, the separation of activities necessary for ensuring free competition in some segments of the market is coupled with major changes in the way the gas chain operates, with the appearance of new markets, new price mechanisms and new intermediaries. Starting out from a situation where gas supply was in the hands of vertically-integrated operators, the new regulatory framework that has been set up must, on the one hand, ensure that competitive forces can be given free rein, and, on the other hand, that free and fair competition helps the gas chain to operate coherently, at lower cost and in the interests of consumers, for whom the stakes are high as natural gas is an important input for many industrial manufacturing processes, even a "commodity" almost of basic necessity.network industries, gas industry, gas utility, liberalisation, regulation, deregulation, market structure, European gas supply, oligopoly, OPEG

Price Relationships and SpilloverEffects of PriceVolatilities in Iran's Rice Market

Rice plays an especial role in Iranian households' nutrition basket. The volatilities of its price during recent years caused consumers' dissatisfaction. This paper investigates spillover effects of price volatilities (at the wholesale and retail levels) in the Guilan Province rice market. The Generalized Autoregressive Conditional Hetroscedasitic (GARCH) model was used for the monthly time period of 1999 to 2013. As the results of the unit root tests showed, the monthly time series of Sadri-Momtaz variety wholesale price and Sadri-Momtaz variety retail price have unit roots in zero frequency or they are I(1). Considering the amounts of trace and maximum eigen values statistics, there is a long-run relationship between SadriMomtaz variety wholesale and retail monthly price time series. Coefficients of normalized cointegration vector showed that, with one percent increase (decrease) in retail price, it would be likely that wholesale price could increase (decrease) by 0.99 percent. Results of GRACH model revealed that spillover effects exist from the retail price to the wholesale price and vice versa. In addition, price volatility in retail and wholesale levels had positive and significant effects on its own level price volatility. Accordingly, providing proper policy packages in both supply and demand sides were advised

Strategic development in the petrochemical industry

Imperial Users onl

Planning the petrochemical industry in Kuwait using economic and safety objectives

Kuwait, one of the major oil producing countries in the Middle East, is in the process of globalizing its operation in petroleum and petrochemical production. Kuwaiti officials have expressedin terest in acceleratingd evelopmento f the country's relatively small petrochemical industry. The development is to produce new valuable chemicals from the available basic feedstock chemicals. Two of the important planning objectives for a petrochemical industry are the economic gain and the industrial safety involved in the development. For the economic evaluation of the industry, and for the proposed final product chemicals in the development, a long-range plan is needed to identify trends in chemical prices. The chemical prices are related to the oil price, which is considered an important motivator for the whole petrochemical industry. Price trend modelling is performed to be able to forecast these prices for the planning horizon. Safety, as the second objective, is considered in this study as the risk of chemical plant accidents. Risk, when used as an objective fimction, has to have a simple quantitative form to be easily evaluated for a large number of possible plants in the petrochemical network. The simple quantitative form adopted is a risk index that enables the number of people affected by accidents resulting in chemical releases to be estimated. The two objectives, when combined with constraints describing the desired or the possible structure of the industry, will form an optimization model. For this study, the petrochemical planning model consists of a Mixed Integer Linear Programming (MILP) model to select the best routes from the basic feedstocks available in Kuwait to the desired final products with multiple objective functions. The economic and risk objectives usually have conflicting needs. The presence of several conflicting objectives is typical when planning. In many cases, where optimization techniques are utilized, the multiple objectives are simply aggregated into one single objective function. Optimization is then conducted to get one optimal result. However, many results are obtained for different aggregations of the objectives and eventually a set of solutions is obtained. Other tools, such as strategic tools, are used to select the best solution from the set. This study, which is concerned with economic and risk objectives, leads to the identification of important factors that affect the petrochemical industry. Moreover, the procedure, of modelling and model solution, can be used to simplify the decisionmaking for complex or large systems such as the petrochemical industry. It presents the use of simple multiple objective optimization tools within a petrochemical planning tool formulated as a mixed integer linear programming model. Such a tool is particularly useful when the decision-making task must be discussed and approved by officials who often have little experience with optimization theories

Complexity Aided Design: the FuturICT Technological Innovation Paradigm

"In the next century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies--even our dreams ....What will the earth's new skin permit us to feel? How will we use its surges of sensation? For several years--maybe for a decade--there will be no central nervous system to manage this vast signaling network. Certainly there will be no central intelligence...some qualities of self-awareness will emerge once the Net is sensually enhanced. Sensuality is only one force pushing the Net toward intelligence". These statements are quoted by an interview by Cherry Murray, Dean of the Harvard School of Engineering and Applied Sciences and Professor of Physics. It is interesting to outline the timeliness and highly predicting power of these statements. In particular, we would like to point to the relevance of the question "What will the earth's new skin permit us to feel?" to the work we are going to discuss in this paper. There are many additional compelling questions, as for example: "How can the electronic earth's skin be made more resilient?"; "How can the earth's electronic skin be improved to better satisfy the need of our society?";"What can the science of complex systems contribute to this endeavour?

Complexity aided design: The FuturICT technological innovation paradigm

"In the next century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies-even our dreams ....What will the earth's new skin permit us to feel? How will we use its surges of sensation? For several years-maybe for a decade-there will be no central nervous system to manage this vast signaling network. Certainly there will be no central intelligence...some qualities of self-awareness will emerge once the Net is sensually enhanced. Sensuality is only one force pushing the Net toward intelligence”. These statements are quoted by an interview by Cherry Murray, Dean of the Harvard School of Engineering and Applied Sciences and Professor of Physics. It is interesting to outline the timeliness and highly predicting power of these statements. In particular, we would like to point to the relevance of the question "What will the earth's new skin permit us to feel?” to the work we are going to discuss in this paper. There are many additional compelling questions, as for example: "How can the electronic earth's skin be made more resilient?”; "How can the earth's electronic skin be improved to better satisfy the need of our society?”;"What can the science of complex systems contribute to this endeavour?” Graphical abstrac