186 research outputs found

    Modelling Crude Oil Demand in Malaysia

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    Oil has been the cheap energy source that has fired the industrial society for the last century. However, threatening signs of oil depletion has become a horror nightmare for humankind. The implications are catastrophic for industrial societies, and also the yearned for economic development of the less developed countries. When we are talking about demand, the frrst thing that will come to people mind is the price. In 2008, Malaysia petrol price rose from RM1.92 to RM2. 70 a litre, cutting down the annual subsidy for petrol to only 30 sen per litre. The subsidy For diesel was also cut, raising the diesel price from RM1.58 to RM2.58 per litre. As we can see, once the production does not satisfy the demand, the oil price will jump. This will be followed by the increase of other daily product price. Some people even taking advantages from the increment by increasing their product price without control. This will cause burden the citizen of Malaysia, especially people with low income. Because of that, there is a real need for estimating of future demand of petroleum. This will enable the policy-makers to plan for cost effective investment and operation of existing and new refineries so that the supply of crude oil can be adequate enough to meet the future demand

    Impact of Seismic Risk on Lifetime Property Values

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    This report presents a methodology for establishing the uncertain net asset value, NAV, of a real-estate investment opportunity considering both market risk and seismic risk for the property. It also presents a decision-making procedure to assist in making real-estate investment choices under conditions of uncertainty and risk-aversion. It is shown that that market risk, as measured by the coefficient of variation of NAV, is at least 0.2 and may exceed 1.0. In a situation of such high uncertainty, where potential gains and losses are large relative to a decision-maker's risk tolerance, it is appropriate to adopt a decision-analysis approach to real-estate investment decision-making. A simple equation for doing so is presented. The decision-analysis approach uses the certainty equivalent, CE, as opposed to NAV as the basis for investment decision-making. That is, when faced with multiple investment alternatives, one should choose the alternative that maximizes CE. It is shown that CE is less than the expected value of NAV by an amount proportional to the variance of NAV and the inverse of the decision-maker's risk tolerance, [rho]. The procedure for establishing NAV and CE is illustrated in parallel demonstrations by CUREE and Kajima research teams. The CUREE demonstration is performed using a real 1960s-era hotel building in Van Nuys, California. The building, a 7-story non-ductile reinforced-concrete moment-frame building, is analyzed using the assembly-based vulnerability (ABV) method, developed in Phase III of the CUREE-Kajima Joint Research Program. The building is analyzed three ways: in its condition prior to the 1994 Northridge Earthquake, with a hypothetical shearwall upgrade, and with earthquake insurance. This is the first application of ABV to a real building, and the first time ABV has incorporated stochastic structural analyses that consider uncertainties in the mass, damping, and force-deformation behavior of the structure, along with uncertainties in ground motion, component damageability, and repair costs. New fragility functions are developed for the reinforced concrete flexural members using published laboratory test data, and new unit repair costs for these components are developed by a professional construction cost estimator. Four investment alternatives are considered: do not buy; buy; buy and retrofit; and buy and insure. It is found that the best alternative for most reasonable values of discount rate, risk tolerance, and market risk is to buy and leave the building as-is. However, risk tolerance and market risk (variability of income) both materially affect the decision. That is, for certain ranges of each parameter, the best investment alternative changes. This indicates that expected-value decision-making is inappropriate for some decision-makers and investment opportunities. It is also found that the majority of the economic seismic risk results from shaking of S[subscript a] < 0.3g, i.e., shaking with return periods on the order of 50 to 100 yr that cause primarily architectural damage, rather than from the strong, rare events of which common probable maximum loss (PML) measurements are indicative. The Kajima demonstration is performed using three Tokyo buildings. A nine-story, steel-reinforced-concrete building built in 1961 is analyzed as two designs: as-is, and with a steel-braced-frame structural upgrade. The third building is 29-story, 1999 steel-frame structure. The three buildings are intended to meet collapse-prevention, life-safety, and operational performance levels, respectively, in shaking with 10%exceedance probability in 50 years. The buildings are assessed using levels 2 and 3 of Kajima's three-level analysis methodology. These are semi-assembly based approaches, which subdivide a building into categories of components, estimate the loss of these component categories for given ground motions, and combine the losses for the entire building. The two methods are used to estimate annualized losses and to create curves that relate loss to exceedance probability. The results are incorporated in the input to a sophisticated program developed by the Kajima Corporation, called Kajima D, which forecasts cash flows for office, retail, and residential projects for purposes of property screening, due diligence, negotiation, financial structuring, and strategic planning. The result is an estimate of NAV for each building. A parametric study of CE for each building is presented, along with a simplified model for calculating CE as a function of mean NAV and coefficient of variation of NAV. The equation agrees with that developed in parallel by the CUREE team. Both the CUREE and Kajima teams collaborated with a number of real-estate investors to understand their seismic risk-management practices, and to formulate and to assess the viability of the proposed decision-making methodologies. Investors were interviewed to elicit their risk-tolerance, r, using scripts developed and presented here in English and Japanese. Results of 10 such interviews are presented, which show that a strong relationship exists between a decision-maker's annual revenue, R, and his or her risk tolerance, [rho is approximately equal to] 0.0075R[superscript 1.34]. The interviews show that earthquake risk is a marginal consideration in current investment practice. Probable maximum loss (PML) is the only earthquake risk parameter these investors consider, and they typically do not use seismic risk at all in their financial analysis of an investment opportunity. For competitive reasons, a public investor interviewed here would not wish to account for seismic risk in his financial analysis unless rating agencies required him to do so or such consideration otherwise became standard practice. However, in cases where seismic risk is high enough to significantly reduce return, a private investor expressed the desire to account for seismic risk via expected annualized loss (EAL) if it were inexpensive to do so, i.e., if the cost of calculating the EAL were not substantially greater than that of PML alone. The study results point to a number of interesting opportunities for future research, namely: improve the market-risk stochastic model, including comparison of actual long-term income with initial income projections; improve the risk-attitude interview; account for uncertainties in repair method and in the relationship between repair cost and loss; relate the damage state of structural elements with points on the force-deformation relationship; examine simpler dynamic analysis as a means to estimate vulnerability; examine the relationship between simplified engineering demand parameters and performance; enhance category-based vulnerability functions by compiling a library of building-specific ones; and work with lenders and real-estate industry analysts to determine the conditions under which seismic risk should be reflected in investors' financial analyses

    Operational Earthquake Forecasting: State of Knowledge and Guidelines for Utilization

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    Following the 2009 L'Aquila earthquake, the Dipartimento della Protezione Civile Italiana (DPC), appointed an International Commission on Earthquake Forecasting for Civil Protection (ICEF) to report on the current state of knowledge of short-term prediction and forecasting of tectonic earthquakes and indicate guidelines for utilization of possible forerunners of large earthquakes to drive civil protection actions, including the use of probabilistic seismic hazard analysis in the wake of a large earthquake. The ICEF reviewed research on earthquake prediction and forecasting, drawing from developments in seismically active regions worldwide. A prediction is defined as a deterministic statement that a future earthquake will or will not occur in a particular geographic region, time window, and magnitude range, whereas a forecast gives a probability (greater than zero but less than one) that such an event will occur. Earthquake predictability, the degree to which the future occurrence of earthquakes can be determined from the observable behavior of earthquake systems, is poorly understood. This lack of understanding is reflected in the inability to reliably predict large earthquakes in seismically active regions on short time scales. Most proposed prediction methods rely on the concept of a diagnostic precursor; i.e., some kind of signal observable before earthquakes that indicates with high probability the location, time, and magnitude of an impending event. Precursor methods reviewed here include changes in strain rates, seismic wave speeds, and electrical conductivity; variations of radon concentrations in groundwater, soil, and air; fluctuations in groundwater levels; electromagnetic variations near and above Earth's surface; thermal anomalies; anomalous animal behavior; and seismicity patterns. The search for diagnostic precursors has not yet produced a successful short-term prediction scheme. Therefore, this report focuses on operational earthquake forecasting as the principle means for gathering and disseminating authoritative information about time-dependent seismic hazards to help communities prepare for potentially destructive earthquakes. On short time scales of days and weeks, earthquake sequences show clustering in space and time, as indicated by the aftershocks triggered by large events. Statistical descriptions of clustering explain many features observed in seismicity catalogs, and they can be used to construct forecasts that indicate how earthquake probabilities change over the short term. Properly applied, short-term forecasts have operational utility; for example, in anticipating aftershocks that follow large earthquakes. Although the value of long-term forecasts for ensuring seismic safety is clear, the interpretation of short-term forecasts is problematic, because earthquake probabilities may vary over orders of magnitude but typically remain low in an absolute sense (&amp;lt; 1% per day). Translating such low-probability forecasts into effective decision-making is a difficult challenge. Reports on the current utilization operational forecasting in earthquake risk management were compiled for six countries with high seismic risk: China, Greece, Italy, Japan, Russia, United States. Long-term models are currently the most important forecasting tools for civil protection against earthquake damage, because they guide earthquake safety provisions of building codes, performance-based seismic design, and other risk-reducing engineering practices, such as retrofitting to correct design flaws in older buildings. Short-term forecasting of aftershocks is practiced by several countries among those surveyed, but operational earthquake forecasting has not been fully implemented (i.e., regularly updated and on a national scale) in any of them. Based on the experience accumulated in seismically active regions, the ICEF has provided to DPC a set of recommendations on the utilization of operational forecasting in Italy, which may also be useful in other countries. The public should be provided with open sources of information about the short-term probabilities of future earthquakes that are authoritative, scientific, consistent, and timely. Advisories should be based on operationally qualified, regularly updated seismicity forecasting systems that have been rigorously reviewed and updated by experts in the creation, delivery, and utility of earthquake information. The quality of all operational models should be evaluated for reliability and skill by retrospective testing, and they should be under continuous prospective testing against established long-term forecasts and alternative time-dependent models. Alert procedures should be standardized to facilitate decisions at different levels of government and among the public. Earthquake probability thresholds should be established to guide alert levels based on objective analysis of costs and benefits, as well as the less tangible aspects of value-of-information, such as gains in psychological preparedness and resilience. The principles of effective public communication established by social science research should be applied to the delivery of seismic hazard information

    Emerging Issues in Public Policy: The Environment, Water, and the Coast, 1977-1982

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    This collection, titled The Environment, Water, and the Coast, presents a selection of the Institute\u27s Public Affairs Report on these topics for 1977-1982

    Emerging Issues in Public Policy: The Environment, Water, and the Coast, 1977-1982

    Get PDF
    This collection, titled The Environment, Water, and the Coast, presents a selection of the Institute\u27s Public Affairs Report on these topics for 1977-1982
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