What drove down natural gas production in Argentina?

We address the causes behind the drop in natural gas production in Argentina since 2004, starting from a basic supply model that depends on economic incentives, and adding control variables related to different potential explanations such as firm specific (or area specific) behavior and the absence of contractual renegotiation of concessions extensions. Results from a panel of the change in natural gas production in all areas between 2004 and 2009 show that once a basic supply-past production (or reserve) relationship is modeled, other often mentioned effects become non-significant. Chiefly among them are firm specific effects and the role of renegotiations of concessions extensions. We find preliminary evidence that post 2007 renegotiations –which are associated with better price prospects- may have had an impact in correcting production decline in one leader firm. Other significant effects come from a negative impact of a change in the seasonality of production that in turn can be related to demand rationing and to price controls. Overall, the evidence suggests that the observed downcycle conforms to the prediction of a simple model of depressed economic incentives acting upon mature conventional natural gas fields and hindering investment in reserve additions or new technologies.Natural gas, peak production,supply behaviour

Effects of passthrough pricing rules on gas purchase decisions from different basins

The paper is organised as follows. Before we proceed to the main analysis, we present the reader a brief introduction to the institutional setting of the gas industry and natural gas regulation in Argentina. In section 3 we show reference results for a basic model with only one-basin and two final markets (regulated and unregulated). In section 4 we present a model of two basins and two markets adapted to the argentine case. In section 5 we address the consequences of moving from a variable to a fixed weights rule. Finally section 6 concludes and draws the main implications in light of some evidence obtained from the argentine case.Departamento de Economí

Long Term Strategic Policies for Global Competition: Comments

This presentation comments on Charles Sabel's "Long Term Strategic Policies for Global Competition." The document points out a series of insights, methodologies, and suggestions on three aspects: new stylized facts of economic development, developing economies as Toyoda systems, and clues to guide a search for suitable development policy. Then, the author expands and comments using Argentina as a case. This presentation was presented at the LAEBA Second Annual Conference, held on November, 2005 in Buenos Aires, Argentina.Integration & Trade, Economic Development & Growth, global competition, development policy, strategic policy, export

Energy populism and household welfare

We study a cycle of subsidized energy prices and estimate its welfare impact on households in the Buenos Aires Metropolitan Region. A simple framework explains its emergence in terms of the preference of a median household (voter) for receiving transfer gains followed by a future flow of transfer losses. We evaluate actual transfers and welfare effects that a departure of prices of natural gas and electricity generation from opportunity costs since 2003 had on households and explore the impact of a way back to opportunity cost pricing.energy prices, distortions, subsidies, welfare effects

Natural gas supply behavior under interventionism: The case of Argentina

We address the causes behind the significant drop in natural gas production in the 2000s in Argentina, starting from a basic supply model that depends on economic incentives, and adding control variables related to different potential explanations such as firm specific (or area specific) behavior and the role of contractual renegotiation of concessions extensions. Results from a panel data of production areas between 2003 and 2013 show that once a basic supply-past production (or reserve) relationship is modeled, other often mentioned effects become non-significant. Chiefly among them are firm specific effects that were used as a central argument for the nationalization of YPF in 2012. Rather, the evidence shows that the observed downcycle conforms to the prediction of a simple model of depressed economic incentives acting upon mature conventional natural gas fields and hindering investment in reserve additions or new technologies. The results are robust to the nationalization of YPF, after which aggregate production continued a downward trend for two years, although are insufficient to capture an ongoing reconfiguration of incentives and risks in the forthcoming transition to shale gas production.Facultad de Ciencias Económica

Estructuras tarifarias bajo stress

Las crisis macroeconómicas en la Argentina han puesto históricamente a la tarificación de los servicios públicos en una situación de stress, iniciando un ciclo tarifario real con cambios de la estructura tarifaria en varias dimensiones. Se resumen algunos hechos estilizados y luego trabaja sobre un modelo simple de economía pública que puede usarse para representar analíticamente lo observado. Se muestra que las diferencias o demoras en el patrón actual de comportamiento dependen del relajamiento de restricciones de beneficios y de presupuesto.Macroeconomic crises in Argentina put public utility pricing under stress giving way to a cycle in real rates with changes in price structures in several dimensions. We summarize some stylized facts and then work on a simple model of public economics that can be used to represent observed phenomena in analytical terms. Some differences or delays in the current pattern of behavior are shown to depend on a relaxation of profit and budget constraints.Instituto de Investigaciones Económica

Effects of passthrough pricing rules on gas purchase decisions from different basins

The paper is organised as follows. Before we proceed to the main analysis, we present the reader a brief introduction to the institutional setting of the gas industry and natural gas regulation in Argentina. In section 3 we show reference results for a basic model with only one-basin and two final markets (regulated and unregulated). In section 4 we present a model of two basins and two markets adapted to the argentine case. In section 5 we address the consequences of moving from a variable to a fixed weights rule. Finally section 6 concludes and draws the main implications in light of some evidence obtained from the argentine case.Departamento de Economí

Estructuras tarifarias bajo stress

Las crisis macroeconómicas en la Argentina han puesto históricamente a la tarificación de los servicios públicos en una situación de stress, iniciando un ciclo tarifario real con cambios de la estructura tarifaria en varias dimensiones. Se resumen algunos hechos estilizados y luego trabaja sobre un modelo simple de economía pública que puede usarse para representar analíticamente lo observado. Se muestra que las diferencias o demoras en el patrón actual de comportamiento dependen del relajamiento de restricciones de beneficios y de presupuesto.Macroeconomic crises in Argentina put public utility pricing under stress giving way to a cycle in real rates with changes in price structures in several dimensions. We summarize some stylized facts and then work on a simple model of public economics that can be used to represent observed phenomena in analytical terms. Some differences or delays in the current pattern of behavior are shown to depend on a relaxation of profit and budget constraints