Recent Publications and Reports
In addition to Pacwest Oil Data and the Pacwest Directory, EII staff produce a variety of reports and papers for presentation, publication, and delivery to clients. Below are some recent examples by EII economists:
An Introduction to the Global Oil and Gas Industry , available from PennWell Publications, January 2010. Dr. Van Vactor’s insightful book on how the oil and gas industry is organized and how its markets are structured. Included is an outlook for the industry’s future.
"Energy and the Dodd-Frank Act" surveys the complex regulatory changes anticipated from the Dodd-Frank Act. The Act mandates over 350 new regulatory rules from the CFTC, FTC and other agenices that regulate the financial industry. The paper discusses the likely implications for the energy industry as the Act is implemented. Published by Platts Energy Economist, August 2010.
"Piecemeal March to Cap-and-Trade" describes the three regional cap-and-trade programs in North America. The paper evaluates their efficiency and the distortions arising from a regional approach. Published by Platts Energy Economist, June 2010.
"Fat Tails" reviews daily changes in oil and gas prices. Do historical price changes follow a normal distribution? This is significant because the underlying thesis of the Efficient Market Hypothesis (EMH) and the calculation of many derivative product values depend on assumed normality. In this paper, Dr. Van Vactor demonstrates that historical price changes are not normally distributed. Instead, major price changes reflect unexpected events. The paper underscores the importance of moderating statistical calculations with fundamental analysis. Published by Platts Energy Economist, January 2010.
“The 2008 Global Financial Crisis” By Fall 2008, the global economy had endured three waves of what Dr. Van Vactor characterizes as a possible four-wave economic tsunami. First, there was the collapse of the U.S. sub-prime mortgage market, followed by failures related to the massive, complex, and unregulated trade in Credit Default Swaps. Recession (the third wave), imminent in the developed world, looked likely to swamp high-growth developing countries as well. This piece reaches back to the Enron scandal for an interesting perspective on the derivatives trade, and speculates on what the financial crisis will mean for the energy industry. Published by the Oil and Gas Financial Journal,, January 2009.
"Electric Vehicles and Peak Oil Demand" , published by USAEE, October 2008. In this article, Dr. Van Vactor debunks the idea that peak oil supplies will constrain energy use and economic development. He illustrates the point by analyzing the likely costs and pace of development of electric vehicles.
"The Short and Long of Oil Prices" Short-term oil price predictions of $150 per barrel or higher are suspect because of the drag such prices would place on the world economy. And looking further into the future, oil prices should hold to much lower (inflation-adjusted) levels as consumers reduce usage by adopting alternative end-use technologies. Dr. Van Vactor lays out this case in a presentation delivered to the Northwest Power and Conservation Council in August 2008.
"A Schoolboy's History of Oil Prices" , a primer on the development of modern oil markets as well as context for the current sustained rise in oil prices. Dr. Van Vactor briefly covers the evolution of oil markets from before the 1973 Arab oil embargo to the present.
"How Oil from the North went South" , Dr. Van Vactor's take on the rising cost of oil, its effect on energy consumption patterns, and its stimulation of alternative energy sources in the transport sector. It briefly touches on how high oil prices reinvigorated development of alternatives, such as oil sands, and how they will soon spur a move to hybrid and plug-in electric vehicles. Presented to the Electric Policy Research Group, University of Cambridge, March 3, 2008. .
"Energy Security and National Security" . Given that oil is now a commodity, with immediate accessibility to those that have the cash, why is energy security an issue? For most countries, reduced dependence on foreign oil is both impractical and costly. The desire to do something, coupled with unacceptable costs if anything substantive actually gets done, has produced an unusually clouded mix of sanctimonious plans, unfinished projects, and abandoned policies. A presentation to the International Association for Energy Economics (IAEE) Conference, Wellington, New Zealand, Feb. 18, 2007.
Flipping the Switch: The Transformation of Energy Markets , the Doctoral dissertation of Samuel A. Van Vactor, examines the development of modern institutions and conventions that govern energy and natural resource commodity markets today. Tracing their growth back to the Oil Crisis of 1973, Dr. Van Vactor examines the growing efficiency in markets and their natural development, using transaction cost economics. Submitted and accepted February 12, 2004 at Darwin College, University of Cambridge.
"Held Hostage: Arms and Infrastructure - Oil Development in Sudan and Chad" , by Samuel A. Van Vactor, examines how current methods of funding oil development projects in developing countries has the unintended side effect of fueling regional arms races, civil wars, and even genocide. Presentation at the IAEE annual conference, plenary session, Prague, June 2003.
"How to Make Power Markets Competitive" , with Seth Blumsack, July 2002. Chapter in the Electric Power Research Institute's (EPRI's) Electricity Pricing in Transition, Kluwer Academic Publishers, examines approaches to improving competition in modern energy markets.
"Will the Snow Tiger Come Down from the Mountain? Japan’s Plan to Liberalize Energy Markets" , published in the Oxford Energy Forum, May 2001, takes a close look at Japanese energy policy in the face of a changing demand paradigm and the challenges the nation faces in conforming to the Kyoto Protocols.
"Money, Power and Trade: What You Never Knew About the Western Energy Crisis" , written with Fred Pickel and published in Public Utilities Fortnightly, May 1, 2001. An analysis of the reasons behind the price spikes in the Western electricity markets in 2000 and early 2001 from an economist's perspective - before the evidence of manipulation by market participants came to light.
"Power Price Spikes: Aberration or Prophecy?" , by Samuel A. Van Vactor, analyzes Summer of 2000 trends in the Western electricity industry in hearings before the Oregon Public Utility Commission, August 14, 2000.
"Electricity Restructuring in the United States" , Financial Times Energy Economist Briefings, November 1998. A tour of the various incarnations of the push in the United States toward power market deregulation.
"Viability of Natural-Gas Projects for Northeast Asia" , by Samuel A. Van Vactor and Arlon Tussing, and an accompanying PowerPoint presentation , presented at the Fourth International Conference on Northeast Asian Natural-Gas Pipelines, Ulaanbaatar, Mongolia, August 16-18, 1998.
Natural Gas in Asia: Facts and Fiction , by Sam Van Vactor, et. al., edited by Dona K. Lehr. Pacific Economic Cooperation Council (PECC), 1998, a book examinining the Asian natural gas industry.
"South Korea's Thirst for Gas" , with Dr. Arlon R. Tussing, from Financial Times Energy Economist - An International Analysis, March 1998
"Evolution of Wholesale Power Price Structures in the Western Power Market" with Dona K. Lehr. History and analysis of the development of the western wholesale power market.
Natural Gas (De)Regulation in South Africa: A Wolf in Sheep's Clothing, a study of the development of an integrated natural gas system in Southern Africa.
"Prospective on world energy markets" , with Dr. Arlon R. Tussing, OPEC Review, Autumn 1990. A prediction that in real terms and in the long run, prices for energy would continue to fall as new sources of energy become available and economic.
Spot and Contract Crude-Oil Markets in the Petroleum Industry with Ronald D. Ripple. Published in "Proceedings: Energy Supply in the 1990s and Beyond," International Association for Energy Economics, 11th Annual International Conference, June 26-28, 1989, Caracas Venezuela.
Retrospective on Oil Prices , with Dr. Arlon R. Tussing, Contemporary Policy Issues, July 1987, published by the Western Economic Association International and California State University Long Beach.
"Mergers & Acquisitions in the Petroleum Industry" , of the Papers and Proceedings of the Eighth Annual North American Conference of the IAEE: "The Changing World Economy", Nov. 19-21, 1986 at the Massachusetts Institute of Technology, Cambridge, Massachusetts. Analyzed the wave of consolidation in the petroleum industry from 1982 to 1985.
Pricing Royalty Crude Oil by Samuel A. Van Vactor. This report, written for the American Petroleum Institute, examines methodological issues in valuing California crude oils for royalty purposes. The report was written in response to a Notice of Proposed Rulemaking (NOPR) by the U.S. Minerals Management Services. In addition, Samuel A. Van Vactor filed two reports as Comments on Mineral Management Service's Notice of Proposed Rulemaking (NOPR) Establishing Oil Value for Royalty Due on Federal Leases: