Energy security policies in EU-25 - the expected cost of oil supply disruptions
Journal article, 2010

A framework for analyzing the impact on the expected cost of oil disruption by energy policies in EU-25 is developed. The framework takes into account how energy policies affect the oil market, the expected oil price increase, and the disruption costs. OPEC’s strategic behaviour is modelled as a dominant firm, and the model includes price interdependence between different energy commodities to better estimate the cost of an oil disruption. It is found that substituting pellets for oil in households and using imported sugar cane ethanol are cost-efficient policies if greenhouse gas benefits are included. Domestically produced wheat ethanol is not found to be cost-efficient even if both the expected cost of oil disruption and greenhouse gas benefits are included, the same also holds for hybrid vehicles. The gross expected economic gain of the policies is found to be between 9 and 22 €/bbl oil replaced.

climate policy

oil disruption

Energy security

Author

Fredrik Hedenus

Chalmers, Energy and Environment, Physical Resource Theory

Christian Azar

Chalmers, Energy and Environment, Physical Resource Theory

Daniel Johansson

Chalmers, Energy and Environment, Physical Resource Theory

Energy Policy

0301-4215 (ISSN)

Vol. 38 3 1241-1250

Subject Categories

Other Environmental Engineering

DOI

10.1016/j.enpol.2009.01.030

More information

Created

10/7/2017