IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2022-02-50.html
   My bibliography  Save this article

The Use of Fuzzy Logic to Assess Sustainability of Oil and Gas Resources (R/P): Technical, Economic and Political Perspectives

Author

Listed:
  • Talal AL-Bazali

    (College of Engineering and Petroleum, Petroleum Engineering Department, Kuwait University, Kuwait City, Kuwait.)

  • Mohammad Al-Zuhair

    (College of Business Administration, Department of Finance & Financial Institutions, Kuwait University, Kuwait City, Kuwait.)

Abstract

This work presents, based on fuzzy logic, an equation that combine the impact of both technical and non-technical factors on sustainability of oil and gas. The classical formula for oil and gas sustainability factor (a = R/P) was fuzzified to include a risk factor (b) that takes into account risks associated with economic health and political stability of oil and gas producing countries. This was made possible through the introduction of risk impact factor (g) and risk impact weight % (w) into the overall risk factor (b). Results showed that economic factors: oil-revenue dependence; public debt; and institutional structure, all impact oil and gas sustainability. The level of economic diversity was found to play a major role on oil and gas sustainability. It was also shown that political stability should not be overlooked as it could indirectly impact oil and gas sustainability. This is especially true for young political regimes due to lack of long-term clear (institutional) vision; proper strategic planning; in-house knowledge and experience; and decision-making flexibility. A hypothetical case study was presented to show how our fuzzified formula works. Results showed that sustainability factor (?) dropped by 45.1% when including economic health and political stability risk factors.

Suggested Citation

  • Talal AL-Bazali & Mohammad Al-Zuhair, 2022. "The Use of Fuzzy Logic to Assess Sustainability of Oil and Gas Resources (R/P): Technical, Economic and Political Perspectives," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 449-458, March.
    • Handle: RePEc:eco:journ2:2022-02-50
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/12847/6709
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/12847
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Feng, Yi, 1997. "Democracy, Political Stability and Economic Growth," British Journal of Political Science, Cambridge University Press, vol. 27(3), pages 391-418, July.
    2. Francesco Caselli & Andrea Tesei, 2016. "Resource Windfalls, Political Regimes, and Political Stability," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 573-590, July.
    3. Bouri, Elie & Kachacha, Imad & Roubaud, David, 2020. "Oil market conditions and sovereign risk in MENA oil exporters and importers," Energy Policy, Elsevier, vol. 137(C).
    4. Kaufmann, Robert K. & Bradford, Andrew & Belanger, Laura H. & Mclaughlin, John P. & Miki, Yosuke, 2008. "Determinants of OPEC production: Implications for OPEC behavior," Energy Economics, Elsevier, vol. 30(2), pages 333-351, March.
    5. Apergis, Nicholas & Payne, James E., 2014. "The oil curse, institutional quality, and growth in MENA countries: Evidence from time-varying cointegration," Energy Economics, Elsevier, vol. 46(C), pages 1-9.
    6. Robert V. Breunig & Tse Chern Chia, 2015. "Sovereign Ratings and Oil-Exporting Countries: The Effect of High Oil Prices on Ratings," International Review of Finance, International Review of Finance Ltd., vol. 15(1), pages 113-138, March.
    7. Bentley, R. W., 2002. "Global oil & gas depletion: an overview," Energy Policy, Elsevier, vol. 30(3), pages 189-205, February.
    8. Owen, Nick A. & Inderwildi, Oliver R. & King, David A., 2010. "The status of conventional world oil reserves--Hype or cause for concern?," Energy Policy, Elsevier, vol. 38(8), pages 4743-4749, August.
    9. Behrouzifar, Morteza & Siami Araghi, Ebrahim & Emami Meibodi, Ali, 2019. "OPEC behavior: The volume of oil reserves announced," Energy Policy, Elsevier, vol. 127(C), pages 500-522.
    10. Emma Hooper, 2015. "Oil and Gas, which is the Belle of the Ball ? The Impact of Oil and Gas Reserves on Sovereign Risk," Working Papers halshs-01211506, HAL.
    11. Emma Hooper, 2015. "Oil and Gas, which is the Belle of the Ball ? The Impact of Oil and Gas Reserves on Sovereign Risk," AMSE Working Papers 1540, Aix-Marseille School of Economics, France, revised 02 Oct 2015.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ponle Henry Kareem & Mumtaz Ali & Turgut Tursoy & Wagdi Khalifa, 2023. "Testing the Effect of Oil Prices, Ecological Footprint, Banking Sector Development and Economic Growth on Energy Consumptions: Evidence from Bootstrap ARDL Approach," Energies, MDPI, vol. 16(8), pages 1-19, April.
    2. Pruethsan Sutthichaimethee, 2024. "A Framework on Setting Strategies for Enhancing the Efficiency of State Power use in Thailand’s Pursuit of a Green Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 108-120, January.
    3. Mohammad Al-Zuhair & Talal AL-Bazali, 2022. "Causality Between Energy Consumption and Economic Growth: The Case of Kuwait," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 22-29, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheuathonghua, Massaporn & de Boyrie, Maria E. & Pavlova, Ivelina & Wongkantarakorn, Jutamas, 2022. "Extreme risk spillovers from commodity indexes to sovereign CDS spreads of commodity dependent countries: A VAR quantile analysis," International Review of Financial Analysis, Elsevier, vol. 80(C).
    2. Bouri, Elie & Kachacha, Imad & Roubaud, David, 2020. "Oil market conditions and sovereign risk in MENA oil exporters and importers," Energy Policy, Elsevier, vol. 137(C).
    3. Pavlova, Ivelina & de Boyrie, Maria E. & Parhizgari, Ali M., 2018. "A dynamic spillover analysis of crude oil effects on the sovereign credit risk of exporting countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 10-22.
    4. Zhang, Zhengyong & Shahzad, Syed Jawad Hussain & Bouri, Elie, 2022. "Tail risk transmission from commodity prices to sovereign risk of emerging economies," Resources Policy, Elsevier, vol. 78(C).
    5. Lin, Boqiang & Wang, Ting, 2012. "Forecasting natural gas supply in China: Production peak and import trends," Energy Policy, Elsevier, vol. 49(C), pages 225-233.
    6. Antonakakis, Nikolaos & Cunado, Juncal & Filis, George & Gracia, Fernando Perez de, 2017. "Oil dependence, quality of political institutions and economic growth: A panel VAR approach," Resources Policy, Elsevier, vol. 53(C), pages 147-163.
    7. Bouri, Elie & Jalkh, Naji & Roubaud, David, 2019. "Commodity volatility shocks and BRIC sovereign risk: A GARCH-quantile approach," Resources Policy, Elsevier, vol. 61(C), pages 385-392.
    8. Bouri, Elie & Shahzad, Syed Jawad Hussain & Raza, Naveed & Roubaud, David, 2018. "Oil volatility and sovereign risk of BRICS," Energy Economics, Elsevier, vol. 70(C), pages 258-269.
    9. Antonakakis, Nikolaos & Cunado, Juncal & Filis, George & Perez de Gracia, Fernando, 2015. "The Resource Curse Hypothesis Revisited: Evidence from a Panel VAR," MPRA Paper 72085, University Library of Munich, Germany.
    10. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," Working Papers hal-03144330, HAL.
    11. Alexandra Brausmann & Elise Grieg, 2020. "Resource Discoveries and the Political Survival of Dictators," CER-ETH Economics working paper series 20/345, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    12. Yang, Guangfei & Li, Xianneng & Wang, Jianliang & Lian, Lian & Ma, Tieju, 2015. "Modeling oil production based on symbolic regression," Energy Policy, Elsevier, vol. 82(C), pages 48-61.
    13. Mansour-Ichrakieh, Layal, 2020. "The impact of Israeli Geopolitical Risks on the Lebanese Financial Market: A Destabilizer Multiplier," MPRA Paper 99376, University Library of Munich, Germany.
    14. Wang, Ting & Lin, Boqiang, 2014. "Impacts of unconventional gas development on China׳s natural gas production and import," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 546-554.
    15. Pazouki, Azadeh & Zhu, Xiaoxian, 2022. "The dynamic impact among oil dependence volatility, the quality of political institutions, and government spending," Energy Economics, Elsevier, vol. 115(C).
    16. Lotfali Agheli, 2017. "Political Stability, Misery Index and Institutional Quality: Case Study of Middle East and North Africa," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 30-46.
    17. Sena, Marcelo Fonseca Monteiro de & Rosa, Luiz Pinguelli & Szklo, Alexandre, 2013. "Will Venezuelan extra-heavy oil be a significant source of petroleum in the next decades?," Energy Policy, Elsevier, vol. 61(C), pages 51-59.
    18. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," CERDI Working papers hal-03144330, HAL.
    19. Ciccone, Antonio, 2018. "International Commodity Prices and Civil War Outbreak: New Evidence for Sub-Saharan Africa and Beyond," CEPR Discussion Papers 12625, C.E.P.R. Discussion Papers.
    20. Ugo Bardi & Alessandro Lavacchi, 2009. "A Simple Interpretation of Hubbert’s Model of Resource Exploitation," Energies, MDPI, vol. 2(3), pages 1-16, August.

    More about this item

    Keywords

    fuzzy logic; oil and gas sustainability; political stability; oil and gas sustainability;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2022-02-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.