IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v11y2018i11p2967-d179665.html
   My bibliography  Save this article

Ethylene Supply in a Fluid Context: Implications of Shale Gas and Climate Change

Author

Listed:
  • Gillian Foster

    (Institute for Ecological Economics, Department of Socioeconomics, Vienna University of Economics and Business, Welthandelsplatz 1, 1020 Vienna, Austria)

Abstract

The recent advent of shale gas in the U.S. has redefined the economics of ethylene manufacturing globally, causing a shift towards low-cost U.S. production due to natural gas feedstock, while reinforcing the industry’s reliance on fossil fuels. At the same time, the global climate change crisis compels a transition to a low-carbon economy. These two influencing factors are complex, contested, and uncertain. This paper projects the United States’ (U.S.) future ethylene supply in the context of two megatrends: the natural gas surge and global climate change. The analysis models the future U.S. supply of ethylene in 2050 based on plausible socio-economic scenarios in response to climate change mitigation and adaptation pathways as well as a range of natural gas feedstock prices. This Vector Error Correction Model explores the relationships between these variables. The results show that ethylene supply increased in nearly all modeled scenarios. A combination of lower population growth, lower consumption, and higher natural gas prices reduced ethylene supply by 2050. In most cases, forecasted CO 2 emissions from ethylene production rose. This is the first study to project future ethylene supply to go beyond the price of feedstocks and include socio-economic variables relevant to climate change mitigation and adaptation.

Suggested Citation

  • Gillian Foster, 2018. "Ethylene Supply in a Fluid Context: Implications of Shale Gas and Climate Change," Energies, MDPI, vol. 11(11), pages 1-17, November.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:11:p:2967-:d:179665
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/11/11/2967/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/11/11/2967/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Søren Johansen, 2005. "Interpretation of Cointegrating Coefficients in the Cointegrated Vector Autoregressive Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 93-104, February.
    2. Elmar Kriegler & Jae Edmonds & Stéphane Hallegatte & Kristie Ebi & Tom Kram & Keywan Riahi & Harald Winkler & Detlef Vuuren, 2014. "A new scenario framework for climate change research: the concept of shared climate policy assumptions," Climatic Change, Springer, vol. 122(3), pages 401-414, February.
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. Broeren, M.L.M. & Saygin, D. & Patel, M.K., 2014. "Forecasting global developments in the basic chemical industry for environmental policy analysis," Energy Policy, Elsevier, vol. 64(C), pages 273-287.
    5. Pfaff, Bernhard, 2008. "VAR, SVAR and SVEC Models: Implementation Within R Package vars," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 27(i04).
    6. Remer, Donald S. & Jorgens, Craig, 1978. "Ethylene economics and production forecasting in a changing environment," Engineering and Process Economics, Elsevier, vol. 3(4), pages 267-278, November.
    7. Detlef Vuuren & Elmar Kriegler & Brian O’Neill & Kristie Ebi & Keywan Riahi & Timothy Carter & Jae Edmonds & Stephane Hallegatte & Tom Kram & Ritu Mathur & Harald Winkler, 2014. "A new scenario framework for Climate Change Research: scenario matrix architecture," Climatic Change, Springer, vol. 122(3), pages 373-386, February.
    8. Brian O’Neill & Elmar Kriegler & Keywan Riahi & Kristie Ebi & Stephane Hallegatte & Timothy Carter & Ritu Mathur & Detlef Vuuren, 2014. "A new scenario framework for climate change research: the concept of shared socioeconomic pathways," Climatic Change, Springer, vol. 122(3), pages 387-400, February.
    9. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    10. Masih, Mansur & Algahtani, Ibrahim & De Mello, Lurion, 2010. "Price dynamics of crude oil and the regional ethylene markets," Energy Economics, Elsevier, vol. 32(6), pages 1435-1444, November.
    11. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    12. Kristie Ebi & Stephane Hallegatte & Tom Kram & Nigel Arnell & Timothy Carter & Jae Edmonds & Elmar Kriegler & Ritu Mathur & Brian O’Neill & Keywan Riahi & Harald Winkler & Detlef Vuuren & Timm Zwickel, 2014. "A new scenario framework for climate change research: background, process, and future directions," Climatic Change, Springer, vol. 122(3), pages 363-372, February.
    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. He, Li & Feng, Hushen & Luo, Pengfei & Luo, Yugeng & Xu, Yang, 2023. "Groundwater stress induced by shale resources development in the US: Evolution, response, and mitigation," Applied Energy, Elsevier, vol. 340(C).
    2. Wen-Hsien Tsai, 2019. "Modeling and Simulation of Carbon Emission-Related Issues," Energies, MDPI, vol. 12(13), pages 1-8, July.
    3. Soohyeon Kim & Surim Oh, 2020. "Impact of US Shale Gas on the Vertical and Horizontal Dynamics of Ethylene Price," Energies, MDPI, vol. 13(17), pages 1-12, August.
    4. Gillian Foster, 2019. "Low-Carbon Futures for Bioethylene in the United States," Energies, MDPI, vol. 12(10), pages 1-20, May.

    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. Pretis, Felix, 2021. "Exogeneity in climate econometrics," Energy Economics, Elsevier, vol. 96(C).
    2. Lamperti, Francesco & Bosetti, Valentina & Roventini, Andrea & Tavoni, Massimo & Treibich, Tania, 2021. "Three green financial policies to address climate risks," Journal of Financial Stability, Elsevier, vol. 54(C).
    3. Solberg, Birger & Moiseyev, Alex & Hansen, Jon Øvrum & Horn, Svein Jarle & Øverland, Margareth, 2021. "Wood for food: Economic impacts of sustainable use of forest biomass for salmon feed production in Norway," Forest Policy and Economics, Elsevier, vol. 122(C).
    4. Lanzi, Elisa & Dellink, Rob & Chateau, Jean, 2018. "The sectoral and regional economic consequences of outdoor air pollution to 2060," Energy Economics, Elsevier, vol. 71(C), pages 89-113.
    5. Speers, Ann E. & Besedin, Elena Y. & Palardy, James E. & Moore, Chris, 2016. "Impacts of climate change and ocean acidification on coral reef fisheries: An integrated ecological–economic model," Ecological Economics, Elsevier, vol. 128(C), pages 33-43.
    6. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    7. McManamay, Ryan A. & DeRolph, Christopher R. & Surendran-Nair, Sujithkumar & Allen-Dumas, Melissa, 2019. "Spatially explicit land-energy-water future scenarios for cities: Guiding infrastructure transitions for urban sustainability," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 880-900.
    8. Richard Taylor & Ruth Butterfield & Tiago Capela Lourenço & Adis Dzebo & Henrik Carlsen & Richard J. T. Klein, 2020. "Surveying perceptions and practices of high-end climate change," Climatic Change, Springer, vol. 161(1), pages 65-87, July.
    9. Roson, Roberto & Damania, Richard, 2016. "Simulating the Macroeconomic Impact of Future Water Scarcity an Assessment of Alternative Scenarios," Conference papers 332687, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Phetheet, Jirapat & Hill, Mary C. & Barron, Robert W. & Gray, Benjamin J. & Wu, Hongyu & Amanor-Boadu, Vincent & Heger, Wade & Kisekka, Isaya & Golden, Bill & Rossi, Matthew W., 2021. "Relating agriculture, energy, and water decisions to farm incomes and climate projections using two freeware programs, FEWCalc and DSSAT," Agricultural Systems, Elsevier, vol. 193(C).
    11. Milan Ščasný & Emanuele Massetti & Jan Melichar & Samuel Carrara, 2015. "Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 383-415, October.
    12. Coppens, Léo & Venmans, Frank, 2025. "The welfare properties of climate targets," Ecological Economics, Elsevier, vol. 228(C).
    13. Enrica De Cian & Ian Sue Wing, 2016. "Global Energy Demand in a Warming Climate," Working Papers 2016.16, Fondazione Eni Enrico Mattei.
    14. Tom Wilson & Irina Grossman & Monica Alexander & Phil Rees & Jeromey Temple, 2022. "Methods for Small Area Population Forecasts: State-of-the-Art and Research Needs," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 41(3), pages 865-898, June.
    15. Victor Nechifor & Matthew Winning, 2017. "The impacts of higher CO2 concentrations over global crop production and irrigation water requirements," EcoMod2017 10487, EcoMod.
    16. Dugan, Anna & Mayer, Jakob & Thaller, Annina & Bachner, Gabriel & Steininger, Karl W., 2022. "Developing policy packages for low-carbon passenger transport: A mixed methods analysis of trade-offs and synergies," Ecological Economics, Elsevier, vol. 193(C).
    17. Fabien Cremona & Sirje Vilbaste & Raoul-Marie Couture & Peeter Nõges & Tiina Nõges, 2017. "Is the future of large shallow lakes blue-green? Comparing the response of a catchment-lake model chain to climate predictions," Climatic Change, Springer, vol. 141(2), pages 347-361, March.
    18. Govorukha, Kristina & Mayer, Philip & Rübbelke, Dirk & Vögele, Stefan, 2020. "Economic disruptions in long-term energy scenarios – Implications for designing energy policy," Energy, Elsevier, vol. 212(C).
    19. Sferra, Fabio & Krapp, Mario & Roming, Niklas & Schaeffer, Michiel & Malik, Aman & Hare, Bill & Brecha, Robert, 2019. "Towards optimal 1.5° and 2 °C emission pathways for individual countries: A Finland case study," Energy Policy, Elsevier, vol. 133(C).
    20. Carl-Friedrich Schleussner & Joeri Rogelj & Michiel Schaeffer & Tabea Lissner & Rachel Licker & Erich M. Fischer & Reto Knutti & Anders Levermann & Katja Frieler & William Hare, 2016. "Science and policy characteristics of the Paris Agreement temperature goal," Nature Climate Change, Nature, vol. 6(9), pages 827-835, September.

    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:gam:jeners:v:11:y:2018:i:11:p:2967-:d:179665. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.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.