IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v92y2020ics0140988320303248.html
   My bibliography  Save this article

Use of natural gas and oil as a source of feedstocks

Author

Listed:
  • Kapsalyamova, Zhanna
  • Paltsev, Sergey

Abstract

Greenhouse gas (GHG) implication of natural gas and oil differ when they are used for combustion or as a feedstock. In addition to the growing demand for feedstocks that are converted into products (such as plastics and fertilizers), climate policies that penalize GHG emissions may incentivize a switch from burning natural gas and oil to their feedstock use. Using an enhanced version of the MIT Economic Projection and Policy Analysis (EPPA) model, we examine several scenarios to assess natural gas and oil use as feedstock and find that global feedstock use grows 2–3 times by 2050 relative to 2015 levels. In a scenario consistent with reaching 2 °C goal set by the Paris Agreement, the share of natural gas used as a feedstock grows from about 5% in 2015 to about 15% in 2050 and the share of oil used as a feedstock grows from about 10% in 2015 to about 17% in 2050. In this scenario, the share of natural gas used as a feedstock in 2050 is 86% larger than in the no-policy Reference. The corresponding increase in a share of oil used as a feedstock is 40%. USA, Europe, and the Middle East remain as the major regions for feedstock use, but China, India, and Africa grow fast to become major feedstock use centers.

Suggested Citation

  • Kapsalyamova, Zhanna & Paltsev, Sergey, 2020. "Use of natural gas and oil as a source of feedstocks," Energy Economics, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:eneeco:v:92:y:2020:i:c:s0140988320303248
    DOI: 10.1016/j.eneco.2020.104984
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988320303248
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2020.104984?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhou, Huairong & Qian, Yu & Yang, Siyu, 2015. "Energetic/economic penalty of CO2 emissions and application to coal-to-olefins projects in China," Applied Energy, Elsevier, vol. 156(C), pages 344-353.
    2. Chiappini, Raphaël & Jégourel, Yves & Raymond, Paul, 2019. "Towards a worldwide integrated market? New evidence on the dynamics of U.S., European and Asian natural gas prices," Energy Economics, Elsevier, vol. 81(C), pages 545-565.
    3. Ren, Tao & Patel, Martin & Blok, Kornelis, 2006. "Olefins from conventional and heavy feedstocks: Energy use in steam cracking and alternative processes," Energy, Elsevier, vol. 31(4), pages 425-451.
    4. Morris, Jennifer F. & Reilly, John M. & Chen, Y.-H. Henry, 2019. "Advanced technologies in energy-economy models for climate change assessment," Energy Economics, Elsevier, vol. 80(C), pages 476-490.
    5. Xiang, Dong & Qian, Yu & Man, Yi & Yang, Siyu, 2014. "Techno-economic analysis of the coal-to-olefins process in comparison with the oil-to-olefins process," Applied Energy, Elsevier, vol. 113(C), pages 639-647.
    6. Sergey Paltsev, 2020. "Projecting Energy and Climate for the 21st Century," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1), pages 43-62.
    7. Chen, Y.-H. Henry & Paltsev, Sergey & Reilly, John M. & Morris, Jennifer F. & Babiker, Mustafa H., 2016. "Long-term economic modeling for climate change assessment," Economic Modelling, Elsevier, vol. 52(PB), pages 867-883.
    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. Wei, Zhaohao & Chai, Jian & Dong, Jichang & Lu, Quanying, 2022. "Understanding the linkage-dependence structure between oil and gas markets: A new perspective," Energy, Elsevier, vol. 257(C).
    2. Paltsev, Sergey & Gurgel, Angelo & Morris, Jennifer & Chen, Henry & Dey, Subhrajit & Marwah, Sumita, 2022. "Economic analysis of the hard-to-abate sectors in India," Energy Economics, Elsevier, vol. 112(C).
    3. Y.-H. Henry Chen & Erik Ens & Olivier Gervais & Hossein Hosseini & Craig Johnston & Serdar Kabaca & Miguel Molico & Sergey Paltsev & Alex Proulx & Argyn Toktamyssov, 2022. "Transition Scenarios for Analyzing Climate-Related Financial Risk," Discussion Papers 2022-1, Bank of Canada.
    4. Paltsev, Sergey & Morris, Jennifer & Kheshgi, Haroon & Herzog, Howard, 2021. "Hard-to-Abate Sectors: The role of industrial carbon capture and storage (CCS) in emission mitigation," Applied Energy, Elsevier, vol. 300(C).
    5. Jennifer Morris & David Hone & Martin Haigh & Andrei Sokolov & Sergey Paltsev, 2023. "Future energy: in search of a scenario reflecting current and future pressures and trends," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(1), pages 31-61, January.

    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. Winchester, Niven & White, Dominic, 2022. "The Climate PoLicy ANalysis (C-PLAN) Model, Version 1.0," Energy Economics, Elsevier, vol. 108(C).
    2. Dongliang, Wang & Wenliang, Meng & Huairong, Zhou & Guixian, Li & Yong, Yang & Hongwei, Li, 2021. "Green hydrogen coupling with CO2 utilization of coal-to-methanol for high methanol productivity and low CO2 emission," Energy, Elsevier, vol. 231(C).
    3. Xiang, Yangyang & Zhou, Jingsong & Lin, Bowen & Xue, Xiaoao & Tian, Xingtao & Luo, Zhongyang, 2015. "Exergetic evaluation of renewable light olefins production from biomass via synthetic methanol," Applied Energy, Elsevier, vol. 157(C), pages 499-507.
    4. Ye, Liping & Xie, Fei & Hong, Jinglan & Yang, Donglu & Ma, Xiaotian & Li, Xiangzhi, 2018. "Environmental burden mitigation potential of oil field gas-assisted coal-to-olefin production," Energy, Elsevier, vol. 157(C), pages 1015-1024.
    5. Gurgel, Angelo & Mignone, Bryan K. & Morris, Jennifer & Kheshgi, Haroon & Mowers, Matthew & Steinberg, Daniel & Herzog, Howard & Paltsev, Sergey, 2023. "Variable renewable energy deployment in low-emission scenarios: The role of technology cost and value," Applied Energy, Elsevier, vol. 344(C).
    6. Jiang, Peng & Parvez, Ashak Mahmud & Meng, Yang & Xu, Meng-xia & Shui, Tian-chi & Sun, Cheng-gong & Wu, Tao, 2019. "Exergetic, economic and carbon emission studies of bio-olefin production via indirect steam gasification process," Energy, Elsevier, vol. 187(C).
    7. Winchester, Niven & Reilly, John M., 2020. "The economic and emissions benefits of engineered wood products in a low-carbon future," Energy Economics, Elsevier, vol. 85(C).
    8. Xiang, Dong & Xiang, Junjie & Sun, Zhe & Cao, Yan, 2017. "The integrated coke-oven gas and pulverized coke gasification for methanol production with highly efficient hydrogen utilization," Energy, Elsevier, vol. 140(P1), pages 78-91.
    9. Jiao, Shouhui & Wang, Feng & Wang, Lili & Biney, Bernard Wiafe & Liu, He & Chen, Kun & Guo, Aijun & Sun, Lanyi & Wang, Zongxian, 2022. "Systematic identification and distribution analysis of olefins in FCC slurry oil," Energy, Elsevier, vol. 239(PA).
    10. Xiaoye Jin & Meiying Li & Fansheng Meng, 2019. "Comprehensive Evaluation of the New Energy Power Generation Development at the Regional Level: An Empirical Analysis from China," Energies, MDPI, vol. 12(23), pages 1-15, December.
    11. Otto, Christian & Willner, Sven Norman & Wenz, Leonie & Frieler, Katja & Levermann, Anders, 2017. "Modeling loss-propagation in the global supply network: The dynamic agent-based model acclimate," OSF Preprints 7yyhd, Center for Open Science.
    12. Paltsev, Sergey & Morris, Jennifer & Kheshgi, Haroon & Herzog, Howard, 2021. "Hard-to-Abate Sectors: The role of industrial carbon capture and storage (CCS) in emission mitigation," Applied Energy, Elsevier, vol. 300(C).
    13. Halser, Christoph & Paraschiv, Florentina & Russo, Marianna, 2023. "Oil–gas price relationships on three continents: Disruptions and equilibria," Journal of Commodity Markets, Elsevier, vol. 31(C).
    14. Nabernegg, Stefan & Bednar-Friedl, Birgit & Muñoz, Pablo & Titz, Michaela & Vogel, Johanna, 2019. "National Policies for Global Emission Reductions: Effectiveness of Carbon Emission Reductions in International Supply Chains," Ecological Economics, Elsevier, vol. 158(C), pages 146-157.
    15. Sai Chen & Ran Luo & Zhi-Jian Zhao & Chunlei Pei & Yiyi Xu & Zhenpu Lu & Chengjie Zhao & Hongbo Song & Jinlong Gong, 2023. "Concerted oxygen diffusion across heterogeneous oxide interfaces for intensified propane dehydrogenation," Nature Communications, Nature, vol. 14(1), pages 1-11, December.
    16. Chen, Y.-H. Henry & Paltsev, Sergey & Gurgel, Angelo & Reilly, John & Morris, Jennifer, 2022. "The MIT EPPA7: A Multisectoral Dynamic Model for Climate Policy Analysis," Conference papers 333493, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Schwob, Marcelo Rousseau Valença & Henriques Jr., Maurício & Szklo, Alexandre, 2009. "Technical potential for developing natural gas use in the Brazilian red ceramic industry," Applied Energy, Elsevier, vol. 86(9), pages 1524-1531, September.
    18. Makarov, Igor & Chen, Y.-H. Henry & Paltsev, Sergey, 2018. "Finding itself in the post-Paris world: Russia in the new global energy landscape," Conference papers 332984, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    19. Haribal, Vasudev Pralhad & Neal, Luke M. & Li, Fanxing, 2017. "Oxidative dehydrogenation of ethane under a cyclic redox scheme – Process simulations and analysis," Energy, Elsevier, vol. 119(C), pages 1024-1035.
    20. Rahmad Syah & Afshin Davarpanah & Marischa Elveny & Amir Ghasemi & Dadan Ramdan, 2021. "The Economic Evaluation of Methanol and Propylene Production from Natural Gas at Petrochemical Industries in Iran," Sustainability, MDPI, vol. 13(17), pages 1-23, September.

    More about this item

    Keywords

    Feedstock; Natural gas; Oil; Economy-wide modeling;
    All these keywords.

    JEL classification:

    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

    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:eee:eneeco:v:92:y:2020:i:c:s0140988320303248. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    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.