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Energy conservation: an alternative for investment in the oil sector for OPEC Member Countries

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  • Mehrzad Zamani

Abstract

Investment in the oil sector is the main policy of expanding net crude oil export capacity in OPEC Member Countries. The other alternative should be improving energy conservation policies. Since these countries benefit from cheap energy sources, it is reasonable to expect inefficient use of energy in their economies, resulting in relatively high energy intensity. This paper deals with the causality relationship between energy consumption and gross domestic product (GDP). First, stationary tests are run. Second, if there is a cointegrating relationship, an error correction model is applied; otherwise a standard Granger causality test is conducted. It was discovered that for all OPEC Member Countries we cannot statistically accept causality running from energy to GDP. Therefore, not only are proper conservation policies not a threat to economic growth, they also lead to an expansion of oil export capacity.

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  • Mehrzad Zamani, 2005. "Energy conservation: an alternative for investment in the oil sector for OPEC Member Countries," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 29(2), pages 107-114, June.
    • Handle: RePEc:bla:opecrv:v:29:y:2005:i:2:p:107-114
    DOI: 10.1111/j.0277-0180.2005.00146.x
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    1. Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 2002. "Energy consumption and economic growth: assessing the evidence from Greece," Energy Economics, Elsevier, vol. 24(4), pages 319-336, July.
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