Energy Journal – Nov 2020

The latest Energy Journal from the International Association of Energy Economics has landed on my doormat with a loud thud. The latest issue is 312 pages long.

In Volume 41, Number 6, I was struck by the paper Are Energy Executives Rewarded For Luck? by Lucas Davis and Catherine Hausman, which looks at executive compensation data from 78 major US oil and gas companies over nearly a quarter of a century. The short answer seems to be “yes” : the paper finds that executive compensation rises with increasing oil prices more than it falls with decreasing oil prices. The paper concludes with a discussion of different executive compensation mechanisms that could be adopted, drawn from the wider literature.

The other paper that grabbed my attention was that on Locational Investment Signals by Anselm Eicke, Tarun Khanna and Lion Hirth. The paper looks at the locational factors affecting investment in power systems. The scope is wide, with analyses from Australia, Chile, France, Germany, India, Mexico, Norway, Sweden, UK and the USA. I haven’t read this piece in depth yet, but I feel that locational factors are underestimated in the literature, so i am looking forward to reviewing this in more detail.

There is plenty of other good material in the latest issue. Yes, I do still get it by post, but that’s the way I like to read things. For those who want the latest edition online, you can click on the link below (only available for IAEE members).

Platts issues Dated Brent Special Report

The Price Reporting Agency Platts, part of S&P Global, has recently issued a Special Report on the Dated Brent benchmark. The price of Brent crude oil from the North Sea has been used for the last 30-odd years as the pricing reference point for billions of barrels of oil – some estimates suggest that as much as two-thirds of the 95 million barrels per day of crude oil produced and traded globally is directly or indirectly linked to Brent price. The catch? Over the last decade, Brent production has declined to the point that Platts has had to use the price of other grades such as Forties, Oseberg, and more recently Ekofisk and Troll, in its calculation of the Brent price.
The Platts report: “Riding the Wave: The Dated Brent benchmark at 30 years old and beyond” can be downloaded at the link below: