We examine the relationship between economic development and energy demand. The paper identifies the development patterns that characterize particular economic sectors, and analyzes the effect of sector-specific energy demand growth rates on the composition of final energy demand. We also examine some of the associated policy implications. Industrial energy demand increases most rapidly at the initial stages of development, but growth slows steadily throughout the industrialization process. Energy demand for transportation rises steadily, and takes the majority share of total energy use at the latter stages of development. Energy demand originating from the residential and commercial sector also increases to surpass industrial demand, but long term growth is not as pronounced as it is in the transport sector. These results have implications for the primary energy demand of an economy as it develops, and thus, for domestic energy security and global geopolitical relationships.

We investigate the relationship between the prices of natural gas and crude oil, and the factors that cause short run departures from the long run equilibrium price relationship. We find evidence that the link between natural gas and crude oil prices is indirect, acting through competition at the margin between natural gas and residual fuel oil. We also find that technology is critical to the long run relationship between fuel prices, and short run departures from long run equilibrium are influenced by product inventories, weather, other seasonal factors and supply shocks such as hurricanes.

National Oil Companies, Data envelopment, Stochastic frontier, L33, L71, D24, C14, C23,

No abstract

To the extent that energy sources can be substituted in end-uses, one might expect the prices of different fuels to be linked. High prices for one fuel will create incentives to substitute toward other fuels that are relatively less expensive. Consistent with this basic economic prediction, many authors have documented a tendency for the natural logarithm