Iranian Energy Economics

Abstract The Upstream Service Contracts in oil and gas industry of Iran have been used as an international contract for the exploration and development of Iran oil & gas fields, aiming to attract investment and establishing relationships with international oil companies (IOCs). These contracts explicitly or implicitly contain several statutory principles which are considered as a basic formation of the contracts. Such principles provide benefits for both national oil company (NOCs) and IOCs plus foreign Investors. Since those principles are considered to be mandatory rules prevailing on petroleum upstream contracts, thus, it would not be possible to derogate from such rules when negotiating and concluding these contracts. This parer is an attempt to investigate and find those principles and provided legal-economic analysis accordingly.

Abstract The main goal of this paper is to study the effect of social infrastructure on economic growth in a recourse-based economy. To this end, we introduce the quality of social infrastructure into an endogenous growth model. The set up allows us to see how the resource abundance can influence the quality of social infrastructure and hence economic growth. We use optimal control theory to solve the model.  The analytical solution shows that the impact of non-renewable resources on economic growth depends on the models' parameters. More specifically, we find out that if natural resource abundance leads to deterioration of social infrastructure, it might offset the positive impact of natural resources on economic growth and even might result in lower economic growth rate. We finally calibrate the model for Iran as an energy-rich economy. The calibration results indicate that in order to achieve 8 percent average growth rate, the quality of social infrastructure should improve by at least 4.3 percent.  Moreover, when we ignore the quality of social infrastructure, the optimum economic growth rate is found to be 6 percent. This shows that it is important to take into consideration the role of social infrastructure in estimating long run economic growth for Iran. The result of sensitivity analysis indicates that one percent improvement in the index of social infrastructure results in 0.42 percent increase in equilibrium growth rate in Iran. This finding has important policy implications for policymakers and social planners in Iran.

Abstract The main and effective buyers and sellers of crude oil in global market are OPEC and OECD organizations that they are trying to change the prices in their favor. This paper investigated a game theory model for the two organizations which how to behave against each other in oil market. To examine the factors and extent of influence of each mentioned organization on crude oil price offered an econometric model by using Johansen_ Juselius technique. Result shows that OPEC organization is effective on petroleum price with amount of crude oil supply and OECD organization is effective on it by harnessing oil reserves. The crude oil price is sensitivity to OPEC supply more than oil reserves is controlled by the OECD. So that OPEC organization can use it as a tool to increase bargaining power. Other variables can affect the crude oil price such as global economic growth and the effective real exchange rate America are analyzed in this paper.  The result is that global economic growth has direct effect on crude oil price and real dollar exchange rate has an adverse effect on it.

Abstract It is clear that any planning and policy making about economic growth as one of the macroeconomic purpose’s, need to special consideration to the environment and its relationship with production. therefore, in this study, we employ a maximum entropy Bootstrap to assessment the causality between carbon emissions and economic growth more accurate in comparison to conventional hypothesis tests based on asymptotic theory. We employ simulation based inference to investigate the causal relationship between carbon emissions and economic growth in Iran  for the 1973–2010 period, both in a bivariate and a multivariate framework by including energy consumption per capita, financial development and openness variables in the model. In bivariate model, Our results   indicate that there is uni-directional causality from GDP per capita to carbon emissions per capita while multivariate framework shows no evidence of a causal relation between carbon emissions and growth. Results indicate that there is uni-directional causality from GDP per capita to energy consumption per capita. So we can employ environmental policies without any reduction of economic growth.  

Abstract Following paper explores Iran & Turkmenistan's behavior in exporting natural gas to Europe. Taking this matter these two countries can be a potential of gas exporter to Europe. By using a framework of cooperative game theory, coalition among natural gas exporters and transmitters for the Nabucco Project has been explored. In this paper we answer the question whether the two countries should go to the coalition for exporting gas to Europe or not. Moreover, we calculate bargaining power of these two countries.  By having outcomes of following paper one can conclude that the both countries have profits to make the coalition for gas exporting among the Nabucoo project. Iran has more bargaining power than Turkmenistan so Iran can play important and active role to make a coalition to export gas to Europe among the Nabucco project.

Abstract With regard to the ever-increasing need for energy in current societies to satisfy various requirements, scientists and researchers from different countries, such as Iran, have a basic approach in their agenda to achieve renewable energies، The scientists believe that with regard to the limited fossil fuels and their environmental pollutions, renewable and clean energies can be the first alternative to generate energy، Our country, Iran, has numerous capabilities in the field of generating new and renewable energies، This fact emphasizes the need for an optimum model to develop the use of renewable energies، In line with this objective the costfunction is chosenas the objective function، Given the potential and limits ofrenewable energy (resources Limited), Consumptionof electricpowerin each of16regions (apply Limited) confidencelimits  of renewable energy (technical limitations), the model was designed and with use Robust optimization model was solved in LINGO software،The optimum of using renewable energies suggests the 36،71% generation of small hydropower energy, 18،22% wind energy, 17،19% biomass energy, 13،43% geothermal energy, 12،53% tidal energy, and 1% solar energy.
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Abstract The Economy Affected by Oil Price Shocks when that’s Similar Shocks Didn’t occurred in nearest recent period. In other hands, the relationship between oil price shocks and the Iran economy changed by economic structural changes.  For these reasons, present study has been investigate the effects of unforeseen oil price shocks on economic growth during the period 1367.1 -1389.4 using Markov switching model.  The Results show that the impact of positive unforeseen oil price shocks on economic growth are lesser and more durable than negative shocks. Also they unable to ensure the high economic growth but they lead to the state of middle economic growth. In return, although negative shocks are not able to keep the economy in a state of low economic growth, but they can be prevented the economy to achieve a status of high economic growth.