Strategic Oil Reserves Research Articles

Экономическая конъюнктура Арктики на китайском энергетическом рынке

Over the past decade, the Chinese economy has grown at a faster pace (up to 8 % per year), which is a consequence of the unprecedented expansion of China in world markets. Such a competitive position presupposes the same significant (up to 15 %) growth in energy consumption, which is ensured by both an increase in domestic production (to a lesser extent) and imports of energy resources — oil, pipeline and liquefied natural gas and coal. In the context of aggravated competition between the leading economies of the world (China and the United States), the security of transporting energy resources from the Persian Gulf and other regions through the narrows of the Strait of Hormuz and Malacca, as well as through the regions of the South China Sea and the Taiwan Strait controlled by the United States, acquires a new sound for China. To solve this problem, China is building up its naval presence in the direction of the Southern Silk Road, but mainly in the waters of the Pacific Ocean seas — the Yellow, East China and South China, that is, in the operational zones of the three fleets of the Chinese Navy — the North, East and South, from the exits to the operational zone of the Russian Pacific Fleet in the waters of the Sea of Japan and the Sea of Okhotsk. Demonstration of strength and flag during joint sailing of the two fleets is carried out within the framework of the exercises of the “Maritime Interaction” format from 2012 to 2021 inclusive, except for 2020 due to the aggravation of the epidemiological situation in connection with COVID-19. The latent goal of these exercises is to practice coastal defense missions in the zone where China's strategic oil reserve is located.

Development trend of protection technology for oil storage tank

Petroleum is the lifeline of the national economy and an important strategic resource for the survival and development of the country. Nowadays, the main way of storage of raw materials and products in the petroleum and petrochemical industry is tank storage, so the operation, maintenance and anti-corrosion of storage tanks play a vital role in the industrial safety of the entire industry. This paper summarizes the development of tank anti-corrosion technology in petrochemical industry at present, discusses the mechanism of tank inside and outside corrosion, various anti-corrosion measures, highlights the importance of tank anti-corrosion protection, and looks forward to the future development of tank anti-corrosion technology. Petroleum is the blood of modern industry and serves the national energy security. The anti-corrosion measures of storage tanks are of great significance to the key deployment of strategic oil reserves in China.

Международный опыт формирования и управления стратегическими запасами нефти в условиях рыночной экономики

Международный опыт формирования и управления стратегическими запасами нефти в условиях рыночной экономики

Do global oil price shocks affect Indian metal market?

The main objective of this paper is to investigate the spillover effect of global crude oil prices on Indian metal market using dynamic conditional correlation generalized autoregressive conditional heteroskedasticity models. The study considers Indian metal market, Multi Commodity Exchange of India Limited METAL index and two precious metals gold and silver, and three industrial metals aluminium, copper and zinc over the period from 1 June 2006 to 31 March 2017. The results of the study show moderate co-movement between West Texas Intermediate (WTI) crude oil and Indian metal market. Precious metals gold and silver do not show either upward nor downward trend even in global financial crisis 2008–2009 while industrial metals aluminium, copper and zinc are weakly correlated to crude oil prices. In addition, it is found that global crude oil prices have short-term as well as long-term memory effect on Indian metal market and metal prices. The study presents the case for diverse stakeholders to improve strategic oil reserves for stabilizing oil prices during global turmoil. Also, policy makers and practitioners may draw meaningful conclusions from findings of the present study to improve future market for stabilizing spot prices of metals while operating in Indian metal markets.

Implicit numerical integration and consistent linearization of inelastic constitutive models of rock salt

The mechanical behavior of rock salt formations is not only of interest due to mining of salt but also because of its increasing relevance for geotechnical applications, e.g., for the storage of strategic oil and gas reserves, for hosting nuclear waste repositories, for compressed air energy storage (CAES) or the cavern storage of hydrogen. The safety assessment of geotechnical installations as well as long-term convergence predictions of salt caverns require models capturing the inelastic behavior of rock salt under thermomechanical loading. Many models have been derived for uniaxial or triaxial experimental setups and some are inadequately presented to fully describe three-dimensional scenarios. Here, a tensorial representation is chosen to avoid such inconsistencies and their possible consequences on commonly used material parameters are discussed. Two very commonly used material models, the LUBBY2 and Minkley formulations, have been primarily implemented into software relying on explicit time integration schemes. Here, their implicit implementation with analytical Jacobians into a scientific open-source finite element framework is described in detail. The implementations are verified by comparison to suitable analytical solutions for coupled thermomechanical loadings and their convergence behavior is analyzed.

Crude oil price volatility spillovers into major equity markets

This paper investigates the daily volatility spillovers between crude oil prices and equity indexes in several developed markets. We find that the price and index series exhibit nonlinear dependencies that are inconsistent with chaotic structure. Bivariate vector autoregressive general autoregressive conditional heteroscedasticity (VARGARCH) estimations indicate bidirectional volatility spillovers. Finding evidence of asymmetric market responses to negative and positive shocks, we also estimate asymmetric bivariate VAR-exponential GARCH (VAR-EGARCH) models. We find shock transmissions to be asymmetric, whereby positive and negative shocks of the same size on oil prices have unequal impacts on the volatility of equities. Specifically, volatility responses and spillovers are more severe following negative news and shocks in each market. We further establish that there are causalities and feedback between crude oil prices and equity indexes in major developed economies. Considering the deleterious income and wealth effects of negative shocks to oil prices on the economies under study, our findings are in contrast to the notion that some economies are better able to weather negative shocks to the crude oil markets because of their increased efficiency or flexibility. Furthermore, maintaining adequate strategic crude oil reserves in the United States and other major economies is paramount in coping with shocks to crude oil supplies and price volatility.

Is There an Optimal Strategic Oil Reserve for Each Country? A Study Based on the Game Theory

In generally, there is a phenomenon of “free rider” in the establishment of national oil reserves for different countries, which means that they have the tendency of underestimating the strategic oil reserves. This paper attempts to explain this phenomenon from the perspective of non-cooperative game theory. It also analyzes the establishment of strategic oil reserve among different countries based on the coalition game theory and presents the core solution for it. The results show that based on a certain constraint mechanism, it is feasible for different countries to establish their own suitable strategic oil reserves in theory and practice.

中国能源安全的海外风险及对策 / Overseas Risks to China’s Energy Security and Potential Countermeasures

张 弛 【摘要】本文探讨中国能源安全的海外风险并提出对策建议。中国能源安全的主要矛盾是供应安全，关键在于以可承受的价格获得充足的能源供应，可进一步分解为两个要素：一是以合适的价格购买到能源；二是充足、不间断的能源进口。相应地，中国能源安全的海外风险突出表现在国际油价攀升和进口运输安全两方面。在维护能源安全的对策上，现实主义和新自由主义的能源安全观各有长处和不足，应立足中国国情进行扬弃，具体要做好三方面工作，即能源外交、军力发展和战略石油储备。 This article discusses the overseas risks to China’s energy security and provides suggestions for how to safeguard China’s energy security. The key to China’s energy security is supply security. This means obtaining enough and continued energy supply at affordable prices which can be divided into two factors: one is purchasing energy at reasonable prices; the other is having uninterrupted energy import. Accordingly, the major overseas challenges to China’s energy security are the surging international oil prices and the problem of safeguarding energy imports. There are both merits and shortcomings to the energy security concept of realism and that of neo-liberalism. Suggestions for how to secure China’s energy supply should be based on China’s conditions as well as a critique of the two theoretical perspectives and should include three aspects: energy diplomacy, military development and strategic oil reserves.

Experience and challenge of underground oil/gas storage caverns in Korea

This paper reviews the current status of underground hydrocarbon storage in Korea and addresses technical aspects of the underground storage in rock caverns. Currently, Korea has a storage capacity equal to about 146 million barrels, and approximately 73% of the total, 106 million barrels, are stored in underground space. The key technologies in the underground storage of hydrocarbon products are the construction of the large rock cavern with a cross-sectional area ranging from 300 to 520 m2, the long-term structural stability of the cavern and the full containment of the product in rock caverns. Based on a 38-year experience in design, construction and operation of underground storage facilities, Korea has accumulated technical expertise in this field and achieved the position as one of the model countries holding stockpiles of strategic oil reserves. Also an innovative method of liquefied natural gas (LNG) storage in lined rock caverns has been developed to provide a safe and cost-effective solution. It consists of protecting the host rock against the extremely low temperature and providing a liquid and gas tight liner. From the construction and operation of Daejeon pilot plant, technical feasibility of the underground LNG storage system can be well proved.

Study on the Cause of Oil Tank Fire and Fire Prevention Countermeasure

Oil is a kind of important chemical raw materials, countries have put oil as an important sources of energy and actively expanded its strategic oil reserve along with our country energy strategy adjustment. The number of oil storage increases constantly, the tank farm scale expands unceasingly and fire accident of oil storage tank rises constantly. So it is an important measure for preventing the oil tank fire to analyze reason of oil tank fire and adopt corresponding fire prevention countermeasures.

A study on national strategic oil reserve based on the game theory

A study on national strategic oil reserve based on the game theory

A Decade of the National Committee on American Foreign Policy∗

A Decade of the National Committee on American Foreign Policy∗

Energy consumption and economic growth: Evidence from China at both aggregated and disaggregated levels

Using a neo-classical aggregate production model where capital, labor and energy are treated as separate inputs, this paper tests for the existence and direction of causality between output growth and energy use in China at both aggregated total energy and disaggregated levels as coal, oil and electricity consumption. Using the Johansen cointegration technique, the empirical findings indicate that there exists long-run cointegration among output, labor, capital and energy use in China at both aggregated and all three disaggregated levels. Then using a VEC specification, the short-run dynamics of the interested variables are tested, indicating that there exists Granger causality running from electricity and oil consumption to GDP, but does not exist Granger causality running from coal and total energy consumption to GDP. On the other hand, short-run Granger causality exists from GDP to total energy, coal and oil consumption, but does not exist from GDP to electricity consumption. We thus propose policy suggestions to solve the energy and sustainable development dilemma in China as: enhancing energy supply security and guaranteeing energy supply, especially in the short run to provide adequate electric power supply and set up national strategic oil reserve; enhancing energy efficiency to save energy; diversifying energy sources, energetically exploiting renewable energy and drawing out corresponding policies and measures; and finally in the long run, transforming development pattern and cut reliance on resource- and energy-dependent industries.

Comments: China's Strategy

News that China is negotiating directly with OPEC for future oil supplies underscores how big a concern security of supply has become for the globe's fastest-growing energy user. Economic growth has been at about a 10% clip since 2004, and the country's surging energy appetite—one of the main causes of the steep rise in oil prices over the past 3 years—shows little sign of slowing. China's oil consumption should increase almost a half a million BOPD in 2006, according to a U.S. Dept. of Energy forecast. China is now the world's third-largest net importer of oil, behind only Japan and the U.S. Since becoming an oil importer in 1993, the gap between domestic supply and demand has widened sharply. China, with about 18 billion bbl of reserves, currently produces 3.8 million BOPD and consumes 7.4 million BOPD. Oil demand has risen roughly 7% per year since 1993. The negotiations with OPEC are but the latest step China has taken to trans-form its energy picture. The country has established a strategic oil reserve, similar to the one the U.S. has in place, and has been courting Latin American suppliers aggressively. It also has shaken up its energy company structure. China Natl. Petroleum Corp., China Petroleum and Chemical Corp. (often referred to as Sinopec) handle most of the state's energy assets. Another firm, China Natl. Offshore Oil Corp., takes care of offshore E&P, currently only about 15% of total domestic production. All three firms were partially privatized, though the government continues to control a majority stake in each. The key strategy appears to be improved use of technology to stabilize mature assets and develop new ones, explore new areas, and lock up sources of supply abroad. At last month's International Oil & Gas Conference and Exhibition in Beijing, co-organized by SPE and the Chinese Petroleum Soc., executives for the major Chinese oil and gas firms spoke of their plans for increasing output not only domestically, but abroad. As with other national oil companies (NOCs), Chinese firms have become more nimble and are searching for ways to secure oil supplies from places such as west Africa, the Middle East, and Asia. That is changing the energy landscape, not only for NOCs but for international oil companies (IOCs), as IHS' Pete Stark points out in this month's Guest Editorial. Major oil producers, some of them familiar exporters to North America, are beginning to see that their future may lie east. Angola is now China's largest supplier of oil, although its decision to join OPEC this year could have implications for both China and IOCs. That move will bring more of the world's production under OPEC's influence and thus subject it to potential production cutbacks to prop up prices. That would likely affect the numerous partnership ventures Angola has with private firms such as ExxonMobil, BP, and Total. In fact, Angolan production of just under 2 million BOPD is dominated by output from IOCs—almost 80%. With China's dependence on oil imports forecast to grow to 70% by 2020, it may find itself in the same position as the U.S.: increasingly dependent on oil supplies from OPEC, as well as sometimes unstable regimes, and often subject to trends in international geopolitics. But the steps it is taking—searching for new sources of supply outside of the country, creating reserve stockpiles at home, improving technology applications to stabilize and enhance domestic production, and planning more offshore development—will be key to its continued energy and economic growth.

An Overview of the International and Regional Situation

Though India, China and Russia are not seeking to create an alliance, the very fact that these three large neighbouring countries, each a major global actor in its own right, sit together to share views, is a significant contribution to making international relations more just and democratic. The recent improvement in India-China relations has further strengthened the triangle. All three countries are well placed to play greater roles in a world where the importance of ‘knowledge power’ is rising. The US continues to be the sole super power and all three countries must have good relations with it. But, hopefully, the experience in Iraq will make it more respectful of the world's public opinion. All of us—including the majority of Muslims—have to work together not only to isolate the extremists but also to address the legitimate grievances that are exploited by them to gain more adherents. The three countries need to cooperate in the reform of the UN system. India-Pakistan relations continue to improve. But the path ahead is still full of difficult obstacles. There are also disturbing reports about the linkage between certain elements in Pakistan and Bangladesh promoting Islamic extremism in the region. Central Asia is an important neighbouring region of our three countries, because of its strategic location and vast oil and gas reserves. Unfortunately, religious extremism, bad governance and external interference are threatening to produce an explosive mixture.

China’s Strategic Oil Reserves and the Establishment of the Oil Spill Contingency System

China will soon initiate its strategic oil reserves programme. This programme will be of great significance, politically and economically, in offsetting the risks of the world oil market and in guaranteeing the speedy development of China's economy. In the implementation phase of the programme however, large amounts of oil will have to be imported by sea. While promoting prosperity of the domestic marine transportation sector, this will certainly enhance the risk of environmental pollution in coastal waters. This paper analyses the relationship between strategic reserves, transportation of oil, and the environment of China's coastal waters. In view of the existing problems in the contingency management of China's marine transportation, the paper brings forward ideas and approaches towards building up and improving China's contingency system for marine transport oil spillages. The paper proposes an organisational structure; a coordination and control mechanism; and concrete preventive measures against oil spillage. It draws upon experiences from other countries, while taking into account China's existing marine management system.

Experimental determination of the relationship between permeability and microfracture-induced damage in bedded salt

The mechanical behavior of rock salt formations is not only of interest due to mining of salt but also because of its increasing relevance for geotechnical applications, e.g., for the storage of strategic oil and gas reserves, for hosting nuclear waste repositories, for compressed air energy storage (CAES) or the cavern storage of hydrogen. The safety assessment of geotechnical installations as well as long-term convergence predictions of salt caverns require models capturing the inelastic behavior of rock salt under thermomechanical loading. Many models have been derived for uniaxial or triaxial experimental setups and some are inadequately presented to fully describe three-dimensional scenarios. Here, a tensorial representation is chosen to avoid such inconsistencies and their possible consequences on commonly used material parameters are discussed. Two very commonly used material models, the LUBBY2 and Minkley formulations, have been primarily implemented into software relying on explicit time integration schemes. Here, their implicit implementation with analytical Jacobians into a scientific open-source finite element framework is described in detail. The implementations are verified by comparison to suitable analytical solutions for coupled thermomechanical loadings and their convergence behavior is analyzed.

A Stochastic Dynamic Nash Game Analysis of Policies for Managing the Strategic Petroleum Reserves of Consuming Nations

In this paper we present a Nash dynamic game model of interactions among oil inventory and tariff policies for oil importing countries. The inventory policies consist of the rates for building up and drawing down strategic oil reserves, while the tariff policies consist of setting tariffs as a function of the state of the world oil market. The model represents a stochastic game in which countries are grouped into two players, where each player in the game chooses its individual policies to maximize expected social welfare. We use the model to present empirical results about the sizes of the stockpiles as a function of disruption probabilities, tariff policies and cooperation versus noncooperation between nations. In addition to results regarding the build-up and draw down rates as a function of the amount of disruption or probability of future disruption our central conclusion is that build-up and drawdown policies are essentially the same with or without international cooperation, due to the current inventory limits on U.S. and Foreign Strategic Petroleum Reserves.

Short-Term Contracting and Strategic Oil Reserves

The effect of short-term contracting on resource extraction is studied, in a two-country model of international trade in oil. Countries' planners are assumed to be fully rational, with perfect information and perfect foresight. Contracts are assumed perfectly enforceable and complete, except that short-term contracts do not allow commitments to actions taken beyond the contract period. We show that short-term contracting limits countries' opportunities for intertemporal consumption-smoothing, reducing their collective tolerance for temporal variation in consumption. This tends to make them extract more slowly than in the efficient plan that results from long-term contracting. Contractual relationships often outlive the contracts that govern them. It is therefore common for a long-term relationship to be governed by a sequence of short-term contracts. When these contracts allow complete control of the organization of the relationship within each contract period, any outcome that can be achieved in a long-term contract, covering the entire life of the relationship, is also feasible with a sequence of short-term contracts. Short-term contracting can nevertheless have significant effects on resource allocation, because each contract must be voluntarily negotiated in the environment created by its predecessors. An allocation that is acceptable to both parties as a long-term contract might not be voluntarily negotiable as a sequence of short-term contracts. Because short-term contracting is so prevalent, it is worth asking what sorts of relationship can be organized efficiently only by long-term contract, and what kinds of distortion are caused by short-term contracting.' Two kinds of answers to these questions have been given in the literature. One important line of investigation considers the use of memory in contracts designed to control parties' incentives under asymmetric information. Baron and Besanko (1985), Rubinstein and Yaari (1983), Sanchez and Zapater (1985), Stiglitz and Weiss (1983), Tirole (1986), and Townsend (1982), among others, have shown how parties can use

Another Major Delay for Strategic Oil Reserve

Another Major Delay for Strategic Oil Reserve