Upstream Sector Research Articles

Preface

Welcome to the sbe22 Berlin D-A-CH conferenceThe sbe22 Berlin D-A-CH conference, which will take place under the theme “Built Environment Within Planetary Boundaries”, will provide a platform for the exchange of ideas on innovative design and planning methods, building products, futureproof buildings and infrastructures as well as sustainable neighborhood and urban development. It is primarily aimed at participants from Austria, Switzerland and Germany, as well as from other European countries, and includes representatives from countries of the global south. Participants will be introduced to options for the further development of methodological principles, design, planning and evaluation tools, as well as concrete solutions and examples from the fields of products, buildings and urban planning. The scientific sessions and several special events invite representatives from science, politics and industry to an in-depth exchange of experiences.Europe has formulated ambitious goals for its sustainable development over the next decades and plans corresponding measures. Many of them directly and indirectly affect the construction and real estate sector, as well as the closely related energy supply. Buildings and infrastructures provide prerequisites for social and economic development and have a major impact on the quality of life of their occupants and neighborhood. However, they are also associated with undesirable energy and material flows, as well as effects on the global and local environment, which to prevent further harm, have to be minimized. Climate protection, resource conservation and health protection measures have to be designed in such a way that issues of economic efficiency, value stability and affordability are taken into account. At the same time, buildings and infrastructures are already affected by the local consequences of global climate change and must be adapted to them. It will be necessary to achieve this by assessment of the respective sites and planning with prevision of the developments of the next twenty years. The fact that the construction and real estate sector causes considerable energy and material flows, as well as environmental impacts, also points to the necessity of looking for potential for savings and reduction. The success of sustainable development thus also depends on the players in the construction and real estate industry, including upstream and downstream sectors. The construction and real estate sector is thus both a cause and a victim of the previous code of conduct of resource management of real estate industry and building sector, as well as a field of action for solutions to change it.

Foreign firm characteristics, labour market restrictions and FDI spillovers: Evidence from Moldova

AbstractThis paper investigates how productivity spillovers from foreign to domestic firms are affected by foreign firm characteristics and labour market conditions in Moldova. We use firm‐level administrative panel data and annual survey region‐sector indicators of labour market conditions in 2005–2014. Baseline regressions show that domestic firms benefit from backward FDI spillovers, while we find no evidence of horizontal or forward spillovers. Spillover effects are heterogeneous and depend on the ownership structure and age of foreign firms. Domestic firms in upstream sectors benefit from both wholly foreign‐owned companies (WFOC) and joint ventures (JV). However, JVs need less time in the market for positive spillovers to materialise, while WFOCs only lead to larger spillover effects when they are older. In regions and sectors where firms experience fewer labour market restrictions, backward FDI spillovers are larger. Interacting foreign firm characteristics with labour market restrictions, we find that spillovers through the labour market channel materialise only for older FDI, regardless of ownership type. The results are in line with our expectation that WFOCs need more time than JVs to develop linkages with local suppliers and lead to spillovers through this channel. Moreover, in developing countries labour market restrictions reduce labour mobility and consequently, the size of FDI spillovers across industries.

CORPORATE SOCIAL RESPONSIBILITY BY FOREIGN DIRECT INVESTMENT IN BLOCK PASE UPSTREAM OIL AND GAS SECTOR, EAST ACEH REGENCY, INDONESIA

This article explains the regulation of CSR and what factors support and hinder the implementation of CSR in foreign direct investment in the upstream oil and gas sector in the Pase Block, East Aceh. The result shows that the implementation of CSR in the Pase Block was not in accordance with Law on Governing Aceh number. 11/ 2006, Qanun Aceh No. 5/2018 on investment, Qanun Aceh Timur Number 12/ 2016 on CSR, Government Regulaiton number 65/ 2016 on the guideline for CSR and ISO 26000, as well as Production Sharing Contract between parties. The company has not implemented CSR in accordance with the laws and regulations due to the lack of commitment of TPI to implement CSR. As a result, the CSR has not positively impacted the economic growth of the community and the environment around the company.

Analysis on the sustainability of different low CO2 emission Hydrogen production technologies for transition towards a ‘zero emission’ economy

Abstract World primary energy consumption reached 14,2 mil. tons of oil equivalent. More than 81.7% of this energy was generated from fossil fuels as primary energy source while 74.5% of the electrical energy was generated from fossil fuels. Energy transition towards zero impact from CO2 emission requires a major shift in the energy mix of the primary sources, decarbonization of the electricity generation, and the use of Hydrogen as the alternative low CO2 emission solution for the high temperature industrial process. Low CO2 Hydrogen could be produced using the conventional technologies (steam methane reform i.e.) with Carbon Capture and Storage, from renewable energy sources through water electrolysis or from biogas / biomass. At this moment none of the low CO2 Hydrogen technologies is competitive, as natural gas-based Hydrogen is around 1.5 EUR/kg while renewable based Hydrogen is in the range of 2.5-5.5 EUR/kg. From the sustainability point of view, besides the production cost issue, the whole life cycle emissions need to be considered. The main goal of this article is to assess different low CO2 emission Hydrogen production technologies by analyzing the CO2 emission along the value chain, together with a sensitive analysis on the main cost drivers, evaluating the impact on upstream and downstream economic sectors, based on case study methodology. This article provides the basis for selecting the most sustainable technology, the prerequisites for an energy transition towards a hydrogen-based economy and highlights the critical links between a Low CO2 Hydrogen transition strategy and other energy strategies. The results suggest that access to low-cost renewable electricity will be the most important factor in driving the production cost down, a decentralized onsite production will further reduce the losses and wind based renewable energy is having the lowest CO2 emission across the entire life cycle.

Decoupling degrees of China's economic growth from three-perspective carbon emissions

Responsible for 28% of global carbon emissions (since 2012), China's actions to carbon emission mitigation are critical to achieving the net-zero ambition globally. Since aggressive actions on emission mitigation always involving the risk of economic losses, it is vital to examining the trade-off between mitigation policies and economic development. Here, we examined the extent to which the economic growth is decoupled from three-perspective emissions, i.e., production-, consumption- and income-based emissions. Results showed that 90%, 73% and 80% of Chinese provinces have achieved decoupling of GDP from production-, consumption- and income-based emissions during 2012–2017. We also investigated and compared dominant drivers (economic structure, emission intensity, per capita GDP, and population size) of emission changes among four types of provinces. Emission intensity was identified as the most important driver in terms of emission mitigation, while per capita GDP and population were the major ones adversely affecting emission mitigation. We put forward different mitigation suggestions for these provinces. Provinces, achieving three-perspective decoupling, should sustain technological improvement of key industrial enterprises. Downstream provinces that are still coupled from consumption-based emissions should adjust their consumption structure and consuming less emission-intensive products from upstream sectors. Upstream provinces, still coupled from income-based emissions, should adjust their allocation behaviors, e.g., distributing their primary or intermediate goods and services to low-carbon producers. Government should also adjust the rates of taxes and subsidies on products, and the rates of loans to the upstream producers. Provinces, still coupled from three-perspective emissions, should invest more in cleaner production technologies and promote applications to emission-intensive industries.

Internationally Linked Firms and Productivity in Pakistan: A Look at the Top End of the Distribution

This paper examines productivity drivers for Pakistani publicly listed firms from 2012 to 2017, with a focus on policy and outcome measures of integration in upstream sectors. We find that increased import duties on intermediates, and reduced FDI in upstream services, are associated with a reduction in productivities downstream. Gains from lower input tariffs accrue to firms that cannot secure duty exemptions—domestic-oriented firms and smaller exporters. Gains from upstream services FDI accrue mostly to firms that are further from the productivity frontier. Our results suggest that productivity growth in Pakistan would benefit from increased exposure of upstream sectors to global markets.

Dynamics of Trade Credit in China

Abstract We use Chinese manufacturing data to show that upstream manufacturing industries received higher credit during the monetary expansion of 2005–11. However, the higher credit received by upstream industries did not generate a similar increase in ‘trade lending’ to downstream industries, which limited the transmission of the credit expansion to the whole manufacturing sector. We develop a model that formalises some of the key features of the Chinese economy, and show why a credit expansion tilted toward the upstream sector may not fully cascade to the whole economy.

Flexibility and Frictions in Multisector Models

We show that during the Great Recession, more-flexible sectors paid lower sectoral bond spreads. We rationalize this fact with a model with input-output linkages, heterogeneous elasticities, and binding working capital constraints in the use of intermediates. We show that the difference in flexibility between upstream and downstream sectors is key for determining the role of input-output linkages in amplifying or mitigating distortions. Calibrating the model to the US economy, we find that our sectoral elasticity estimates amplify distortions by a factor of 1.7 compared to the Cobb-Douglas case, and generate an input-output multiplier 1.2 times the homogeneous elasticity case. (JEL E23, E32, E43, E44, H56, L16)

Russian fuel and energy complex technology policy at the moment of energy transition

The objectives of utilizing the most out of scientific, technical and production potential of Russian Fuel and Energy Complex (FEC) to safeguard technological independence and economic development at the state of energy transition is reviewed in the paper. Main trends for the required multidimentional technical development of the FEC: local R&D and manufacturing for conventional industries, Industry 4.0 and energy transition technologies (including all aspects of reduce, reuse, recycle and remove greenhouse gases), industrial safety and environmental protection are covered. The author have reviewed the global innovation index and global investments market in R&D, presented an analysis of Norwegian, American and Chinese experience to flourish country investments in technical development. Some of the key priorities for the further development of conventional upstream sector have been identified and includes permafrost monitoring, reservoir digital twins, hard to recover reservoirs technologies, permanently deployed well monitoring systems, energy harvesting and energy efficiency technologies, CCUS. Specific suggestions to expand the public private partnership are presented as the ways to streamline technology development in Russian FEC. The author would like to express sincere appreciation to the director general advisor of the FSBU Russian Energy Agency D. A. Kozlova for the fruitful discussion.

ANALISIS PENGEMBANGAN DAN KELAYAKAN USAHA OBAT TRADISIONAL JAMU MASYARAKAT KABUPATEN KULONPROGO

On the economic side, the herbal medicine industry has contributed greatly to national income, increasing people’s welfare and providing employment opportunities. Approximately 99% of herbal ingredients are domestic products and are considered capable of bringing a significant multiplier effect in economic growth in Indonesia, starting from the upstream sector (agriculture) to the downstream sector which includes industry and trade. However, along with the incessant variety of medicines (pharmaceuticals and imported herbal medicines) that are circulating and appear to be attractive to the public, it is not impossible that the demand for herbal medicines as traditional medicines in the last five years has tended to decline. Considering that herbal medicine is a product of the nation’s cultural heritage and has contributed greatly to the creation of domestic workers, the herbal medicine industry, which incidentally is a small and medium industry, must continue to exist amid increasingly fierce competition. Kulonprogo Regency has quite a number of diverse herbal and traditional medicinal plants businesses, most of which are classified as UMKM.. In general, the business diversity is divided into four types of businesses, namely, (1). Liquid herbal medicine business; (2). Herbal medicine business; (3). Herbal dipping business; and (4). Business of herbal tablets/capsules. In order to survive, they need to find some business strategy development to remain viable and profitable. Based on these problems, it is necessary to research the Feasibility and Development Analysis of the Traditional Herbal Medicine Business of the Kulonprogo Regency, with the aim of finding several development strategies and business feasibility. The sample was randomly selected as many as 30 traditional herbal medicine business actors in Kulonprogo Regency. Through the results of the SWOT analysis, there are several business strategies, including (1). Increasing the scale of production and business scale, (2). Following the development of market trends, (3). Marketing innovation and market expansion. (4). Development of licensing legality (certification), such as the legality of an official distribution permit, and being under the guidance of the health office/BPOM. Meanwhile, based on the business feasibility analysis using the Payback Periode (PP) and Benefit Cost Ratio (B/C) method, the liquid herbal medicine business, the brewed herbal medicine business, the dipping herbal medicine business, and the herbal tablet business, capsules are feasible

A systematic review of Industry 4.0 maturity models: applicability in the O&G upstream industry

PurposeThe study aims to review the currently available Industry 4.0 (I4.0) maturity models (MMs) for manufacturing industries and analyse their applicability in the oil and gas (O&G) upstream sector. Knowing that the growth in demand for energy through crude oil and natural gas is still viable over the next decade, there is the drive to ensure sustenance and improvement in production. The study sees an opportunity in harnessing the gains of Industry 4.0 technologies for better solution-driven strategies in production processes, equipment availability and reliability which would translate into higher production performance. So, a review on the Industry 4.0 MMs is considered important.Design/methodology/approachA systematic and in-depth literature review was performed to identify the specific requirements of this industry. This study examined the key characteristics of the O&G upstream sector and identified research gaps that need to be addressed to successfully support this industry for Industry 4.0 implementation. An Industry 4.0 MM that reflects the industrial realities for this industry more accurately from insights drawn from reviews of existing MMs is proposedFindingsThe review of 19 selected Industry 4.0 MMs revealed that the existing MMs are not a direct fit for the O&G upstream industry. Only a few of the models were clear on validation but with subjectivity, low number of persons and industries involved as limitations; none of the models confirmed validation with the O&G industry. There are varying views on the model dimensions and maturity levels by each author and not all required areas specific to the O&G industries were acknowledged by the models. An MM specific to this industry is therefore required.Originality/valueAlthough the journey of digitisation has commenced in the O&G industry, a reduction with the challenges of transition towards Industry 4.0 implementation and provision of support for improved efficiency is assured using a robust MM, as proposed in this paper.

Concurrent 7. Presentation for: Queensland’s risk-based petroleum and gas regulator

Presented on Tuesday 17 May: Session 7 Resources Safety & Health Queensland (RSHQ) is the new independent regulator for occupational safety and health in Queensland’s petroleum and gas, mining, quarrying and explosives sector. RSHQ was created by the Queensland Government on 1 July 2020 as a singular focussed statutory body. It is a stand-alone organisation quite separate from its former portfolio Department – the Department of Natural Resources Mines and Energy. RSHQ’s vision is ‘zero serious harm’. In pursuit of this lofty vision – which is defined as operations and activities free from fatality, hospitalisation and confirmed cases of disease – RSHQ applies its regulatory approach which is risk-based and data-driven. This paper outlines the regulator’s approach, values and principles to supporting the upstream petroleum sector in Queensland in order to protect its workers and meet its obligations under law. Importantly, RSHQ compliance principles and practice should be understood by operators, contractors, workers and other key stakeholders in the petroleum sector. Case studies demonstrate the efficacy of this approach as it applies to the construction, operation and decommissioning of wells, gathering systems and plant. Operators, contractors and service companies will significantly benefit from reading and hearing more from the regulator at the APPEA Conference in Brisbane in 2022. To access the presentation click the link on the right. To read the full paper click here

Stranded fossil-fuel assets translate to major losses for investors in advanced economies

The distribution of ownership of transition risk associated with stranded fossil-fuel assets remains poorly understood. We calculate that global stranded assets as present value of future lost profits in the upstream oil and gas sector exceed US$1 trillion under plausible changes in expectations about the effects of climate policy. We trace the equity risk ownership from 43,439 oil and gas production assets through a global equity network of 1.8 million companies to their ultimate owners. Most of the market risk falls on private investors, overwhelmingly in OECD countries, including substantial exposure through pension funds and financial markets. The ownership distribution reveals an international net transfer of more than 15% of global stranded asset risk to OECD-based investors. Rich country stakeholders therefore have a major stake in how the transition in oil and gas production is managed, as ongoing supporters of the fossil-fuel economy and potentially exposed owners of stranded assets.

The impact of foreign direct investment on innovation: Evidence from patent filings and citations in China

This paper studies how foreign direct investment (FDI) affects innovation in the host country, using matched firm-level patent data of Chinese firms. The data contain multidimensional information about patent counts and citations, which, together with an identification strategy based on Lu et al. (2017), allows us to measure innovation comprehensively and to uncover the causal relationship. Our empirical analysis shows that FDI has positive intra-industry effects on the quantity and quality of innovation, as well as radical innovation, by Chinese firms. We show that these positive effects are driven by increases in competition, rather than by knowledge spillovers from FDI which is measured by patent citations between domestic firms and foreign invested enterprises (FIEs). We further investigate the inter-industry effects of FDI and find that FDI has positive vertical effects on innovation in upstream sectors through backward knowledge spillovers.

China’s power transformation may drastically change employment patterns in the power sector and its upstream supply chains

China’s power sector, as the major CO2 emitter, has experienced significant restructuring that has had profound impacts on employment in both power and its upstream sectors. Combining input–output and structural path analysis, we quantified the direct and indirect impacts of power transformation on employment in China between 2012 and 2017. Direct employment in the power generation sector witnessed a net growth of 0.12 million, while over 10 times that number of jobs (1.40 million) have been lost in the upstream sectors, mainly in coal mining and washing, finance, oil and gas extraction and transportation. Among the top 10 critical paths, the share of employment driven by solar and wind power increased to 12.31% in 2017, more than nine times that in 2012. Furthermore, three scenarios have been set up to evaluate the employment patterns in 2030 and 2050. Under the 1.5 °C scenario, projection shows that the power sector could support over 5 million jobs in 2050, with more than 80% of these being related to renewable energy. Policy suggestions for a just transition, such as resettlement of laid-off workers and job transfer in upstream industries, are comprehensively discussed.

Early impacts of the largest Amazonian hydropower project on fish communities

Hydropower is a threat to freshwater fishes. Despite a recent boom in dam construction, few studies have assessed their impact on mega-diverse tropical rivers. Using a before-after study design, we investigated the early impacts of the Belo Monte hydroelectric complex, the third-largest hydropower project in the world, on fishes of the Xingu River, a major clear-water tributary of the lower Amazon. We explored impacts across different river sectors (upstream, reservoir, reduced flow sector, and downstream) and spatial scales (individual sectors vs. all sectors combined) using joint species distribution models and different facets of diversity (taxonomic, functional, and phylogenetic). After 5 years of the Belo Monte operation, species richness declined ~12% in lentic and ~16% in lotic environments. Changes in abundance were of less magnitude (<4%). Effects were particularly negative for species of the families Serrasalmidae (mainly pacus), Anostomidae (headstanders), Auchenipteridae, and Pimelodidae (catfishes), whereas no taxonomic group consistently increased in richness or abundance. The reservoir and downstream sectors were the most impacted, with declines of ~24–29% in fish species richness, overall reductions in fish body size and trophic level, and a change in average body shape. Richness and abundance also declined in the reduced river flow, and changes in size, shape, and position of fins were observed. Relatively minor changes were found in the upstream sector. Variation in functional and phylogenetic diversity following river impoundment was subtle; however, across sectors, we found a reduction in functional divergence, indicating a decline in the abundance of species located near the extremities of community functional space. This may be the first sign of an environmental filtering process reducing functional diversity in the region. Greater changes in flow and habitats are expected as hydropower operations ramp up, and continued monitoring is warranted to understand the full scope and magnitude of ecological impacts.

Queensland’s risk-based petroleum and gas regulator

Resources Safety &amp; Health Queensland (RSHQ) is the new independent regulator for occupational safety and health in Queensland’s petroleum and gas, mining, quarrying and explosives sector. RSHQ was created by the Queensland Government on 1 July 2020 as a singular focussed statutory body. It is a stand-alone organisation quite separate from its former portfolio Department – the Department of Natural Resources Mines and Energy. RSHQ’s vision is ‘zero serious harm’. In pursuit of this lofty vision – which is defined as operations and activities free from fatality, hospitalisation and confirmed cases of disease – RSHQ applies its regulatory approach which is risk-based and data-driven. This paper outlines the regulator’s approach, values and principles to supporting the upstream petroleum sector in Queensland in order to protect its workers and meet its obligations under law. Importantly, RSHQ compliance principles and practice should be understood by operators, contractors, workers and other key stakeholders in the petroleum sector. Case studies demonstrate the efficacy of this approach as it applies to the construction, operation and decommissioning of wells, gathering systems and plant. Operators, contractors and service companies will significantly benefit from reading and hearing more from the regulator at the APPEA Conference in Brisbane in 2022.

Analysis of Gray Water Footprint Changes and Driving Forces Caused by Sectoral Trade in Southeast China

Evaluation of gray water footprint (GWF) flow and its driving mechanism is imperative to trace the source of pollution and formulate the pollution responsibility-sharing strategies to reduce the shortage of water. We quantify the GWF of 22 sectors in Fujian Province in 2002, 2007, 2012, and 2017, using an economic input–output life cycle assessment (EIO-LCA) model, and establish a five-factor structural decomposition analysis (SDA) model to track the driving forces of the GWF. The results show that the animal husbandry sector of the primary industry is the largest outsourcing sector, outsourcing an average of 7 Bm3 GWF by other regions annually. The construction sector is an industry with more pollution outsourcing at the production end, and it should take additional pollution responsibility for its upstream sector. The changes of the GWF in Fujian Province are mainly driven by the final demand per capita and GWF outsourcing. The sector most affected by force drivers is construction, followed by machinery and equipment manufacturing, and other services. This study better reflects the sectoral pollution outsourcing situation by assessing sectoral GWF flow and net inflow GWF caused by sector trading. We aim at identifying new sectors of water pollution and sharing the pollution responsibility between upstream and downstream, providing a new perspective to analyze water quality problems in water-rich regions. Moreover, our findings imply an urgent need to develop policies related to water pollution transfer for various sectors from a whole supply chain perspective.

Determinants and regional contributions of industrial CO2 emissions inequality: A consumption-based perspective

The assessment of industrial consumption-based carbon dioxide emissions could explain interregional differences in carbon dioxide emissions resulting from economic activity. This study aims to assess per capita industrial consumption-based carbon dioxide emissions inequality across provinces, municipalities, and autonomous regions in China from 2002 to 2017. The status and main determinants of per capita industrial consumption-based carbon dioxide emissions inequality are calculated using environmentally multi-regional input–output models and the Theil index, respectively. Comparisons with accounting results from the production side are then analyzed. The main conclusions are as follows: (1) From 2002 to 2012, both per capita industrial consumption-based carbon dioxide emissions and per capita industrial production-based carbon dioxide emissions in China show an obvious upward trend, and gradually stabilize in 2015 and beyond. (2) Economic trade leads to obvious carbon leakage among Chinese provinces and industrial sectors: the consumption-based carbon dioxide emissions of the downstream sector of the industrial supply chain is less than its production-based carbon dioxide emissions, while the carbon dioxide emissions of upstream industrial sectors is on the contrary. (3) China's per capita industrial production-based carbon dioxide emissions inequality is significantly greater than consumption-based inequality, and this gap is gradually widening. Among them, between-group inequality is the key component, but the contribution of within-group inequality is gradually increasing, which tends to exceed between-group inequality. (4) Among the eight economic groups in China, per capita consumption is the main driving factor of consumption-based carbon dioxide emissions inequality, but the industrial production carbon dioxide emissions intensity is the main contributor to production-based inequality. The above findings would provide certain theoretical support and policy references for policymakers when formulating industrial carbon emissions reduction policies.

PERLINDUNGAN HUKUM TERHADAP KONSUMEN ATAS KERUGIAN AKIBAT MEMBELI DAGING SAPI GLONGGONGAN

The rampant circulation of glonggongan beef causes losses for consumers because they get a discrepancy in the quality of the beef so that it has an impact on the health and safety of consumers when consuming glonggongan beef. This study will examine the form of protection for consumers and the form of government responsibility related to the sale of glonggongan beef in traditional markets. This study uses a normative method, with a statutory approach and a conceptual approach to answer the formulation of the problem in this study. Based on the results of the research, the form of legal protection for consumers for quality discrepancies in glonggongan beef is in the form of compensation which includes products, treatment costs, medical costs and criminal prosecution. This form of legal protection for consumers is regulated in Article 19 of the Consumer Protection Law concerning the accountability of business actors and Article 8 of the Consumer Protection Law concerning prohibitions for business actors. In terms of the government's responsibility regarding the circulation of glonggongan beef, efforts are made to overcome it either with criminal law (Penal Efforts) or without criminal law (Non-Penal Efforts). In the penal effort, dispute resolution efforts are carried out through the courts by carrying out administrative and criminal prosecutions. In addition, the penal effort can also be carried out out of court through BPSK or LPKSM with 3 (three) settlement procedures, namely Conciliation, Mediation and Arbitration. Meanwhile, Non-Penal Efforts carried out by the government as a form of responsibility are by conducting outreach or outreach to the community, raids with other law enforcement officers, taking firm action and tightening supervision in the upstream sector, namely slaughterhouses