Global Energy Systems and International Trade

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2020

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Abstract

This dissertation is a collection of studies at the intersection of global energy systems and international trade. In the first study (Chapter 2), we estimate the sensitivities of primary energy exports to disruptions through maritime chokepoints. The Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, is the conduit between the Persian Gulf region and the rest of the world. The countries in this region are rich in crude oil resources and are major energy exporters. In this study, we apply a two-stage least-squares (2SLS) approach to estimate the impacts of a soft restriction in the Strait of Hormuz to energy exports from the region on a fuel-by-fuel, country-by-country basis. The soft restriction that we evaluate here is maritime piracy, a low-grade but chronic hazard for maritime shipping. Our results suggest that maritime piracy is associated with a 7.5-vessel reduction through the Strait of Hormuz two years after the event occurred. We also find that energy exports from the Persian Gulf are generally resilient to these soft restrictions. The exceptions are refined petroleum products from smaller energy exporters, specifically Bahrain and Kuwait. We find that this is linked to different market structures for refined petroleum products and crude oil. Crude oil is demanded globally, but can only be produced in select regions. Refined petroleum products are also demanded globally, but can be produced where crude oil has been imported.

The second study (Chapter 3) introduces and applies a new hybrid-unit input-output database of energy flows in the global economy. This database, the Hybridized Option for Modeling Input-output Energy Systems (HOMIES), models the financial flows of 26 non-energy sectors and the energy flows of 13 energy types among 136 countries over 20 years (1995-2015). HOMIES is able to trace flows of primary energy (e.g. crude oil), secondary energy (e.g. electricity), and embodied energy. The latter consists of direct energy used to produce a final good and indirect energy incorporated in intermediate goods and services used to make a final product. Using HOMIES, we find that 23% of the world’s embodied energy network is comprised of trade linkages in indirect energy between primary energy producing countries and countries with which they do not have direct trade ties. We also find that the global economy is 90% more dependent on imports of indirect energy than direct energy.

The third study (Chapter 4) applies HOMIES to the global supply chains for transport equipment. This sector is unique in its complexity; it requires many kinds of manufacturing inputs from many different countries. It is also a key factor in achieving mobility security, or the ability to meet global transportation demand. The transport equipment sector relies heavily on maritime transport and, consequently, on transit through maritime chokepoints. In this study, we build an extension to HOMIES that isolates the portion of international trade that relies on thirteen key maritime chokepoints. This extension, HOMIES-CP, also differentiates between direct and indirect chokepoint dependence. The former is estimated based on bilateral transactions that require chokepoint transit. The latter compounds chokepoint dependencies as a product or service moves through the supply chain. In this study, we use HOMIES-CP to examine the mechanisms that drive chokepoint dependence in the major exporters and importers of transport equipment.

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Shepard, Jun Ukita (2020). Global Energy Systems and International Trade. Dissertation, Duke University. Retrieved from https://hdl.handle.net/10161/22160.

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Dukes student scholarship is made available to the public using a Creative Commons Attribution / Non-commercial / No derivative (CC-BY-NC-ND) license.