The 35th IAEE International Conference Down Under Delivers Over and Above
Lori Smith Schell
President, Empowered Energy (Durango, Colorado)
2012 USAEE President-Elect
The 35th IAEE International Conference “Energy Markets Evolution under Global Carbon Constraints: Assessing Kyoto and Looking Forward” was held from 24-27 June 2012 in Perth, Western Australia.
The IAEE Conference organizers could not have asked for better timing with respect to being topical and timely, given that Australia’s A$23 per tonne (~US$21.50 per ton) CO2 tax was being instituted on 1 July 2012, the following Monday. Significant discussion on the details and potential impacts of the pending CO2 tax on nearly 300 entities occurred in several plenaries and concurrent sessions.
Photo of several USAEE members who attended the IAEE Conference in Perth
(L to R): Burcu Cigerli, Perry Sioshansi, Carol Dahl, Dave Williams, Jr., Becky Lafrancois, Mine Yucel, Peter Hartley, Lori Schell, Ken Medlock.
The IAEE Conference Welcome Reception was held Sunday evening at the historic Perth Town Hall in downtown Perth, with welcoming words provided by numerous dignitaries, including the Lord Mayor of Perth, Lisa Scaffidi, who is currently vying for World Mayor 2012. A Student Happy Hour was held immediately prior to the Welcome Reception.
The IAEE Conference Grand Opening on Monday morning kicked off three days of plenaries and concurrent sessions at the Perth Convention Exhibition Center. The Conference Committee of Ronald Ripple (Curtin Business School), Tony Owen (UCL Australia), Daniel Packey (Curtin Graduate School of Business) and Helen Cabalu (Curtin Business School), organized an informative, jam-packed program. Each day included two plenaries and two concurrent sessions, with the latter each having six separate tracks with three or four papers in each track. The Perth Convention Exhibition Centre was well-suited to the IAEE Conference, with impeccable catering and a staff that went out of its way to ensure that everything ran smoothly. Merle Nuber and her staff are to be commended for their successful run as Conference Secretariat.
The IAEE Conference had 219 total registered attendees from 32 different countries. Australians made up one-third of the delegates, with another one-third comprised of delegates from other Asian, Asia- Pacific, and Middle Eastern countries. The remaining delegates hailed mainly from Europe and the Americas, with a single delegate from South Africa and Zimbabwe. There were two dozen delegates from the United States, many of whom participated in plenary and concurrent sessions. The 35 students represented nearly as many universities and competition for the Best Student Paper award was keen. Lisa Leinert of ETH Zürich won the Best Student Paper competition with her analysis of Hotelling principles in a paper entitled “Does the Oil Price Adjust Optimally to Oil Field Discoveries?” Other finalists included Burcu Cigerli of Rice University in Houston (“An Imperfectly Competitive Model of the World Gas Market”), Clemens Haftendorn of DIW Berlin (“Evidence of Market Power in the Atlantic Steam Coal Market Using Oligopoly Models with a Competitive Fringe”), and Wei Jim of Australian National University (“Can Technological Innovation Help China Take on Its Climate Responsibility? An Intertemporal General Equilibrium Analysis”).
The opening Welcome to Country session included a traditional aboriginal smoke ceremony performed by Simon Forrest, Director, Centre for Aboriginal Studies, Curtin University. To avoid an unplanned fire drill, all smoke alarms were temporarily disabled to allow the smoke ceremony to go off without a hitch. IAEE President Lars Bergman (Stockholm School of Economics) then officially opened the IAEE Conference. The Honourable Peter Collier, Western Australia Minister of Energy, provided an entertaining and unapologetically provincial overview of the importance of mineral and energy development in Western Australia to the national economy.
Equally entertaining and thought provoking was the Opening Plenary Session, which paired Ambassador Richard Jones, Deputy Executive Director, International Energy Agency, with Fereidun Fesharaki, FACTS Global Energy. Dr. Fesharaki provided the amusing analogy of oil markets being akin to dating whereas liquefied natural gas (LNG) markets were more like marriage, LNG markets entailing as they do long-term commitments and complications. Concurrent session papers related to oil and gas markets were presented by past USAEE and IAEE President Mine Yucel of the Dallas Federal Reserve Bank and current USAEE President Peter Hartley of Rice University, respectively. Sonia Yeh of the University of California-Davis examined primary energy issues more broadly in her concurrent session paper on “Global and Regional Lifecycle Energy Efficiency of Fossil-Based Primary Energy Sources: Trends and Scenarios.”
The Awards Lunch on Monday honored Fereidun Fesharaki for his years of distinguished service and ceaseless efforts on behalf of the IAEE.
The Monday afternoon plenary on Electricity Markets included Allan Dawson (CEO, Western Australia Independent Market Operator), Richard Green (Imperial College, London), David Newbery (Imperial College, London), and Andrew Reeves (Chairman, Australian Energy Regulator). Several topics received the lion’s share of the discussion: (1) the diversity of electricity market evolution in various countries; (2) increasing capital requirements to replace aging infrastructure; (3) the importance of smart meters for increased demand response; and, (4) the impact of renewable portfolio standards on the electricity generating mix. Electricity-related concurrent session papers presented by USAEE members included a paper entitled “Ready or Not, Here Comes the Smart Grid” by Seth Blumsack of Penn State University; another entitled “Consequences of the Fukushima Daichi Nuclear Crisis on the Future of Energy Provision: Evidence from Coal, Gas and Renewable Markets” by Anastasia Shcherbak also of Penn State University; and a third by Stephen Poletti of the Electric Power Research Institute focusing on “Can Agent-Based Models Forecast Spot Prices in Electricity Markets? Evidence from New Zealand.” Unfortunately, an unavoidable scheduling conflict prevented Rod Eggert of Colorado School of Mines from presenting his concurrent session paper on “Modeling the Uranium and Enrichment Markets, 2010-2030.”
The highlight of the Conference Banquet on Monday evening was a series of aboriginal dances performed by the all-male Wadumbah dance troupe and the presentation of the Best Student Paper Award.
Tuesday’s plenary sessions focused on Energy Technology Perspectives in the morning and International Oil and Gas Markets in the afternoon. Tuesday’s lunch included Paul Appleby (BP Group) presenting highlights of the 2012 BP Statistical Review.
The only time the winter rains impacted the IAEE Conference was during the Tuesday evening offsite visit to the Freemantle Prison. Small groups of delegates dashed through the pouring rain from one part of the prison to the next, hearing different aspects of the prison’s frighteningly fascinating history at each stop. Delegates were rewarded with drinks and hors d’ oeuvres in one of the main prison blocks, accompanied by music from the aptly named duo, Carbon Tax, appropriately outfitted in prison garb. Despite the inundation, a good time was had by all.
Financing of Energy Projects was the kickoff plenary on Wednesday morning. Chairman Richard Sellers (Director General, Department of Mines and Petroleum, Western Australia) provided details on the enormous natural gas investments in Western Australia and postulated that unconventional gas would eventually eclipse offshore gas production. Rob Koh (ANZ Bank) outlined barriers to efficient development and to efficient financing, applying the adage of “Reduce, Reuse, Recycle” to capital management; his 20% per annum growth in capital investments in Australia from 2011-2016 clearly illustrated the scale of investments being discussed. Alan Langford (Bankwest) provided insights from a banker’s view of the GFC (global financial crisis) and QE (quantitative easing) 1 and 2, while also highlighting the Australian propensity for acronyms. Paul Simshauser (AGL Energy Ltd.) quantified the expected initial year impact of the Australian carbon tax at about A$8.75 billion, or about 0.67% of Australia’s Gross Domestic Product. Anna Agarwal of the Massachusetts Institute of Technology provided a complementary concurrent session paper on “Contracting Risks and Design of Optimal Incentives in Large Energy Infrastructure Projects.” Becky Lafrancois of Michigan Technological University examined the economic impact of wind power in her concurrent session paper entitled “Assessing the Impact of Wind Turbines on Property Values in New York.”
The final plenary on Wednesday afternoon was well suited to the IAEE Conference theme and addressed “Carbon Pricing across the Globe.” Quentin Grafton (Australian Bureau of Resources and Energy Economics) equated the A$23 per tonne of CO2 tax to a tax of A$3 per tonne (~US$2.80) of coal and discussed impacts and assistance to the Australian coal sector, which provides 40,000 jobs. Next up was Frank Jotzo (Australian National University), one of the architects of the Australian carbon tax, who emphasized that what happens in China is what really defines the global CO2 impact. ZhongXiang Zhang (East-West Center) focused on the issue of carbon leakage and competitive losses, identifying two channels for carbon leakage, namely competitiveness and the international fossil fuel channel; he advocated allocating emissions upstream rather than downstream to minimize carbon leakage. Concurrent session papers discussing the impact of carbon pricing and constraints included Seth Blumsack of Penn State University who presented an paper on “Electric-Sector Fuel Switching Under Carbon Constraints,” and Lori Schell of Empowered Energy who presented a paper on “Increased Renewables in California: Impact on Fossil Fuel Generation, Levelized Costs, and Grid CO2 Emissions.”
The IAEE Conference was preceded by an optional one-day pre-conference short course entitled “Introduction to Energy Economic and Policy Models” that was organized by Carol Dahl (Colorado School of Mines). About 30 conference attendees took advantage of four modeling sessions that covered different topics and were presented by different modelers. Yukari Yamashita (Japanese Institute of Energy Economics) set the stage for the day with her introduction to the importance and uses of economic and policy models. Roberto Aguilero (Curtin University) followed with a session entitled “Supply and Demand: The Modeler’s Basic Building Blocks.” The second modeling session was entitled “Energy Time Series Modeling and Forecasting” and was ably presented by USAEE President Peter Hartley (Rice University) on behalf of the absent Fred Joutz (George Washington University). Carol Dahl’s presentation on “Modeling Energy Economy Interactions” followed a networking lunch break. Yongho Chang (Nanyang Technological University) finished the day with a presentation on “Optimization Models for the Best Outcome.” The short course included several well provisioned coffee breaks and a networking lunch break, all of which were generously provided by Curtin’s Centre for Research in Energy and Minerals Economics (CRÈME) and the Department of Mineral and Energy Economics (DMEE).
Daegu City, South Korea, will be hosting the 36th IAEE International Conference “Energy Transition and Policy Challenges,” which will be held 16-20 June, 2013. Representatives from Daegu City hosted an information table throughout the IAEE Conference. The Daegu Conference Planning Meeting provided a great overview of the conference planning, including descriptions of several fascinating tours to nearby UNESCO World Heritage sights at Andong Hahoe Village and Gyeongju.
Thank you to all of those involved in planning the IAEE Conference in Perth, and to all delegates attending. It was by all accounts a very successful event.
Volume 20, No 3 Announcements