Bayesian estimation and selection of nonlinear vector error correction models: The case of the sugar-ethanol-oil nexus in Brazil

Nonlinear adjustment toward long-run price equilibrium relationships in the sugar-ethanol-oil nexus in Brazil is examined. We develop generalized bivariate error correction models that allow for cointegration between sugar, ethanol, and oil prices, where dynamic adjustments are potentially nonlinear functions of the disequilibrium errors. A range of models are estimated using Bayesian Monte Carlo Markov Chain algorithms and compared using Bayesian model selection methods. The results suggest that the long-run drivers of Brazilian sugar prices are oil prices and that there are nonlinearities in the adjustment processes of sugar and ethanol prices to oil price but linear adjustment between ethanol and sugar prices.

Kazakhstan: long-term economic growth and the role of the oil sector

This study combines a narrative and modelling framework to analyse the development of Kazakhstan’s oil sector since its takeoff following separation from the USSR. As in the case of other emerging or transitional countries with large natural resource endowments, a key question is whether the exploitation of the natural resource is a benefit to longer term economic development: is it a curse, a blessing – or neither? Narrative evidence suggests that the establishment of good governance, in terms of institutions and policies, provides a background to sound long-term development, especially if combined with the development of sectors outside the natural resource sector, for example diversification into manufacturing and services, often through attracting FDI. The narrative is supported by econometric modelling of the relationship between domestic output, overseas output and exports of oil, which finds in favour of a sustained positive effect of oil exports on GDP. The model then provides a basis for projection of the growth in GDP given a consensus view of likely developments in the oil price.

The olive oil and cotton lint sectors in the European Union

This paper examines and analyses the impacts of the reformed CAP as well as the decisions of the new round of negotiations for the olive oil and cotton sectors in the European Union. The aim of this study is to estimate changes in supply (agricultural supply plus intermediate demand and final production), demand (consumption), price and stock formation (import, export, beginning and ending stocks, national price formation) for both the olive oil and cotton sectors. The model designed for this purpose is partial equilibrium and policy oriented. The objectives of this model are to estimate changes in the production and consumption of the two products concerned, to determine how the reformed CAP and the new round of negotiations of the WTO affect these two sectors to analyse the evolution of export and import volumes, and finally to determine how this evolution will influence the welfare situation of the olive and cotton sectors.

Design and techno-economic evaluation of microbial oil production as a renewable resource for biodiesel and oleochemical production

Experimental results from the open literature have been employed for the design and techno-economic evaluation of four process flowsheets for the production of microbial oil or biodiesel. The fermentation of glucose-based media using the yeast strain Rhodosporidium toruloides has been considered. Biodiesel production was based on the exploitation of either direct transesterification (without extraction of lipids from microbial biomass) or indirect transesterifaction of extracted microbial oil. When glucose-based renewable resources are used as carbon source for an annual production capacity of 10,000 t microbial oil and zero cost of glucose (assuming development of integrated biorefineries in existing industries utilising waste or by-product streams) the estimated unitary cost of purified microbial oil is $3.4/kg. Biodiesel production via indirect transesterification of extracted microbial oil proved more cost-competitive process compared to the direct conversion of dried yeast cells. For a price of glucose of $400/t oil production cost and biodiesel production cost are estimated to be $5.5/kg oil and $5.9/kg biodiesel, correspondingly. Industrial implementation of microbial oil production from oleaginous yeast is strongly dependent on the feedstock used and on the fermentation stage where significantly higher productivities and final microbial oil concentrations should be achieved.

Storm prediction research and its application to the oil/gas industry

The accurate prediction of storms is vital to the oil and gas sector for the management of their operations. An overview of research exploring the prediction of storms by ensemble prediction systems is presented and its application to the oil and gas sector is discussed. The analysis method used requires larger amounts of data storage and computer processing time than other more conventional analysis methods. To overcome these difficulties eScience techniques have been utilised. These techniques potentially have applications to the oil and gas sector to help incorporate environmental data into their information systems

A preliminary investigation of the release of oil from contaminated clays and other fine-grained sediments during consolidation

Fine-grained sediments on land, or in a freshwater or marine environment, may become contaminated with a wide range of pollutants including hydrocarbons. This paper is concerned with preliminary studies of the mobilization and transportation of hydrocarbons, during the process of consolidation, to adjacent sediments or water bodies. A modified Rowe Cell was used to measure the consolidation properties of prepared kaolinite and bentonite clay-water slurries, with and without the addition of oil, along with hydrocarbon-bearing drill-cuttings samples taken from the sea-bed adjacent to two North Sea oil-well platforms. The consolidation properties of the kaolinite and bentonite clay slurries were little altered by the addition of oil, which was present at concentrations of between 8073 and 59 572 mg kg(-1). During each consolidation stage, samples of the expelled pore-fluids were collected and analysed for oil content. These values were very low in comparison with the original oil concentration in the samples and changed little between each consolidation stage. Analysis of the slurry samples both before and after consolidation confirms that, proportionally, little oil is removed as a result of consolidation. The implication of these results is that, for the range of samples tested, the very high hydraulic gradients and particle rearrangements that occur during the process of consolidation are capable of releasing only proportionally small amounts of oil bound to the fine-grained clay and silt particles.

Institutional sustainability: at what price? UNDP and the new cost-sharing model in Brazil

By the turn of the twenty-first century, UNDP had embraced a new form of funding based on ‘cost-sharing’, with this source accounting for 51 per cent of the organisation’s total expenditure worldwide in 2000. Unlike the traditional donor - recipient relationship so common with development projects, the new cost-sharing modality has created a situation whereby UNDP local offices become ‘subcontractors’ and agencies of the recipient countries become ‘clients’. This paper explores this transition in the context of Brazil, focusing on how the new modality may have compromised UNDP’s ability to promote Sustainable Human Development, as established in its mandate. The great enthusiasm for this modality within the UN system and its potential application to other developing countries increase the importance of a systematic assessment of its impact and developmental consequences.

A preliminary investigation of the release of oil from contaminated clays and other fine-grained sediments during consolidation

Fine-grained sediments on land, or in a freshwater or marine environment, may become contaminated with a wide range of pollutants including hydrocarbons. This paper is concerned with preliminary studies of the mobilization and transportation of hydrocarbons, during the process of consolidation, to adjacent sediments or water bodies. A modified Rowe Cell was used to measure the consolidation properties of prepared kaolinite and bentonite clay-water slurries, with and without the addition of oil, along with hydrocarbon-bearing drill-cuttings samples taken from the sea-bed adjacent to two North Sea oil-well platforms. The consolidation properties of the kaolinite and bentonite clay slurries were little altered by the addition of oil, which was present at concentrations of between 8073 and 59 572 mg kg(-1). During each consolidation stage, samples of the expelled pore-fluids were collected and analysed for oil content. These values were very low in comparison with the original oil concentration in the samples and changed little between each consolidation stage. Analysis of the slurry samples both before and after consolidation confirms that, proportionally, little oil is removed as a result of consolidation. The implication of these results is that, for the range of samples tested, the very high hydraulic gradients and particle rearrangements that occur during the process of consolidation are capable of releasing only proportionally small amounts of oil bound to the fine-grained clay and silt particles.

Nitrogen management is essential to prevent tropical oil palm plantations from causing ozone pollution

More than half the world's rainforest has been lost to agriculture since the Industrial Revolution. Among the most widespread tropical crops is oil palm (Elaeis guineensis): global production now exceeds 35 million tonnes per year. In Malaysia, for example, 13% of land area is now oil palm plantation, compared with 1% in 1974. There are enormous pressures to increase palm oil production for food, domestic products, and, especially, biofuels. Greater use of palm oil for biofuel production is predicated on the assumption that palm oil is an “environmentally friendly” fuel feedstock. Here we show, using measurements and models, that oil palm plantations in Malaysia directly emit more oxides of nitrogen and volatile organic compounds than rainforest. These compounds lead to the production of ground-level ozone (O3), an air pollutant that damages human health, plants, and materials, reduces crop productivity, and has effects on the Earth's climate. Our measurements show that, at present, O3 concentrations do not differ significantly over rainforest and adjacent oil palm plantation landscapes. However, our model calculations predict that if concentrations of oxides of nitrogen in Borneo are allowed to reach those currently seen over rural North America and Europe, ground-level O3 concentrations will reach 100 parts per billion (109) volume (ppbv) and exceed levels known to be harmful to human health. Our study provides an early warning of the urgent need to develop policies that manage nitrogen emissions if the detrimental effects of palm oil production on air quality and climate are to be avoided.

Risk and price in the bidding process of contractors

Formal and analytical risk models prescribe how risk should be incorporated in construction bids. However, the actual process of how contractors and their clients negotiate and agree on price is complex, and not clearly articulated in the literature. Using participant observation, the entire tender process was shadowed in two leading UK construction firms. This was compared to propositions in analytical models and significant differences were found. 670 hours of work observed in both firms revealed three stages of the bidding process. Bidding activities were categorized and their extent estimated as deskwork (32%), calculations (19%), meetings (14%), documents (13%), off-days (11%), conversations (7%), correspondence (3%) and travel (1%). Risk allowances of 1-2% were priced in some bids and three tiers of risk apportionment in bids were identified. However, priced risks may sometimes be excluded from the final bidding price to enhance competitiveness. Thus, although risk apportionment affects a contractor’s pricing strategy, other complex, microeconomic factors also affect price. Instead of pricing in contingencies, risk was priced mostly through contractual rather than price mechanisms, to reflect commercial imperatives. The findings explain why some assumptions underpinning analytical models may not be sustainable in practice and why what actually happens in practice is important for those who seek to model the pricing of construction bids.

Threshold effects in price transmission: The case of Brazilian wheat, maize, and soya prices

Recent studies into price transmission have recognized the important role played by transport and transaction costs. Threshold models are one approach to accommodate such costs. We develop a generalized Threshold Error Correction Model to test for the presence and form of threshold behavior in price transmission that is symmetric around equilibrium. We use monthly wheat, maize, and soya prices from the United States, Argentina, and Brazil to demonstrate this model. Classical estimation of these generalized models can present challenges but Bayesian techniques avoid many of these problems. Evidence for thresholds is found in three of the five commodity price pairs investigated.

Effect of replacing calcium salts of palm oil distillate with rapeseed oil, milled or whole rapeseeds on milk fatty-acid composition in cows fed maize silage-based diets

Inclusion of rapeseed feeds in dairy cow diets has the potential to reduce milk fat saturated fatty acid (SFA) and increase cis-monounsaturated fatty acid (cis-MUFA) content but effectiveness may depend on the form in which the rapeseed is presented. Four mid-lactation Holstein dairy cows were allocated to four maize silage-based dietary treatments according to a 4 x 4 Latin Square design, with 28-day experimental periods. Treatments consisted of a control diet (C containing 49 g/kg dry matter (DM) of calcium salts of palm oil distillate (CPO), or 49 g/kg DM of oil supplied as whole rapeseeds (WR), rapeseeds milled with wheat (MR) or rapeseed oil (RO). Replacing CPO with rapeseed feeds had no effect (P > 0.05) on milk fat and protein content, while milk yields were higher (P < 0.05) for RO and MR compared with WR (37.1, 38.1 and 34.3 kg/day, respectively). Substituting CPO with RO or MR reduced (P < 0.05) milk fat total SFA content (69.6, 55.6, 71.7 and 61.5 g/100g fatty acids for C, RO, WR and MR, respectively) and enhanced (P < 0.05) milk cis-9 18:1 MUFA concentrations (corresponding values 18.6, 24.3, 17.0 and 23.0 g/100g fatty acids) compared with C and WR. Treatments RO and MR also increased (P < 0.05) milk trans-MUFA content (4.4, 6.8, 10.5 g/100g fatty acids, C MR and RO, respectively). A lack of significant changes in milk fat composition when replacing CPO with WR suggests limited bioavailability of fatty acids in intact rapeseeds. In conclusion, replacing a commercial palm oil-based fat supplement in the diet with milled rapeseeds or rapeseed oil represented an effective strategy to alter milk fatty acid composition with the potential to improve human health. Inclusion of processed rapeseeds offered a good compromise for reducing milk SFA and increasing cis-MUFA, whilst minimising milk trans-MUFA and negative effects on animal performance.