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61. Fracture Lines: Will Canada's Water Be Protected in the Rush to Develop Gas?

Author:
Ben Parfitt
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Munk School of Global Affairs at the University of Toronto
Abstract:
On October 14, 2010, POWI released a discussion paper and held a conference on Fracture Lines: Will Canada’s Water Be Protected in the Rush to Develop Shale Gas? The conference and the discussion paper were the first major formal public discussion in Canada of the shale gas issue. As supplies of fossil fuel dwindle, oil and gas companies are increasingly looking to unconventional sources such as shale gas to supply energy needs. The Fracture Lines paper outlined the potential impacts of shale gas exploration and production on groundwater resources, and described the paucity of groundwater mapping and lack of effective regulatory oversight. With possible shale gas deposits in BC, Alberta, Saskatchewan, Ontario, Quebec and New Brunswick and a loud public outcry against shale gas drilling in Quebec, the conference attracted a wealth of attention. Because of its availability in both languages and its timeliness, the conference received extensive media coverage and over 500 logins to the webcast. In the wake of the conference, the research contained in the Fracture Lines report was determined to be a major factor in the decision to expand the terms of reference for a Parliamentary Committee studying offshore drilling issues in Canada. The Committee opted to include shale gas in its deliberations. The issue of how to protect groundwater resources from the impacts of shale gas exploration continues to be a burning issue, across Canada and around the world.
Topic:
Climate Change, Environment, Oil, Water, and Gas
Political Geography:
Canada and North America

62. Did Easy Money in the Dollar Bloc Fuel the Global Commodity Boom?

Author:
Christopher Erceg, Luca Guerrieri, and Steven B. Kamin
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Among the various explanations for the runup in oil and commodity prices of recent years, one story focuses on the role of monetary policy in the United States and in developing economies. In this view, developing countries that peg their currencies to the dollar were forced to ease their monetary policies after reductions in U.S. interest rates, leading to economic overheating, excess demand for oil and other commodities, and rising commodity prices. We assess that hypothesis using the Federal Reserve staff’s forward-looking, multi- country, dynamic general equilibrium model, SIGMA. We find that even if many developing country currencies were pegged to the dollar, an easing of U.S. monetary policy would lead to only a transitory runup in oil prices. Instead, strong economic growth in many developing economies, as well as shortfalls in oil production, better explain the sustained runup in oil prices observed until earlier this year. Moreover, a closer look at exchange rates and interest rates around the world suggests that the monetary policies of many developing economies, including in East Asia, are less closely influenced by U.S. policies than is frequently assumed.
Topic:
Energy Policy, Oil, Commodities, and Interest Rates
Political Geography:
United States and North America

63. The Environmental State of Canada

Author:
Kenneth P. Green and Ben Eisen
Publication Date:
06-2009
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Canadians have much to celebrate concerning their natural environment. Over the past 30 years, Canada's air and water have become cleaner, ecosystems and timberlands have been preserved, and soils that feed not only Canadians but also many others around the world have been protected. This has happened while Canada's population and economy have grown strongly, which has propelled Canada, a country of only 33 million, to the status of an economic powerhouse with a standard of living that is the envy of much of the world. There is still more that can be done, but Canada is well on the way toward environmental sustainability.
Topic:
Climate Change, Environment, and Oil
Political Geography:
Canada and North America

64. Do Energy Prices Respond to U.S. Macroeconomic News? A Test of the Hypothesis of Predetermined Energy Prices

Author:
Lutz Kilian and Clara Vega
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Models that treat innovations to the price of energy as predetermined with respect to U.S. macroeconomic aggregates are widely used in the literature. For example, it is common to order energy prices first in recursively identified VAR models of the transmission of energy price shocks. Since exactly identifying assumptions are inherently untestable, this approach in practice has required an act of faith in the empirical plausibility of the delay restriction used for identification. An alternative view that would invalidate such models is that energy prices respond instantaneously to macroeconomic news, implying that energy prices should be ordered last in recursively identified VAR models. In this paper, we propose a formal test of the identifying assumption that energy prices are predetermined with respect to U.S. macroeconomic aggregates. Our test is based on regressing cumulative changes in daily energy prices on daily news from U.S. macroeconomic data releases. Using a wide range of macroeconomic news, we find no compelling evidence of feedback at daily or monthly horizons, contradicting the view that energy prices respond instantaneously to macroeconomic news and supporting the use of delay restrictions for identification.
Topic:
Economics, Energy Policy, Oil, and Macroeconomics
Political Geography:
United States and North America