The fast growth of the oil price is increasingly seen as a structural element rather than a short-term phenomenon. Expanding oil supply is becoming more and more problematic and, even assuming the availability of new resources, their exploitation requires massive investments. On the other side, oil demand is significantly growing in countries like China and India. Given their size and their current level of consumption and economic activity, such countries could easily sustain oil demand for a long future. A pressure is exerted on both on the supply and on the demand side and, therefore, on oil price. The HOP! research project has been co-funded by the European Commission DG Research to provide quantitative and qualitative analysis of direct and indirect impacts on the European economy of long term oil price escalation. The study has been undertaken by three partners, with TRT Trasporti e Territorio (Italy) taking the lead and collaborating with Fraunhofer Institute Systems and Innovation research (Germany) and the Institute for Prospective Technological Studies of the European Commission Joint Research Centre (Spain). Impacts of high oil prices can be separated into direct effects on the energy system and the transport system as well as indirect effects on the overall economic system. Of course, changes taking place in one system also affect the other systems . For instance, if alternative transport fuels enter the market to a large extent, the composition of the vehicle fleet and the transport costs of different transport modes will be affected. As a consequence, the increase of transport costs has an impact on the production costs and, hence, on GDP. Changes in GDP, investments and trade volumes would then change energy and transport demand . Given the numerous direct and indirect impacts of high oil prices and their linkages, the final result of an oil price peak can hardly be predicted on a qualitative basis and is likely to change over time. For this reason, in HOP! an analytical toolbox consisting of the two interconnected models ¿ POLES (in an adapted version for the HOP! project including the Biofuels model BioPOL) and ASTRA ¿ is applied to simulate the effects of various scenarios assuming high oil prices, taking into account various feedback loops and the dynamics of impacts. The time horizon of the simulations ends in 2050, the assessment being focused on the EU.

FIORELLO Davide;  MARTINO Angelo;  FERMI Francesca;  SCHADE Burkhard;  WIESENTHAL Tobias;  SCHADE Wolfgang; 

2009-12-17

Association for European Transport

JRC47651

http://www.etcproceedings.org/,    https://publications.jrc.ec.europa.eu/repository/handle/JRC47651,