headerpos: 9513
 
 
  Oil Shale

ISSN 1736-7492 (electronic)  ISSN 0208-189X (print)
Published since 1984

Oil Shale

ISSN 1736-7492 (electronic)  ISSN 0208-189X (print)
Published since 1984

Publisher
Journal Information
» Editorial Policy
» Editorial Board
Extra
Guidelines for Authors
» For Authors
» Instructions to Authors
» Copyright Transfer Form
Guidelines for Reviewers
» For Reviewers
» Review Form
Subscription Information
Support & Contact
List of Issues
» 2019
» 2018
» 2017
Vol. 34, Issue 4
Vol. 34, Issue 3
Vol. 34, Issue 2
Vol. 34, Issue 1
» 2016
» 2015
» 2014
» 2013
» 2012
» 2011
» 2010
» 2009
» 2008
» Back Issues
» Back issues (full texts)
  in Google
Publisher
» Other journals
» Staff

EFFECT OF INNOVATION IN UNCONVENTIONAL OIL INDUSTRY: CASE OF ESTONIA AND CANADA; pp. 279–294

(Full article in PDF format) https://doi.org/10.3176/oil.2017.3.06


Authors

KALEV KALLEMETS, TÕNIS TÄNAV

Abstract

The objective of this paper is to compare the economic effects of innovation in an unconventional oil industry, based on Estonian and Canadian experiences with oil shale and oil sands, respectively. Both unconventional oil resources face similar challenges and need to resolve these through innovation. Based on empirical evidence, this paper concludes that innovation is a key mechanism of increasing efficiencies and triggering investments. Investments themselves, due to their nature, represent the best measure of the economic effect of cumulative innovation in the unconven­tional hydrocarbons industry.
   The paper proceeds in the following manner. First, we will briefly review the relevant literature and identify definitions of innovation and its impact on economic growth. In the second part, we will point out the effects of innovation in the energy industry on economic growth, and the uniqueness of energy innovation. Then we will present data on public and private R&D expenditure in the oil sands industry in Canada, as well as evidence of the results and economic effect comparatively to the R&D effort in Estonian oil shale industry. Lastly, we will draw conclusions by discussing our findings. The results are relevant to indicate R&D expenditure necessary to sustain investments and economic effects of developing unconventional hydrocarbon mineral resources.

Keywords

unconventional oil industry, national energy policy, industrial policy, innovation policy.

References

1.      Bilbao-Osorio , B. , Rodriguez-Pose , A. From R&D to innovation and economic growth in the EU. Growth Change , 2004 , 35(4) , 434–455.
https://doi.org/10.1111/j.1468-2257.2004.00256.x

2.      European Council Conclusions 17 June 2010. EUCO , 13/10 , Brussels , 2010.

3.      Romer , P. M. Endogenous technological change. J. Polit. Econ. , 1990 , 98(5) , 71–102.
https://doi.org/10.1086/261725

4.      Aghion , P. , Howitt , P. A model of growth through creative destruction. Econo­metrica , 1992 , 60(2) , 323–351.

5.      Fagerberg , J. A technology gap approach to why growth areas differ. Res. Policy , 1987 , 16(2–4) , 87–99.
https://doi.org/10.1016/0048-7333(87)90025-4

6.      Fagerberg , J. , Verspagen , B. Technology-gaps , innovation-diffusion and trans­formation: an evolutionary interpretation. Res. Policy , 2002 , 31(8–9) , 1291–1304.
https://doi.org/10.1016/S0048-7333(02)00064-1

7.      Edison , H. , bin Ali , N. , Torkar , R. Towards innovation measurement in the software industry. J. Syst. Software , 2013 , 86(5) , 1390–1407.
https://doi.org/10.1016/j.jss.2013.01.013

8.      Schumpeter , J. A. The Theory of Economic Development. Transaction Publishers , 2008. First print: Harvard University Publishing , 1934.

9.      OECD. The Measurement of Scientific and Technological Activities. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data. OECD Publishing , 2005.

10. National Systems of Innovation: Toward a Theory of Innovation and Interactive Learning (Lundvall , B.-A. , ed.). Pinter Publishers , London , 1992.

11. National Innovation Systems. A Comparative Analysis (Nelson , R. R. , ed.). Oxford University Press , 1993.

12. Kuhlmann , S. , Arnold , E. RCN in the Norwegian Research and Innovation System. Background report No. 12 in the evaluation of the Research Council of Norway , 2001 , 43 p.

13. Cassiman , B. , Veugelers , R. In search of complementarity in innovation strategy: internal R&D and external knowledge acquisition. Manage. Sci. , 2006 , 52(1) , 68–82.
https://doi.org/10.1287/mnsc.1050.0470

14. Caracostas , P. The policy-shaper’s anxiety at the innovation kick: how far do innovation theories really help in the world of policy? In: Perspectives on Innova­tion (Malerba , F. , Brusoni , S. , eds.). Cambridge University Press , Cam­bridge , UK , 2007 , 464–490.
https://doi.org/10.1017/CBO9780511618390.026

15. Arrow , K. J. The economic implications of learning by doing. Rev. Econ. Stud. , 1962 , 29(3) , 155–173.
https://doi.org/10.2307/2295952

16. Nelson , R. R. The simple economics of basic scientific research. J. Polit. Econ. , 1959 , 67(3) , 297–306.
https://doi.org/10.1086/258177

17. Bush , V. Science the Endless Frontier. A Report to the President by Vannevar Bush , Director of the Office of Scientific Research and Development , July 1945. https://www.nsf.gov/od/lpa/nsf50/vbush1945.htm

18. Griliches , Z. The search for R&D spillovers. Scand. J. Econ. , 1992 , 94 Supple­ment , S29–S47.

19. Hall , B. H. The private and social returns to research and development. In: Technology , R&D , and the Economy (Smith , B. L. R. , Barfield , C. E. , eds.). Brookings Institution Press , Washington , D. C. , 1996 , 140–183.

20. Hall , B. H. , Mairesse , J. , Mohnen , P. Measuring the Returns to R&D. NBER Working Paper No. 15622 , 2009 , 47 p.

21. Parsons , M. , Phillips , N. An Evaluation of the Federal Tax Credit for Scientific Research and Experimental Development. Canada Department of Finance , Work­ing Paper 2007–08 , 2007 , 83 p.

22. Kline , S. J. , Rosenberg , N. An overview of innovation. In: The Positive Sum Strategy: Harnessing Technology for Economic Growth (Landau , R. , Rosen­berg , N. , eds.). National Academy Press , Washington , D. C. , 1986 , 275–305.

23. Yergin , D. The Quest: Energy , Security , and the Remaking of Modern World. The Penguin Press , New York , 2011.

24. Sagar , A. D. , van der Zwaan , B. Technological innovation in the energy sector: R&D , deployment , and learning-by-doing. Energ. Policy , 2006 , 34(17) , 2601–2608.
https://doi.org/10.1016/j.enpol.2005.04.012

25. Bettencourt , L. M. A. , Trancik , J. E. , Kaur , J. Determinants of the pace of global innovation in energy technologies. PLOS One , 2013 , 8(10): e67864.
https://doi.org/10.1371/journal.pone.0067864

26. International Energy Agency. Medium-Term Oil Market Report 2016. http://www.iea.org/bookshop/718-Medium-Term_Oil_Market_Report_2016

27. Margolis , R. M. , Kammen , D. M. Evidence of under-investment in energy R&D in the United States and the impact of Federal policy. Energ. Policy , 1999 , 27(10) , 575–584.
https://doi.org/10.1016/S0301-4215(99)00053-1

28. Margolis , R. M. , Kammen , D. M. Underinvestment: The energy technology and R&D policy challenge. Science , 1999 , 285(5428) , 690–692.
https://doi.org/10.1126/science.285.5428.690

29. Deutch , J. , Schlesinger , J. R. National Security Consequences of U.S. Oil Dependency. Council on Foreign Relation. Independent Task Force Report No. 58 , 2006. http://www.cfr.org/content/publications/attachments/EnergyTFR.pdf

30. Schuelke-Leech , B.-A. Volatility in federal funding of energy R&D. Energ. Policy , 2014 , 67(C) , 943–950.
https://doi.org/10.1016/j.enpol.2013.12.057

31. Catalyzing American Ingenuity: The Role of Government in Energy Innovation. American Energy Innovation Council , 2011. http://www.americanenergyinnovation.org/wp-content/uploads/2012/04/AEIC_Catalyzing_ Ingenuity_2011.pdf

32. Alberta Oil Sands Industry. Quarterly Update. Winter 2016. http://www.albertacanada.com/files/albertacanada/AOSID_QuarterlyUpdate_Winter2016. pdf

33. Deutsch , C. V. , McLennan , J. A. Guide to SAGD (Steam Assisted Gravity Drainage) Reservoir Characterization Using Geostatistics. Centre for Com­puta­tional Geostatistics , Guidebook Series , Vol. 3 , 2005. http://www.oilsandsinformation.files.wordpress.com/2011/01/guide-to... Retrieved 3 Feb­ruary 2015.

34. Four questions about Canadian oil and gas innovation with Duke du Plessis. JWN Energy Aug. 19 , 2016. http://www.jwnenergy.com/article/2016/8/four-questions-about-canadian-oil-and-gas-innovation-duke-du-plessis/

35. Alberta Innovates – Energy and Environment Solutions. Annual Report , 2015. http://www.ai-ees.ca/wp-content/uploads/2016/03/2015_report_on_outcomes. pdf

36. The National Partial Upgrading Program (NPUP): Partial Upgrading Back­ground Review. White Paper , June 2016. http://www.ai-ees.ca/wp-content/uploads/2016/03/AIEES-NPUP-White-Paper-ROI-final-for-public-distribution-june-8-2016.pdf

37. The 29th Legislature First Session. Standing Committee on Alberta’s Economic Future. Wednesday , November 18 , 2015 , Transcript No. 29-1-7. http://www.assembly.ab.ca/ISYS/LADDAR_files/docs/committees/ef/legislature_29/session_ 1/20151118_0900_01_ef.pdf#page=10

38. Sustainable Development Technology Canada (SDTC). 2015 SDTC Annual Report. Supplement to the 2015 SDTC Annual Report. https://www.sdtc.ca/en/about-sdtc/reports

39. Institute for Oil Sands Innovation at the University of Alberta. http://www.iosi.ualberta.ca/Resources/Completed%20Projects.aspx

40. Cosia. 2015 Performance Update: Project Highlights. http://www.cosia.ca/uploads/files/performance-goals/COSIA-2105-Performance-Update-Project-Highlights.pdf

41. Findlay , J. P. The Future of the Canadian Oil Sands. The Oxford Institute for Energy Studies , 2016. https://www.oxfordenergy.org/wpcms/wp-content/ uploads/2016/02/The-Future-of-the-Canadian-Oil-Sands-WPM-64.pdf

42. Birn , B. , Forrest , J. , Bonakdarpour , M. , Solcan , M. Oil Sands Economic Bene­fits: Today and in the Future. IHS CERA , February 2014.

43. Conference Board Canada. 2012. Fuel for Thought: The Economic Benefits of Oil Sands Investment for Canada’s Regions. https://www.albertacanada.com/files/albertacanada/AIS_FuelforThought.pdf

44. OECD Stat. Government Budget Appropriations or Outlays for RD. http://stats.oecd.org/Index.aspx?DataSetCode=GBAORD_NABS2007

45. Energy Policies of IEA Countries - Canada 2015. Review. OECD/IEA , 2016. https://www.iea.org/publications/freepublications/publication/EnergyPoliciesofIEACountriesCanada2015Review.pdf

46. Praxis. Oil Shale Industry Impact on Demographic Developments until the Year 2030. Praxis , 2014 (in Estonian). http://www.praxis.ee/wp-content/uploads/2014/09/P%C3%B5levkivit%C3%B6%C3%B6stus-ja-demograafia.pdf

47. The Yearbook of the Estonian Oil Shale Industry 2014 (in Estonian). http:// www.vkg.ee/cms-data/upload/sise-uudised/eesti-polevkivitoostuse-aastaraamat-2014.pdf

48. Mid-Term Energy Technology Development Program. ÅF-Consulting AS , 2012 (in Estonian). https://www.mkm.ee/sites/default/files/inno_energia_2012_pdf.

49. IEA. Estonia 2013. Energy Policies Beyond IEA Countries. OECD/IEA , 2013. http://www.iea.org/publications/freepublications/publication/Estonia2013_free.pdf

50. European Commission. A Study on R&D Tax Incentives. Final Report. CPB Netherlands Bureau for Economic Policy Analysis (Consortium leader) , The Hague , 28 November 2014. https://ec.europa.eu/futurium/en/ system/files/ged/ 28-taxud-study_on_rnd_tax_incentives_-_2014.pdf

51. Estonian Entrepreneurship Growth Strategy 2014–2020. Ministry of Economic Affairs and Communications , October , 2013 (in Estonian). https://valitsus.ee/sites/default/files/content-editors/arengukavad/eesti_ettevotluse_kasvustrateegia _2020.pdf

52. Eesti Statistika Aastaraamat 2016. Statistical Yearbook of Estonia. Statistics Estonia , Tallinn , 2016.

53. IEA Energy Technology RD&D Budgets (2015 edition). OECD/IEA , 2011. http://www.iea.org/statistics/RDDonlinedataservice/

54. Siirde , A. Assessment of the Impact of Realisation of Different Production Scenarios , 2014 (in Estonian). https://energiatalgud.ee/img_auth.php/4/40/Siirde ,_A._P%C3%B5levkivi%C3%B5li_tootmise_erinevate_stsenaariumide_ realiseerimisega_kaasneva_m%C3%B5jude_hindamine.pdf

55. http://www.statcan.gc.ca/pub/88-202-x/2015000/t072-eng.htm

56. http://www.energy.alberta.ca/oilsands/791.asp

57. https://www.albertacanada.com/files/albertacanada/SP-EH_highlightsABEconomyPresentation.pdf

58. Konist , A. Study on Options to Utilize Oil Shale Pyrolysis Gases , 2014 (in Estonian). http://www.energiatalgud.ee/img_auth.php/4/4f/Konist ,_A._P%C3%B5levkivi%C3%B5li_tootmisel_tekkiva_uttegaasi_kasutusv%C3%B5imaluste_uuring.pdf

Interview with VKG Development Director Meelis Eldermann , 21.09.2016 (in Estonian)

 

 
Back

Current Issue: Vol. 36, Issue 3, 2019




Publishing schedule:
No. 1: 20 March
No. 2: 20 June
No. 3: 20 September
No. 4: 20 December