Impact of a new pipeline project on the oil and gas industry in Newfoundland: An analysis of the supply and demand dynamics

Client : Collaborative Applied Research in Economics, Memorial University of Newfoundland

Period : 2014–2015

Description : This project aimed to analyze the interactions between oil’s demand and supply from global, Canadian and Newfoundland markets. The outcomes give a good picture of the potential replicability of the modelling framework in analyzing such complex supply-demand dynamics on oil prices and production. The original approach combines three complementary models:

1- A forecasting model for reserves and oil production profiles working on a project basis,
2- The NATEM optimization model to study the relationship between oil prices/production between Canada’s East and West coasts, the dynamics between crude oil and refined products on the East Coast and to evaluate the cost of various pipeline capacity limits,
3- The macroeconomic NALEM model to connect macro-economic growth with the demand for offshore crude oil and to explain the impact of variations in oil prices on Newfoundland and Labrador’s GDP.