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This paper brings a discussion on the current state-of-the-art in criticality assessment in an international context. It analyzes the status of resource criticality concepts and their calculation methods. The current practice often exhibits a common two-axis assessment framework but the way the two axes are further operationalized shows heterogeneous approaches. Apart from the two-axis as key element of criticality assessment, the scope of the materials, the role of substitution, the delineation of the supply chain and data, and indicator selection are addressed as key elements. The abovementioned criticality assessment practice is approached in function of the upcoming international debate on criticality. The paper tackles the role of criticality assessment in the context of the sustainability assessment toolbox and it proposes a clear distinction between criticality assessment and resilience to criticality. The insights offered in the paper may feed the international discussion in the identification of elements that may be harmonized and elements that may be better left open in function of the particular application.

The mutual gains from international cooperation in responding to an oil supply disruption are substantial, and the IEA has an important part to play in reaping these gains. However, both the thrust of the current IEA Agreement and ambiguities concerning key provisions limit its capacity to attain successful cooperation. To better achieve this goal, the primary focus of the Agreement should be shifted from targeted embargoes and burden-sharing to coordinated, market-oriented responses involving import demand restraint and stockpiling. The paper also emphasizes the role of the IEA in promoting an environment conductive to cooperation through harmonizing members' interests and expectations. 16 references, 2 tables.

The number and frequency of oil-supply disruptions has increased since the end of World War II. Because there are many sources of disruption, the probability in any year is high. We can plan ahead to avoid a crisis by stockpiling oil and letting prices determine allocations. Import tariffs will force producing nations to bear part of the burden and to generate revenues to help pay for the Strategic Petroleum Reserve. 11 references. (DCK)

The Office of Strategic and International Minerals of the Minerals Management Service, U.S. Department of the Interior, has been established to develop a leasing program for nonenergy minerals in the Outer Continental Shelf/ Exclusive Economic Zone (OCS/EEZ) of the United States. The OCS/EEZ nonenergy minerals leasing program is an important element of the Administration's national strategic and critical minerals policy to decrease America's vulnerability to mineral supply disruptions and political pressures from other nations possessing those resources. This paper discusses the heavy and growing dependence of the U.S. on mineral imports, describes the major Executive actions that have been taken to support development of the nonenergy minerals leasing program, briefly reviews the status of global marine mining operations, and discusses the goals and status of the OCS/EEZ leasing program.

Written almost a decade after the first attempts in 1974 to develop a theory of policy response to supply shocks, this paper uses a simple algebraic framework to summarize the central issues posed by supply shocks for macroeconomic policy. Primary emphasis goes to the case for and against monetary accommodation, on the nature and extent of wage indexation, and on the distinction between permanent and transitory shocks. Given the difficult tradeoffs faced by monetary policy makers, supply-side alternatives may represent the best available policy options. 20 references.

Raw materials have long been a critical ingredient of the power and welfare of nations; the search for access to such materials has consequently shaped foreign policies and produced military confrontation and war throughout history. One early example of this has been reported by Arnold Toynbee: the characteristic monuments of the twentieth dynasty of the Egyptian Middle Kingdom (2052–2070 BC) were not pyramids, but fortresses. Sesostris III (1878–1843 BC) set up a chain of eight fortresses south of the second cataract of the Nile. Their purpose was to secure access to a strategically vital piece of territory: the Nubian gold-mines.18

If energy fuels are the muscles of an economy, non-fuel minerals are the bones: they provide the materials for modern industrial production. By far the most important role in this respect is played by steel. World production of steel was about 717mt in 1980. By comparison, world production of aluminium, the next most important bulk metal, with its 16mt was dwarfed. Iron ore, the principal raw material for steel production, consequently accounts for the bulk of world non-fuel mineral production. In 1980, the total amount of iron ore mined was almost exactly 900mt, with an iron-ore content ranging from 25 per cent to 64 per cent, depending on the individual producing country’s situation. The value of world iron ore production in 1980 was about $23.5bn.1

Abstract This paper examines Canada's role as an industrialized energy-intensive consuming nation in the western world. It focuses on Canada's attitude toward the restricted utilization of its petroleum resources, petroleum being the country's main single source of energy. It examines the political wisdom and the corporate and national economics of Canada's "buy cheap and sell high" oil import/export policy and it attempts to solve, in at least a semi-quantitative way. the "risk/payoff/loss" equation of the international oil poker table at which Canada is but a four- percenter. In attempting to grapple with this complex subject, the paper first reviews Canada's role as a special member of the Organization for Economic Co-operation and Development (DECO) and the objectives of the OECD which unite the industrial nations of the western world. It then specifically considers:the pattern of energy demand and supply in the OECD community and the international petroleum trade which results from these interrelations;the results of previous supply disruptions in the unstable, but oil-rich, OPEC block which feeds the DEOD nations with oil, and the impact of such disruptions on Canada;the possibility, nature and magnitude of future oil supply disruptions, the resultant scenario, and the impact that they would have on Canada in both physical and economic terms having regard to existing and potential back-up sources of oil supplies. Finally, the paper attempts to quantify the real cost/ price economics of international integrated producer/ refiners operating in Eastern Canada, for the purpose of determining the profit incentive driving such companies to maintain the status-quo; it also provides the basis of a fundamental benefit/cost study of Canada's oil import policy, without which scrutiny of the "N.O.P." becomes an entirely qualitative exercise (to be presented in Part II). The paper suggests that the security of Canada's imported oil supplies is diminishing with time due to the current near capacity situation of the aging U.S. and Venezuelan oil industries. It also develops as a basic theme Canada's obligations to the OECD community and the premise of sharing remaining supplies among the energy-hungry DECD countries in times of oil supply disruptions. Because of this concept, the paper notes that a supply disruption amounting to some 20 per cent of OECD demand would be magnified to have double that effect on Eastern Canada. The paper concludes that Canada is pursuing a policy on oil imports which both jeopardizes the economic security of Eastern Canadians, through exposing them to a growing uninsured oil supply risk and runs against the public interest of Canadians as a whole from a national cost/benefit point of view. The authors recommend that Canada should take a much closer and more sophisticated look at the changing situation in, view of their preliminary findings. They also suggest that a connection to domestic sources of supply could provide coverage of the security risk noted.

In this paper, we study the multi-attribute multi-unit procurement mechanism design problem facing a set of potential suppliers who suffer from disruption risks. Each supplier's production cost depends on its disruption probability, and both are private information. We propose a Vickery-Clark-Groves auction with disruption risk (VCG-DR) for this problem and show that the mechanism is incentive-compatible, individual-rational and social efficient. Moreover, we compare the performance of the proposed mechanism and the popular single-attribute multi-unit forward auction (SA-MFV) with reserved attribute by numerical experiments. The results show that VCG-DR outperforms SA-MFV in both social efficiency and optimality.

From resilience perspective, it is important for supply chains to have multiple suppliers in order to maintain a high level of operational performance. On the contrary, keeping multiple suppliers are expensive from purchasing perspective, because, large amount of internal resources are required to maintain numerous suppliers. Moreover, some products may only have a sole source of supply. Against the backdrop, it is important for supply chains to understand, how, different products and supplier compositions affect different resilience capabilities. Hence, drawing from the literature of supply chain resilience, first, conceptual linkages among product criticality, supplier criticality and resilience capabilities are derived. Second, data from four plants of a global manufacturing organization with different supplier and product compositions are collected. Finally, hypothesized relationships are tested by using parametric statistical tests. The empirical data indicate that product and supplier criticality affect different capabilities of supply chain resilience. Theoretical contribution of this research is the conceptual model that is derived from synthesizing the existing literature of supply chain resilience. Practical contribution is the enhanced understanding of the effects of product and supply criticality on different resilience capabilities.

Although supply disruption is ubiquitous because of natural or man-made disasters, many firms still use the price-only reverse auction (only the cost is considered) to make purchase decisions. We first study the suppliers’ equilibrium bidding strategies and the buyer’s expected revenue under the first- and second-price price-only reverse auctions when the suppliers are unreliable and have private information on their costs and disruption probabilities. We show that the two auctions are equivalent and not efficient. Then we propose two easily implementable reverse auctions, namely the first-price and second-price format announced penalty reverse auction (APRA), and show that the “revenue equivalence principle” holds, i.e., the two auctions generate the same ex ante expected profit to the buyer. We further show that the two reverse auctions are efficient and “truth telling” is the suppliers’ dominant strategy in the second-price format APRA. We conduct numerical studies to assess the impacts of some parameters on the bidding strategies, the buyer’s profit and social profit.

This is an analysis of the major strategic minerals (sometimes called strategic materials), including some of the precious metals, which are vital to the Western economies. It focuses primarily on Soviet strategic minerals policies and examines the conflicting hypotheses for and against a resource war waged by the Soviet Union. The conclusions reached on the strength of the evidence so far is that Soviet policies have been chiefly economic and motivated by economic self-interest ; the Soviet Union is seen as an eager competitor for markets to acquire hard currency and not as a power eager to deprive the West of critical resources. A case is also made for the increasing importance of materials science, ocean mining and substitution, which is likely to make the West, including the USSR, invulnerable to supply disruptions in the future.

Certain non-energy materials have been identified as being critical to the manufacturing sector and wider economy due to having a high risk of supply disruption combined with high economic importan...

Applying a neoclassical-econometric model of production activity, the authors analyze US industrial demand for mineral inputs in response to the General Accounting Office's vulnerability index, which ranks minerals on the criterion of economic importance to the US economy. They simulate various supply disruptions to see how the model substitutes available inputs and then reduces output as materials balance constraints become binding. Focusing on titanium, vanadium, cobalt, columbrium, and cadmium, the model suggests that the potential vulnerability of the US economy to severe mineral supply disruptions is high, but that substitution has a strong mitigating effect when disruptions do not exceed 35% of current consumption levels. This implies that the index of mineral importance grows as the severity of disruptions increases and that the magnitude of potential US vulnerability is discontinuous. 32 references, 1 figure, 4 tables.

This paper considers pricing and depletion of an exhaustible nonrenewable resource in an economy wherein domestic consumption is provided for by supplementing extraction from the economy's own resource stock with imports, the future supply of which is not assured. The socially optimal response to threat of trade disruption is a more-conservationist depletion program for the domestic resource stock than would be called for, if import supplies were assured to persist. Competitive domestic firms adopt the socially optimal conversationist program. However, firms anticipating domestic market power after the disruption of import supplies are revealed to overextract the domestic resource stock. 33 references, 2 figures.