JJC_H1_Economics_QP

JURONG JUNIOR COLLEGE PRELIMINARY EXAMINATION 2014 ECONOMICS Higher 1 8819/01 1 September 2014 3 hours READ THESE INSTRUCTIONS FIRST Write your name and class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Section A Answer all questions. Section B Answer one question. Start each question on a new piece of paper. Fill in the necessary information on the cover sheet. At the end of the examination, fasten all your work securely with the cover sheet at the top. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages. [Turn Over

2     Section A Answer all questions in this section Question 1 Use of Shale Gas in UK and Environmental Issue Extract 1: Global market is pushing up gas prices UK energy bills are set to go up by 2020 as the country becomes more dependent on imported gas, says energy regulator Office of Gas and Electricity Markets (Ofgem). In 2009, 45% of the natural gas used in the UK was imported, and this figure is expected to reach 69% by 2019. This growing dependence on imports makes it vulnerable to shifts in supply and demand, as well as shocks in supply countries. The recent power outage at a Norwegian gas plant was the main reason for the price jump, further exacerbated by a leaking crude oil pipeline in Scotland blocking the supply of natural gas from fields further up the production chain. According to Ofgem, while UK needs more gas, world demand for gas is set to rise while domestic supplies are predicted to fall by another 28% by 2020. Asia is set to become the fastest-growing gas consumer. China's consumption alone will grow at 20 per cent per year as the country experience rising GDP growth. So without measures to reduce dependence on imported gas, higher prices are inevitable. Clare McNeil, PPR's senior research fellow tells Carbon Brief that exposure to volatile international energy prices would be a real problem for consumers, particularly households on low incomes who cannot afford the extra costs. Between 2011 and 2012, domestic gas bill has increased by 11.8% when the price of gas rose by 13.1%. S o u r c e : The Carbon Brief, 19 February 2012 Extract 2: Carbon pollution Experts from three climate bodies conclude there are sound reasons to burn natural gas instead of coal in the country's power stations in the s hort term. The reason is that gas-powered plants emit less than half the carbon dioxide per kilowatt hour of