Essays On U S Energy Markets
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Essays On U S Energy Markets
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Author : David Aaron Brightwell
language : en
Publisher:
Release Date : 2010
Essays On U S Energy Markets written by David Aaron Brightwell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
This dissertation examines three facets of U.S. energy use and policy. First, I examine the Gulf Coast petroleum refining industry to determine the structure of the industry. Using the duality between cost-minimization and production functions, I estimate the demand for labor to determine the underlying production function. The results indicate that refineries have become more capital intensive due to the relative price increase of labor. The industry has consolidated in response to higher labor costs and costs of environmental compliance. Next, I examine oil production in the United States. An empirical model based on the theoretical framework of Pindyck is used to estimate production. This model differs from previous research by using state level data rather than national level data. The results indicate that the production elasticity with respect to reserves and the price elasticity of supply are both inelastic in the long run. The implication of these findings is that policies designed to increase domestic production through subsidies, tax breaks, or royalty reductions will likely provide little additional oil. We simulate production under three scenarios. In the most extreme scenario, prices double between 2005 and 2030 while reserves increase by 50%. Under this scenario, oil production in 2030 is approximately the same as the 2005 level. The third essay estimates demand for fossil fuels in the U.S. and uses these estimates to forecast CO2 emissions. The results indicate that there is almost no substitution from one fossil fuel to another and that all three fossil fuels are inelastic in the long run. Additionally, all three fuels respond differently to changes in GDP. The result of the differing elasticities with respect to GDP is that the energy mix has changed over time. The implication for forecasting CO2 emissions is that models that cannot distinguish changes in the energy mix are not effective in forecasting CO2 emissions.
Energy
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Author : Richard L. Gordon
language : en
Publisher: MIT Press (MA)
Release Date : 1986-11-30
Energy written by Richard L. Gordon and has been published by MIT Press (MA) this book supported file pdf, txt, epub, kindle and other format this book has been release on 1986-11-30 with Business & Economics categories.
Energy: Markets and Regulation is a valuable survey of current thinking on energy economics, focusing on the regulation of energy markets. It covers nearly every aspect of the energy sector, including both international and domestic U.S. markets in oil and coal and the particular U.S. conditions in natural gas and nuclear power. It deals with resource estimation and energy supply and demand, and environmental control. Economic and institutional analysis of current problems includes an exploration of their historical background.The thirteen original contributions are dedicated to MIT economist and energy analyst M. A. Adelman. Adelman is the dean of academic economists concerned with energy markets and the effects of government regulation. All who work and teach in this area have been influenced by his ideas and insightful analysis, and many of the chapters in the book draw on and expand his earlier work.The preface by Charles P. Kindleberger and foreword by the editors outline the subject and introduce the essays. Their authors and topics are Paul R. Carpenter, Henry D. Jacoby, and Arthur W. Wright on the evolution of U.S. natural gas markets; G. Campbell Watkins on the interaction of U.S. and Canadian oil policies; Richard L. Gordon on world coal development; Martin B. Zimmerman on the problem of nuclear power in the United States; Paul W. MacAvoy on the EPA's record in controlling industrial air pollution; Robert W. Crandall and Theodore E. Keeler on public policies concerning the private auto; Philip K. Verleger, Jr. on the evolution of oil as a commodity; Jeffrey K. MacKie-Mason and Robert S. Pindyck on the theory and experience of cartels in the international minerals markets; Paul Leo Eckbo on worldwide petroleum taxation; Zenon S. Zannetos on oil tanker markets; Gordon M. Kaufman on oil and gas supply assessment; Paul G. Bradley on mineral and petroleum exploration; and Ernst R. Berndt and David 0. Wood on the influence of energy price shocks on U.S. productivity growth.Richard L. Gordon is Professor of Mineral Economics, The Pennsylvania State University; Henry D. Jacoby is Professor of Management, MIT; and Martin B. Zimmerman is Associate Professor of Economics, University of Michigan.
Energy Markets And Regulation
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Author : Morris Albert Adelman
language : en
Publisher: Cambridge, Mass. : MIT Press
Release Date : 1987
Energy Markets And Regulation written by Morris Albert Adelman and has been published by Cambridge, Mass. : MIT Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1987 with Energy industries categories.
"Energy: Markets and Regulation" is a valuable survey of current thinking on energy economics, focusing on the regulation of energy markets. It covers nearly every aspect of the energy sector, including both international and domestic U.S. markets in oil and coal and the particular U.S. conditions in natural gas and nuclear power. It deals with resource estimation and energy supply and demand, and environmental control. Economic and institutional analysis of current problems includes an exploration of their historical background.The thirteen original contributions are dedicated to MIT economist and energy analyst M. A. Adelman. Adelman is the dean of academic economists concerned with energy markets and the effects of government regulation. All who work and teach in this area have been influenced by his ideas and insightful analysis, and many of the chapters in the book draw on and expand his earlier work.The preface by Charles P. Kindleberger and foreword by the editors outline the subject and introduce the essays. Their authors and topics are Paul R. Carpenter, Henry D. Jacoby, and Arthur W. Wright on the evolution of U.S. natural gas markets; G. Campbell Watkins on the interaction of U.S. and Canadian oil policies; Richard L. Gordon on world coal development; Martin B. Zimmerman on the problem of nuclear power in the United States; Paul W. MacAvoy on the EPA's record in controlling industrial air pollution; Robert W. Crandall and Theodore E. Keeler on public policies concerning the private auto; Philip K. Verleger, Jr. on the evolution of oil as a commodity; Jeffrey K. MacKie-Mason and Robert S. Pindyck on the theory and experience of cartels in the international minerals markets; Paul Leo Eckbo on worldwide petroleum taxation; Zenon S. Zannetos on oil tanker markets; Gordon M. Kaufman on oil and gas supply assessment; Paul G. Bradley on mineral and petroleum exploration; and Ernst R. Berndt and David 0. Wood on the influence of energy price shocks on U.S. productivity growth.Richard L. Gordon is Professor of Mineral Economics, The Pennsylvania State University; Henry D. Jacoby is Professor of Management, MIT; and Martin B. Zimmerman is Associate Professor of Economics, University of Michigan.
Three Essays On U S Renewable Energy Policies
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Author : Shen Liu
language : en
Publisher:
Release Date : 2016
Three Essays On U S Renewable Energy Policies written by Shen Liu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This study investigates three issues on U.S. renewable energy markets. The primary objective is to describe how U.S. renewable energy policies affect solar photovoltaic (PV) and biodiesel industries. The first essay develops and estimates an analytical framework for assessing the optimal solar energy subsidy, which takes into account the environment, health, employment, and electricity accessibility benefits. Results indicate that an optimal subsidy is positively affected by the marginal external benefit. Calibrating the model, using published elasticities, yields estimates of the optimal solar energy subsidy equaling to approximately $0.02 per kilowatt hour when employment effects are omitted. The estimated optimal subsidy is in line with many current state feed-in-tariff rates, giving support to these initiatives aimed at fostering solar energy production. The second essay examines price volatility spillovers among U.S. crude oil, diesel, biodiesel, and soybeans based on weekly prices from 2007 to 2014. A univariate EGARCH model along with a DCC-MGARCH model are employed. The univariate EGARCH model provides evidence of double-directional price-volatility spillovers between biodiesel and soybean markets and between crude oil and biodiesel markets. Further there exists unidirectional price-volatility spillovers from the crude oil market to the soybean market and from the diesel market to the biodiesel market. The DCC-MGARCH model indicates time-varying conditional correlations among markets and the pairwise conditional correlations fluctuated from 2008 to 2009. The third essay investigates the effect of Poisson type policy jumps on biodiesel investment through the theory of investment under uncertainty. The analysis considers the probability of a policy being implemented if it is not in effect and the probability of it being withdrawn if it is in effect. As an application, the policy switching regime of the discontinuous federal tax credit of $1.00 per gallon on biodiesel is modeled as a Poisson jump process. Results support that time inconsistent government policies do lead to market uncertainty. The analysis reveals a pronounced negative impact on the decisions to invest in a biodiesel refinery.
Three Essays On Empirical Analysis Of United States Electricity Markets
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Author : Suman Gautam
language : en
Publisher:
Release Date : 2014
Three Essays On Empirical Analysis Of United States Electricity Markets written by Suman Gautam and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
In this Dissertation, three independent studies analyze the impact of recent changes in both supply and demand sides of the U.S. electricity sector. Below is a brief description of three essays. I. Coal Plant's Response to Renewable Portfolio StandardsRenewable Portfolio standards require load-serving entities to purchase a given percentage of their electricity sales from eligible renewable energy technologies. This study analyzes the impact of RPS on the coal utilization by coal plants of Pennsylvania, New Jersey, and Maryland (PJM) electricity market. We develop a panel dataset of 259 unique PJM coal-fired utility plants' integrating their fuel purchases with state-level RPS energy mandates, electricity prices, and fuel prices from 2001 to 2011, covering both pre-RPS and post-RPS era. Since selection of RPS policies may be non-random, we employ a two-step Heckit model to control for states' decision to adopt an RPS and choose yearly RPS levels. The results show that a percentage point increase in state's yearly energy target increases the average plant's coal purchase by 45 thousand tons. These results are approximately consistent across selection-corrected models. The analysis showing the positive impact of RPS yearly targets on PJM coal plants' coal purchases suggests a few things. There are fewer coal plants operating at the margin. Moreover, RPS yearly energy targets are fairly low at present; they are scheduled to increase considerably in coming years. Renewable Portfolio Standards may decrease the amount of fuel utilized by coal plants when RPS mandates increase in future. II. Residential Customers Response to Critical Peak Events of Electricity: Green Mountain Power ExperienceDemand response (DR) programs, usually through peak pricing and incentive-based approaches, can encourage customers to reduce or shift consumption during peak periods. This benefits utilities by lowering short-run generation costs and reducing the need for some long-run peak-driven investments. This paper analyzes the impact of Vermont's Green Mountain Power's (GMP) emergency DR programs on residential customers' electricity consumption during a two-year pilot study program in 2012--2013. The 3,735 single-home residents of Central Vermont area were separated into six treatment groups and two control groups resulting into 26 million hourly load observations during the period of the study. Our analysis shows that incentive-based demand response programs have statistically significant impacts on reducing peak load. Specifically, CPR rates reduced peak load usage 6% to 7.7% and CPP rates reduced peak load between 6.8% and 10.3% during critical peak events. Moreover, on average, IHD-equipped participants' monthly energy consumption was 2.0% to 5.3% lower than the monthly energy usage of non-IHD customers. However, none of the CP rate and IHD treatments induced a persistent response across multiple critical events and none of the treatment groups exhibited a consistent response to critical peak events. Based on our evaluation of GMP's DR programs during 2012 and 2013, neither critical peak pricing nor rebates are themselves sufficient to substitute for new capacity to meet resource adequacy requirements.III. Analysis of Load and Price patterns in the U.S. Electricity SectorThe study analyzes hourly electricity loads and marginal costs of electric entities with of extreme value theory (EVT), a concept widely used in the financial sector. For each year's hourly data of balancing authorities and utilities, we fit generalized extreme value (GEV) distribution and estimate the parameters of the distribution with an aim of comparing how these parameters have changed over time and market regions. We also account for the time dependencies, seasonalities, and near-time clustering present in the electricity markets -- both for electricity load and prices -- with the help of autoregressive conditional hetereskedastic models. The results show that the distributions of hourly load and lambda values are fat tailed. Hourly lambda values have more extreme values generating fatter tails than hourly electricity load. We also show that extreme tail quantiles estimated with the GEV parameters at different percentile levels are comparable with the percentiles of actual observations.
Essays On Environmental Policy In Energy Markets
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Author : Judson Paul Boomhower
language : en
Publisher:
Release Date : 2015
Essays On Environmental Policy In Energy Markets written by Judson Paul Boomhower and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Producing and consuming energy involves costly environmental externalities, which are addressed through a wide range of public policy interventions. This dissertation examines three economic questions that are important to environmental regulation in energy. The first chapter measures the effect of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. The second chapter measures additionality in an appliance replacement rebate program. Finally, the third chapter focuses on the environmental impacts of subsidizing electricity production from forest-derived biomass fuels. The first chapter measures the incentive effect of limited liability. When liability is limited by bankruptcy, theory says that firms will take excessive environmental and public health risks. In the long run, this ``judgment-proof problem'' may increase the share of small producers, even when there are economies of scale. I use quasi-experimental variation in liability exposure to measure the effects of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. Using firm-level data on the universe of Texas oil and gas producers, I examine the introduction of an insurance mandate that reduced firms' ability to avoid liability through bankruptcy. The policy was introduced via a quasi-randomized rollout, which allows me to cleanly identify its effects on industry structure. The insurance requirement pushed about 6% of producers out of the market immediately. The exiting firms were primarily small and were more likely to have poor environmental records. Among firms that remained in business, the bond requirement reduced oil production among the smallest 80% of firms by about 4% on average, which is consistent with increased internalization of environmental costs. Production by the largest 20% of firms, which account for the majority of total production, was unaffected. Finally, environmental outcomes, including those related to groundwater contamination, also improved sharply. These results suggest that incomplete internalization of environmental and safety costs due to bankruptcy protection is an important determinant of industry structure and safety effort in hazardous industries, with significant welfare consequences. The second chapter focuses on the importance of a regulator's inability to distinguish between households responding to a subsidy, and households doing what they would also have done in the absence of policy. Economists have long argued that many recipients of energy-efficiency subsidies may be ``non-additional, '' getting paid to do what they would have done anyway. Demonstrating this empirically has been difficult, however, because of endogeneity concerns and other challenges. In this paper we use a regression discontinuity analysis to examine participation in a large-scale residential energy-efficiency program. Comparing behavior just on either side of several eligibility thresholds, we find that program participation increases with larger subsidy amounts, but that most households would have participated even with much lower subsidy amounts. The large fraction of inframarginal participants means that the larger subsidy amounts are almost certainly not cost-effective. Moreover, the results imply that about half of all participants would have adopted the energy-efficient technology even with no subsidy whatsoever. Finally, the third chapter addresses consequences of renewable energy subsidies in other markets. Electricity generated from logging residues provides a large and growing share of US renewable electricity generation. Much of the low-value wood used by biomass power plants might otherwise be left in the field. This increased harvest can negatively affect forest health. I investigate the supply of woody biomass fuel in Maine using a 15-year panel of prices and quantities for whole tree wood chips. I find that doubling the price of woody biomass increases harvest by about 64%. I also find that coal prices are a major determinant of woody biomass harvest. This suggests that environmental policies that raise the price of coal will affect forest health.
Edison To Enron
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Author : Robert L. Bradley, Jr.
language : en
Publisher: John Wiley & Sons
Release Date : 2011-10-24
Edison To Enron written by Robert L. Bradley, Jr. and has been published by John Wiley & Sons this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-10-24 with Political Science categories.
The oil industry in the United States has been the subject of innumerable histories. But books on the development of the natural gas industry and the electricity industry in the U.S. are scarce. Edison to Enron is a readable flowing history of two of America's largest and most colorful industries. It begins with the story of Samuel Insull, a poor boy from England, who started his career as Thomas Edison's right-hand man, then went on his own and became one of America's top industrialists. But when Insull's General Electric's energy empire collapsed during the Great Depression, the hitherto Great Man was denounced and prosecuted and died a pauper. Against that backdrop, the book introduces Ken Lay, a poor boy from Missouri who began his career as an aide to the head of Humble oil, now part of Exxon Mobil. Lay went on to become a Washington bureaucrat and energy regulator and then became the wunderkind of the natural gas industry in the 1980s with Enron. To connect the lives of these two energy giants, Edison to Enron takes the reader through the flamboyant history of the American energy industry, from Texas wildcatters to the great pipeline builders to the Washington wheeler-dealers. From the Reviews... "This scholarly work fills in much missing history about two of America's most important industries, electricity and natural gas." —Joseph A. Pratt, NEH-Cullen Professor of History and Business, University of Houston "... a remarkable book on the political inner workings of the U.S. energy industry." —Robert Peltier, PE, Editor-in-Chief, POWER Magazine "This is a powerful story, brilliantly told." —Forrest McDonald, Historian
The Structure Of Energy Markets
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Author :
language : en
Publisher:
Release Date : 1979
The Structure Of Energy Markets written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1979 with Energy consumption categories.
Essays In Electricity Economics
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Author : Brittany L. Tarufelli
language : en
Publisher:
Release Date : 2019
Essays In Electricity Economics written by Brittany L. Tarufelli and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with Climatic changes categories.
Goods markets are designed and regulated at a sub-global level. Although it’s typical to assume one set of market clearing rules across regulated and unregulated regions, trade occurs across a patchwork of sub-global market designs. Not accounting for this heterogeneity in market design can lead to unanticipated outcomes from sub-global regulations, as correcting for one market failure–such as a negative externality from carbon emissions–can lead to another market failure from the market design itself when trade occurs across differing market designs. The anatomy of this second-best problem is considered in the context of U.S. electricity markets, as market clearing mechanisms vary by region, and they imperfectly overlap with state-level climate policies such as carbon prices and renewables subsidies. In Chapter I, I present a review of the theoretical and empirical literature on electricity market design and its interaction with regional climate policies. In the wholesale electricity sector, market design drives both the extent of the forward contract market and the competitiveness of the spot market, which can induce strategic behavior and affect both market and regional climate policy outcomes. Assessing climate policy outcomes under only the assumption of a centralized market design, as is customary in the literature, belies the complexity of electricity market design, which varies regionally. As there is currently an agenda to link regional electricity markets, there is also a need to study how strategic behavior across differing market designs affects emissions when regional climate policies are imposed. In Chapter II, I develop a two-stage model of oligopolistic electricity production to determine if strategic behavior in forward contract and spot markets across differing electricity market designs increases or decreases emissions leakage from regional climate policies. I find that under uncertainty from demand and renewable resource shocks, centralized market designs generally reduce market power through arbitraging away price risk between forward and spot markets. However, under an asymmetric carbon cap and trade program, resulting emissions leakage is decreased by bilateral markets, which act as a structural backstop to emissions leakage. Emissions leakage increases when bilateral markets trade with, or are integrated with centralized markets, potentially reducing the efficacy of regional climate policies. In Chapter III, I study the interaction between sub-global climate policy and sub-global design of goods markets using an example of market expansion from wholesale electricity markets–the Western Energy Imbalance Market (EIM) in California. Using a difference-in-differences and triple-differences framework with matching to account for self-selection, I investigate how the EIM affects emissions leakage from California’s carbon cap and trade program. I find that the EIM caused a modest increase in emissions leakage into participating regions outside California, despite the relatively small trading volumes. The results have implications for ongoing efforts to expand competitive wholesale electricity markets across regions with differing climate policies. The results of this dissertation are informative for sub-global climate policy when trade in goods markets occurs across regions with different market clearing rules. Specifically, reduced transactions costs in trade between regulated and unregulated regions may tend to exacerbate emissions leakage. These results are informative in the context of continuing changes in wholesale electricity markets, including potential market expansions and continued integration of regional electricity markets across the U.S. and the European Union.
Essays On Energy Economics
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Author : Mohammad Morovati Sharifabadi
language : en
Publisher:
Release Date : 2013
Essays On Energy Economics written by Mohammad Morovati Sharifabadi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
My dissertation consists of three distinct but related chapters on Energy Economics and Finance. My first chapter is an empirical evaluation of market conduct in global crude oil markets. "Hotelling rule" states that even in competitive equilibrium, price of an "exhaustible resource" exceeds its marginal cost due to the opportunity cost of depleting the non-renewable resource. This cost is called "scarcity rent". Oil price exceeds its marginal extraction cost significantly. This can be attributed to two different sources: effect of scarcity of oil on prices or exercising market power by OPEC (collusion). In this paper, I use Porter (1983) approach considering the possibility of "scarcity rent" component involved in the gap between price and marginal extraction cost in the oil market. The novelty of my approach is to empirically estimate scarcity rent using data on cost of production of oil. Two benchmark cases, where scarcity rent is either zero (non-exhaustible resources hypothesis (Adelman 1990)) or equal to minimum price-cost margin are considered. The results show that in both cases OPEC failed to cooperate effectively and in second case, market conduct estimated is closer to Cournot behavior. In the second chapter of my dissertation, we employ a real options approach to evaluate oil and gas companies' investment decisions in an empirical setup. We develop a theoretical model to derive testable predictions. A unique measure of investment costs is obtained from energy industry data vendors. This novel dataset contains details of contract terms and pricing for offshore drilling equipment, which constitute the major share of investment costs in offshore oil field development. The investment database is combined with financial and macroeconomic data, which enables us to perform a panel data analysis of investments' response to variations in investment costs and market variables such as the slope of futures curve, firms' past earnings, cost of capital and implied oil price volatility. Our results show that the larger firms, facing less financial friction, are more forward looking while the smaller firms, who have less access to capital markets, are more dependent on their past earnings. The third chapter of my dissertation is about the effect of recent natural gas production boom on U.S. manufacturing. Natural gas production in North America has increased significantly over the past decade causing the prices to plunge during past 5 years. The purpose of this research is to investigate the effect of low natural gas prices on energy intensive U.S. manufacturing industries using market data. I empirically evaluate the stock market reactions of publicly traded companies in energy intensive industries to arrival of new information about the unexpected price shocks in natural gas futures markets. My results show that the stock market does not react significantly to innovations in the expected price of natural gas, proxied for by monthly changes in natural gas futures contracts with a fixed maturity date. I then split the sample into two groups based on their expenditure on natural gas as a ratio of their total production value. The stock market valuation of companies in high "natural gas intensity" industries were positively affected by unexpected downward shocks in natural gas prices and the results are significant.