We construct two simple examples that help to clarify the role of a key assumption in the analysis of price or quantity controls of greenhouse gases in the presence of uncertain costs. Traditionally much has been made of the fact that greenhouse gases are a stock pollutant, and that therefore...

Several recent studies establish that crude oil and natural gas prices are cointegrated, so that changes in the price of oil appear to translate into changes in the price of natural gas. Yet at times in the past, and very powerfully in the last two years, many voices have noted that the two...

We develop a model of the dynamic structure of capacity factor risk. It incorporates the risk that the capacity factor may vary widely from year-to-year, and also the risk that the reactor may be permanently shutdown prior to the end of its anticipated useful life. We then fit the parameters of...

Oil prices are very volatile. But much of this volatility seems to reflect short-term, transitory factors that may have little or no influence on the price in the long run. Many major investment decisions should be guided by a model of the long-term price of oil and its dynamics. Data on futures...

This is a speech given to the National Press Club, September 26, 2008 outlining the need for comprehensive reform of the electric power sector in the U.S. It outlines the centrality of the electricity sector to the economy and to any national energy and climate policies. The U.S. electric power...

This paper provides an overview of the current status of development of the Canadian oil sands industry, and considers possible paths of further development. We outline the key technology alternatives, critical resource inputs and environmental challenges and stgrategic options both at the...

Constellation Energy has been a leading performer in the merchant power business since 2001. In addition to its legacy utility, Baltimore Gas and Electric, Constellation is a merchant generator and a wholesale power marketer serving the load of utilities as well as industrial, commercial and...

The study is motivated by the question “what is the optimal tariff design?” While we do not offer an answer to this question, we use the different designs in four select countries to illuminate the issues involved in designing electricity network tariffs. Electricity networks are a resource...

This paper addresses the question of whether the oil price spike of 2003-2008 was a bubble. We document and discuss what is known about the level of speculation in the paper oil market. We then analyze the dynamics of the term structure of futures prices, both during the earlier period of...

We analyze the levelized cost of electricity (LCOE) for three different fuel cycles: a Once-Through Cycle, in which the spent fuel is sent for disposal after one use in a reactor, a Twice-Through Cycle, in which the spent fuel is recycled for a second use in a light water reactor after which the...