There is typically a high degree of flexibility associated with the production of alternative fuels due to the ability to source from different input raw materials or to produce different output products based on market conditions. In this paper, we consider the particular example of ethanol and...

One of the key parameters in modeling capital budgeting decisions for investments with embedded options is the project volatility. Most often, however, there is no market or historical data available to provide an accurate estimate for this parameter. A common approach to estimating the project...

Stochastic process models of commodity prices are important inputs in energy investment evaluation and planning problems. In this paper, we focus on modeling and forecasting the long-term price level, since it is the dominant factor in many such applications. To provide a foundation for our...