Kenneth B. Medlock

The Relationship between Crude Oil and Natural Gas Prices: The Role of the Exchange Rate

To the extent that energy sources can be substituted in end-uses, one might expect the prices of different fuels to be linked. High prices for one fuel will create incentives to substitute toward other fuels that are relatively less expensive. Consistent with this basic economic prediction, many authors have documented a tendency for the natural logarithm of prices of different energy commodities to be cointegrated.

Natural Gas and Geopolitics: The Baker Institute World Gas Trade Model

This working paper describes a spatial and intertemporal equilibrium model of the world market for natural gas. Specifically, the model calculates a pattern of production, transportation routes and prices to equate demands and supplies while maximizing the present value of producer rents within a competitive framework. Data incorporated into the specifications of supplies and demands in each location are taken from a variety of sources including the United States Geological Survey, the Energy Information Administration, the International Energy Agency, the World Bank and various industry sources. A subsequent working paper uses the model to investigate the possible effects of a number of scenarios including possible political developments.

Exploiting Bolivia's natural gas resources

We analyze the options available for Bolivia with regard to the exploitation of its natural gas resource base. While much of the commercial focus to date has been on developing delivery infrastructure and marketing supply to Brazil and Argentina, other options are available. In particular, producing and selling electricity to its neighbors may be especially attractive since there are also vast untapped hydroelectric resources in Bolivia that could complement such use for its natural gas.

The Future of Liquefied Natural Gas Trade

Previously disconnected regional natural gas markets are becoming increasingly integrated, largely due to liquefied natural gas (LNG) trade. Some factors are accelerating this trend, such as rapid demand growth, climate change policy, a desire to avoid transit country risks associated with pipelines, and seasonality in demand. However, other factors are acting to inhibit global market development, such as geopolitics, market structure, the emergence of unconventional sources of gas supply, and a move to alternative energy. The manner in which these forces act to offset or reinforce each other will be crucial to the nature of global LNG trade in years to come.

Review of Sector and Regional Trends in U.S. Electricity Markets. Focus on Natural Gas. Natural Gas and the Evolving U.S. Power Sector Monograph Series. Number 1 of 3

This study explores dynamics related to natural gas use at the national, sectoral, and regional levels, with an emphasis on the power sector. It relies on a data set from SNL Financial to analyze recent trends in the U.S. power sector at the regional level. The research aims to provide decision and policy makers with objective and credible information, data, and analysis that informs their discussions of a rapidly changing energy system landscape. This study also summarizes regional changes in natural gas demand within the power sector. The transition from coal to natural gas is occurring rapidly along the entire eastern portion of the country, but is relatively stagnant in the central and western regions. This uneven shift is occurring due to differences in fuel price costs, renewable energy targets, infrastructure constraints, historical approach to regulation, and other factors across states.