Vol. 24, No. 2 (May 2016)
USAEE Dialogue is the official on-line newsletter of the United States Association for Energy Economics. Its mission is to communicate non-partisan information about recent research, analyses and case studies on issues of energy economics of general interest to its members. USAEE Dialogue is also a forum for reports of local USAEE Chapter and other USAEE/IAEE-sanctioned activities. USAEE members in all sectors of the energy economics’ community -- academia, including students; business/consulting; and government -- are invited to contribute articles for publication. For further information please consult: "Guidelines for Submissions of Articles" at: http://www.usaee.org/pdf/blog/Dialogue_Article_Submission_Guidelines.pdf.
Comments and suggestions for the improvement of USAEE Dialogue are always welcome and may be addressed to the Editor at: firstname.lastname@example.org.
From the President, USAEE
James L. SmithCary M. Maguire Chair in Oil and Gas ManagementEdwin L. Cox School of Business Southern Methodist University Dallas, TXjsmith@mail.cox.smu.edu
Spring has arrived, at least for most of us. With the change in season come several predictable adjustments to the energy economy. Gasoline consumption will pick up as U.S. motorists have more time and feel more inclination to hit the road. Natural gas consumption will surely decline over the next few months, and markedly, as we move out of the heating season. Power generation will begin its inexorable ascent from the yearly low (which occurs in April) to reach the annual peak (usually in July), as required to meet the seasonal demands of air conditioning. And within the power sector, wind generation is certain to take the opposite tack, falling off the annual peak which occurs every spring and beginning a fast and steep descent towards its usual summertime low. Despite the fact that commercial solar power constitutes only a small share of the U.S. energy economy, we should be reminded that solar power in the broader sense, as reflected in the resulting seasonal patterns of energy generation and consumption, affects all sectors of the energy economy in very fundamental and predictable ways.
From the Editor
Robert Eric BorgströmAdvisor on Energy Regulatory Policy and ManagementWashington, DCrobertborgstrom2@gmail.com
I am sincerely appreciative of the contributions by members to this issue of USAEE Dialogue. USAEE Dialogue is entirely dependent upon member input not only for informational content but for its viability as a platform for member communications. All members of USAEE/IAEE in North America are strongly encouraged to help keep this avenue of member communications open by contributing articles (1000-4000 words) about their research, case studies and local chapter activities.
The next issue of USAEE Dialogue is scheduled to go on line September 1st. The deadline for final inputs to that issue is July 31, 2016. Members interested in proposing articles for that issue should contact me at email@example.com well in advance of that deadline for further information and guidelines for submission of manuscripts. I look forward to hearing from and working with you.
Mark B. Lively
(1948 - 2016)
Sadly we report the passing on March 6, 2016, of Mark Lively: consulting engineer; long-time member of USAEE/IAEE; past president of the National Capital Area Chapter, USAEE; and frequent contributor to USAEE Dialogue. Please read more about our late colleague and his career on the IAEE website at http://www.iaee.org/en/Membership/membernews.aspx#lively.
At the time of his passing, Mark was preparing the following article for publication in USAEE Dialogue. Mrs. Tracy Lively, his widow, very kindly sent this near-to-completion "work in progress" to the Editor so that Mark's work could be shared with his colleagues, as he always did.
Too Much of a Good Thing: Wind in AlbertaMark B. Lively
“Renewable Electric Power—Too Much of a Good Thing: Looking At ERCOT” discusses the impact of wind on the wholesale prices in Texas. There was so much wind generation in the West Texas generation pocket that 25% of the settlement periods in April 2009 had negative prices in West Texas. The constraints to the rest of ERCOT were such that the rest of ERCOT experienced negative prices for the equivalent of only 3 to 4 hours, or less than 1% of the month.
The 2016 Edition of the BP Energy Outlook
The following is an Executive Summary of an article that will appear in IAEE's Energy Forum in late May 2016. http://www.iaee.org/en/publications/newsletter.aspx
Mark FinleyGeneral Manager, Global Energy Markets & US EconomicsBP AmericaWashington, DCmark.firstname.lastname@example.org Arminé ThompsonOil Supply EconomistBP AmericaWashington, DC
The 2016 BP Energy Outlook attempts to look beyond the here and now and consider what current conditions may tell us about the future of global energy markets over the next 20 years. While the long term outlook presents many uncertainties, three main themes are highlighted in this year’s edition of the BP Energy Outlook.
An Analysis of Employment Growth Rate in
Nine Top Oil Producing States
Before and After the Oil Price Decline.
Nyakundi M. MichiekaAssistant ProfessorDepartment of EconomicsCalifornia State University, Bakersfieldnmichieka@csub.edu
This article assesses changes in employment in major oil producing states, following the recent decline in oil prices. Over the last 20 months, the West Texas Intermediate Spot price has dropped by 70 percent from $105.79 in June 2014 to $31.68 in January 2016. Reduced oil prices are often cited as a reason for reduced employment. Thus, the changes taking place in employment in nine oil producing states are investigated. These states are touted to have a large population working in the oil and gas sector (Brown and Yücel 2013). They include Alaska, Louisiana, New Mexico, North Dakota, Oklahoma, Texas, West Virginia and Wyoming.
The analysis evaluates changes in non-farm employees, and those in the mining and logging sectors before and after the oil price change. The average employment growth rate for non-farm employees is calculated for the 20 months leading to, and the 20 months after the oil price change. Also, the total non-farm employment in June 2014 is compared to that of January 2016. This exercise is repeated for employees in the mining and logging sector, and results reported for each state. The data used in this article is obtained from the Bureau of Labor Statistics (2016) and the U. S. Energy and Information Administration (2016).
Comments on the American Economic Association Conference
Douglas B. ReynoldsProfessor, EconomicsUniversity of Alaska, FairbanksDBReynolds@Alaska.Edu
If you did not go to the American Economic Association’s (AEA) conference in San Francisco this year, here is some of what you missed. Presenters at the main sessions were well known economists, but that doesn’t mean they all had a good grounding in energy economics. Indeed, one economist I talked to thought it was strange that I was an energy economist. I'm sure most economists do not believe that, although, when I went to the conference session entitled “U.S. economy where do we go from here?” nothing was mentioned about oil and energy, which was strange. It could be that many economists believe that oil supplies will grow indefinitely now that shale oil is here, or it could be that they believe technology will overcome oil scarcity. Nevertheless, let me inject here some energy economic reasoning into their discussion.
"Prosumage" And Digitized E-lectricity On The Grids’ Edge
The following is from an article that appeared in the March 2016 issue of EEnergy Informer, www.eenergyinformer.com, and is published in USAEE Dialogue with the permission of its author.
Fereidoon P. SioshansiPresident,Menlo Energy EconomicsWalnut Creek, CAfpsioshansi@aol.com
The latest craze these days is peer-to-peer transactions taking place among consumers/prosumers using electronic platforms to trade surplus electricity from rooftop solar panels, share a storage battery in the garage or smart gadgets that better manage load, self-generation and storage.
The new buzz word is "prosumage". With the arrival of storage, "prosumer" is passé. The future is becoming blurred as a growing number of consumers engage in self-generation and invest in storage, whose costs are projected to drop. Exciting things, we are told, are happening at the grid’s edge – whatever that means. There is talk of e-lectricity and digital utilities. It sounds great. This author, however, is not entirely sure what any of these words or concepts really mean.
Local Chapter Activities
Presidents of local USAEE Chapters are encouraged to share information about your local events and activities by submitting write-ups with photographs of member participation. Please contact the Editor for submission guidelines.
A Year of Growth for Rice University’s
USAEE Student Chapter (Houston, TX)
USAEE Rice University Student Chapter leaders in front of Rice’s James A Baker III Institute for Public Policy. [Left to right:] Megan Cline, Secretary; Viraj Sawant, Co-Treasurer; Mark Agerton, President; Nathalie Hinchey, Vice President; and Chandler Hillin, Co-Treasurer.
The 2015—2016 academic year has been an exciting time of growth for Rice University’s USAEE Student Chapter. Our chapter’s dozen or so members are Masters and PhD students in the Economics department, which sponsors the chapter along with Rice’s Center for Energy Studies at the James A Baker III Institute for Public Policy. This year the University started a new Masters in Energy Economics program, and the Masters students have been energetic participants and leaders in planning the chapter’s activities. The ability to partner with an active and supportive local USAEE chapter (Houston) has increased our chapter’s growth and relevance.
Forthcoming USAEE / IAEE Conferences
An important benefit of our USAEE/IAEE membership is the opportunity of participating at a member-discount in a wide range of USAEE/IAEE conferences around the world. Please take note of the following events for the remainder of 2016 and consult the respective conference websites for further details and registration information.
39th IAEE International Conference
June 19-22, 2016 -- Bergen, Norway
1st IAEE Eurasian Conference
August 28-31, 2016 -- Baku, Azerbaijan
34th USAEE/IAEE North American Conference
October 23-26, 2016 -- Tulsa, Oklahoma
Abstract Deadline: May 19, 2016!
The Center on Global Energy Policy at Columbia|SIPA seeks a Senior Research Scholar for a major research initiative on Global Natural Gas Markets. The position will report to the Center’s Founding Director. Successful execution will require generating original research, managing external research projects and communicating research findings clearly and concisely to a range of audiences in a manner that maximizes policy impact, as well as contributing to the Center’s wider research and convening efforts. Global natural gas markets are in the midst of a major transformation and this project will help to understand the policy issues and market dynamics that will have a profound impact on the global economy, geopolitics and environment in the 21st century. The position will engage at a high level with key stakeholders; a high level of verbal and written communications, and cultural awareness, skills are required.