North American Resources and Gas Supply to the State of California

The last decade has been witness to an incredible transformation in the US energy fortune. The combination of hydraulic fracturing and horizontal drilling in upstream operations targeting ultra-low porosity, ultra-low permeability hydrocarbon bearing shale formations has unlocked a bounty of natural gas and crude oil resource. This transformative innovation has literally turned the US energy market on its head. Fewer than ten years ago a number of large capital players were developing liquefied natural gas (LNG) regasification terminals with an eye toward importing large volumes of natural gas to the US from distant locations. Today, there is a prevailing expectation that the US will soon be an exporter of LNG, largely due to the rapid growth in natural gas production from shale that has occurred in the last 8 years (see Figure 1). In fact, US gross natural gas production has risen from an annual average rate of 64.3 billion cubic feet per day (bcfd) in 2005 to 82.7 bcfd in 2013, driven primarily by growth in production from shale from less than 4 bcfd to over 31 bcfd

Houston Energy Dialogues: Executive Summary

On March 28, 2017, Energy Dialogues organized an event co-hosted with Shell at the Shell Woodcreek Campus in west Houston in which participants from across the oil and gas sector engaged in discussions that centered on three themes: economy, environment, and coalition-building. This report summarizes the day's discussions

Electricity Reform and Retail Pricing in Texas

Electricity market reforms have pursued two main goals, both aimed at increasing economic efficiency. The first is to make prices more reflective of costs so that consumers can make more efficient decisions about where and when to consume electricity. The second goal is to ensure that suppliers minimize the costs of supply. How successful has electricity market reform in Texas been with regard to achieving these goals? We focus on one aspect of this overall set of desired outcomes, namely whether movements in retail prices reflect wholesale market prices and whether reform has delivered cost reductions in the delivery of energy services by retailers. We find clear evidence that retail prices in competitive market areas better reflect wholesale prices and have moved favorably for consumers relative to wholesale prices. The same is not necessarily true for consumers in non-competitive market areas. This suggests that competitive retail markets have delivered cost reductions consistent with electricity service providers reducing their marginal costs. The effort that Texas undertook over a decade ago to introduce competition into the retail electricity supply thus appears to be yielding the benefits to consumers that were intended in competitive areas. Consumers in less competitive areas do not appear to have benefited as much

Exploring the Role of Natural Gas in U.S. Trucking (Revised Version)

The recent emergence of natural gas as an abundant, inexpensive fuel in the United States could prompt a momentous shift in the level of natural gas utilized in the transportation sector. The cost advantage of natural gas vis-à-vis diesel fuel is particularly appealing for vehicles with a high intensity of travel and thus fuel use. Natural gas is already a popular fuel for municipal and fleet vehicles such as transit buses and taxis. In this paper, we investigate the possibility that natural gas could be utilized to provide fuel cost savings, geographic supply diversity and environmental benefits for the heavy-duty trucking sector and whether it can enable a transition to lower carbon transport fuels. We find that a small, cost-effective intervention in markets could support a transition to a commercially sustainable natural gas heavyduty fueling system in the state of California and that this could also advance some of the state’s air quality goals. Our research shows that an initial advanced natural gas fueling system in California could facilitate the expansion to other U.S. states. Such a network would enable a faster transition to renewable natural gas or biogas and waste-to-energy pathways. Stricter efficiency standards for natural gas Class 8 trucks and regulation of methane leakage along the natural gas supply chain would be necessary for natural gas to contribute substantially to California’s climate goals as a trucking fuel. To date, industry has favored less expensive technologies that do not offer the highest level of environmental performance

The Grand Energy Challenge

Presented at the Energy Expo on February 10, 2017 in the Georgia Tech Student Center, 3rd Floor Ballroom.Keynote Speaker - Kenneth B. Medlock III, Ph.D., is the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at the Baker Institute and the senior director of the Center for Energy Studies. He is also the director of the Masters of Energy Economics program, holds adjunct professor appointments in the Department of Economics and the Department of Civil and Environmental Engineering, and is the chair of the faculty advisory board at the Energy and Environment Initiative at Rice University. He teaches advanced courses in energy economics and supervises Ph.D. students in the energy economics field. Medlock is a principal in the development of the Rice World Natural Gas Trade Model, which is aimed at assessing the future of international natural gas trade. He has published numerous scholarly articles in his primary areas of interest: natural gas markets, energy commodity price relationships, gasoline markets, transportation, national oil company behavior, economic development and energy demand, and energy use and the environment. He has testified multiple times on Capitol Hill on U.S. oil and natural gas exports, has spoken at OPEC, and is frequently asked to speak about global and domestic energy issues. Medlock is currently the vice president for conferences for the United States Association for Energy Economics (USAEE), and previously served as vice president for academic affairs. In 2001, he won (joint with Ron Soligo) the International Association for Energy Economics Award for Best Paper of the Year in the Energy Journal. In 2011, he was given the USAEE’s Senior Fellow Award, and in 2013 he accepted on behalf of the Center for Energy Studies the USAEE’s Adelman-Frankel Award. In 2012, Medlock received the prestigious Haydn Williams Fellowship at Curtin University in Perth, Australia. He is also an active member of the American Economic Association and is an academic member of the National Petroleum Council. Medlock has served as an advisor to the U.S. Department of Energy and the California Energy Commission in their respective energy modeling efforts.Runtime: 68:21 minutesGeorgia Tech Strategic Energy Institute and Serve-Learn-Sustai

The Shale Revolution: What Do We Know and Where Are We Going?

A conference report on "The Shale Revolution: What Do We Know and Where Are We Going?" hosted by the Center for Energy Studies on Oct. 30, 2014

North American Resources and Gas Supply to the State of California

The last decade has been witness to an incredible transformation in the US energy fortune. The combination of hydraulic fracturing and horizontal drilling in upstream operations targeting ultra-low porosity, ultra-low permeability hydrocarbon bearing shale formations has unlocked a bounty of natural gas and crude oil resource. This transformative innovation has literally turned the US energy market on its head. Fewer than ten years ago a number of large capital players were developing liquefied natural gas (LNG) regasification terminals with an eye toward importing large volumes of natural gas to the US from distant locations. Today, there is a prevailing expectation that the US will soon be an exporter of LNG, largely due to the rapid growth in natural gas production from shale that has occurred in the last 8 years (see Figure 1). In fact, US gross natural gas production has risen from an annual average rate of 64.3 billion cubic feet per day (bcfd) in 2005 to 82.7 bcfd in 2013, driven primarily by growth in production from shale from less than 4 bcfd to over 31 bcfd

Essays on economic development, energy demand, and the environment

The rapid expansion of industry at the outset of economic development and the subsequent growth of the transportation and residential and commercial sectors dictate both the rate at which energy demand increases and the composition of primary fuel sources used to meet secondary requirements. Each of these factors each has an impact on the pollution problems that nations may face. Growth in consumer wealth, however, appears to eventually lead to a shift in priorities. In particular, the importance of the environment begins to take precedent over the acquisition of goods. Accordingly, cleaner energy alternatives are sought out. The approach taken here is to determine the energy profile of an average nation, and apply those results to a model of economic growth. Dematerialization of production and saturation of consumer bundles results in declining rates of growth of energy demand in broadly defined end-use sectors. The effects of technological change in fossil fuel efficiency, fossil fuel recovery, and 'backstop' energy resources on economic growth and the emissions of carbon dioxide are then analyzed. A central planner is assumed to optimize the consumption of goods and services subject to capital and resource constraints. Slight perturbations in the parameters are used to determine their local elasticities with respect to different endogenous variables, and give an indication of the effects of changes in the various assumptions

Testimony: Hearing on Geopolitics of Oil and Gas

CES senior director Ken Medlock testifies on the geopolitics of U.S. oil and gas competitiveness