2016 Think Corner


CEE 21st Annual Meeting:
Houston Branch - Federal Reserve Bank of Dallas Conference Center

December 7-8, 2016

CEE’s 2016 annual meeting, like many annual meetings before it, and other “think days” throughout the year, brought together a wide range of stakeholders in the realm of energy economics, and friends of CEE, for a no-holds-barred, confidential discussion about the future economics of key energy issues.

  • Wednesday, December 7
    • 8:30 a.m. Welcome, agenda for annual meeting [link]
      • Dr. Michelle Michot Foss, Chief Energy Economist and Program Manager, BEG/CEE [link]
      • For our 21st annual meeting and conference, we look ahead by working backward from the electric power burner tip with BEG/CEE research as the lens and the launch of our Electric Power Research Forum (EPRF) the context for investigation of key policy, regulatory and market drivers.
      • Deborah Byers, US Energy Market Segment Leader, Houston Office Managing Partner, Ernst & Young [link]
      • A Conversational Tour Through the Value Chains
    • 10:00 a.m. Electric Power Issues, Part 1 - "Ch-ch-ch-ch-Changes." Moderator: Dr. Gurcan Gulen, Senior Energy Economist/Research Scientist, BEG/CEE
      • Colin Meehan, Director, Regulator and Public Affairs, First Solar [link]
      • Daniel Crotzer, Storage Principal Consultant, Fractal Energy [link]
      • Simon Greenberg, Enovation Partners [link]
      • Dr. Chen-Hao Tsai, Senior Energy Economist/Research Associate, BEG/CEE [link]
      • Terry Thorne, President, JKM Consulting [link]
    • 12:00 p.m. Politics Schmolitics: NIMTO and "Reagan's Law of Diminishing Returns," Dr. Foss, Moderator
      • Bob Skinner, KIMACAL Energy Strategies Ltd, Executive Fellow School of Public Policy, University of Calgary, CEE Global Advisor
      • Luis Giusti, Senior Advisor, CSIS
      • Lou Pugliaresi, President, EPRINC [link]
      • Marc Spitzer, Partner, Steptoe & Johnson
      • Sheila Hollis, Partner, Duane Morris
      • Bill Gilmer, Director, Institute for Regional Forecasting, University of Houston, CEE Modeling/Analytics Advisor
    • 1:45 p.m. Electric Power Issues, Part 2 - What Future for Competitice Markets? Dr. Gulen, Moderator
      • Paul Sotkiewicz, President, E-Cubed PolicyAssociates, LLC (former Chief Economist, PJM) [link]
      • Rao Konidena, Principal Advisor, Policy Studies, MISO [link]
      • Kelli Joseph, Director, Market & Regulatory Affairs New York, NRG Energy [link]
      • Eric Schubert, Regulatory Affairs Advisor, BP Energy Company
    • 4:00 p.m. Is the “Gas Bridge” Shovel Ready? And Other Thoughts on Gas (and Oil) Midstream, Downstream, Global Gas & LNG; Dr. Foss, Moderator
      • Christopher Caswell, Director, LNG & FLNG, E&C, KBR
      • Barbara Shook, Senior Reporter-at-Large & Analyst, EIG
      • Ken Culotta, Partner, King & Spalding
      • Miranda Wainberg, BEG/CEE Senior Energy Advisor
      • Deniese Palmer-Huggins, BEG/CEE Senior Energy Advisor
    • Presentation & Discussion: State of Play - Mexico; Luis Miguel Labardini, Partner, Marcos & Asociados [link]
  • Thursday, December 8
    • 8:30 a.m. Very Special Frameworks - Social Impact; Dr. Foss, Moderator
      • Bob Skinner, President, KIMACAL Energy Strategies Ltd, Executive Fellow School of Public Policy, University of Calgary, CEE Global Advisor [link]
      • Miriam Grunstein, President, Brilliant Energy Consulting/CEE Mexico Partner
      • Don Knop, Consultant, CEE Analytics.Modeling Advisor
    • 10:45 a.m. Gas (and Oil) Upstream Realizations and Outlooks, Dr. Foss, Moderator
      • Andrew Pizzi, Bernstein Research [link]
      • Mike Kelly, Managing Director, Head of E&P Research, Seaport Global
      • Steve Pruett, President and CEO, Elevation Resources
      • John Oberg, Vice President-Business Development, Three Rivers Operating Company (3ROC) [link]
      • Les Deman, President, Les Deman Consulting, CEE Analytics.Modeling Advisor
      • Luis Macias Chapa, MSA PRomotores Internacionales (former VP/Advisor, Pemex E&P)
      • Rahul Verma, BEG Research Scientist Associate [link]
    • 12:00 p.m. Back to the Future: Toyota's Transition; Rober Wimmer, Director, Energy & Environmental Research, Product Regulatory Affairs, Toyota Motor North America [link]
      Watch Toyota's video Fueled by the Future
    • 1:30 Adjourn


Electric Vehicle Diffusion and Raw Materials Supply Chains
November 2016

CEE research on lithium value chains (see our April 2016 research note) continues with this snapshot as we present data on the growth of battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV), the risks for battery manufacturing, battery specifications, and trade flow diagrams of global lithium carbonate and lithium hydroxide.


LNG Marine Fuel Applications
November 2016

The marine shipping industry is global in scale and scope with approximately 80 percent of global trade by volume and 70 percent of trade by value being transported by sea and handled by ports worldwide. The percentages are even higher in the case of most developing countries (IMO World Maritime Day, 2016). Marine shipping is a vital link in the global economy; its financial health is driven by the level of economic activity and growth in world trade. See our new Research Note to learn about marine shipping and the viability of LNG use as a fuel.


Competitive Retail Electricity Market: Up Close in Connecticut
September 2016

Our latest investigation on the competitive retail electricity market, in collaboration with Professor Yi-Lin Tsai at University of Delaware, highlights the importance of utilizing both billed prices and corresponding consumer counts to evaluate the market, in addition to relying on traditional consumer migration metrics. With information of both billed prices and consumer count, we are able to quantity consumer welfare under retail electricity choice program.


LNG Supply Outlook 2016 to 2030 [full paper] [Executive Summary]
July 2016

Noted LNG expert Andy Flower collaborated with CEE to provide his views on capacity expansion in liquefaction worldwide and implications for LNG supply-demand and trade. The full paper also incorporates considerations associated with lower oil, natural gas and delivered LNG prices as well as the rapidly changing commercial and contracting scene. Our executive summary and commentary covers the main conclusions and also some updates and developments since the full paper was completed.


Outlooks on Natural Gas for Use in Power Generation
April 2016

The U.S. electricity industry is going through significant transformations with increasing penetration of renewable energy, cheap natural gas, stagnant load growth and new environmental regulations, among other factors.These changes have led to a record level of natural gas-fired electricity generation, but there are uncertainties going forward. We model 10 scenarios to capture some of these uncertainties: a more aggressive expansion of renewables, low and high natural gas price forecasts, lower load growth, and premature retirement of 43 GW of nuclear capacity.


Battery Materials Value Chains
April 2016

This 30-page Research Note expands on the snapshot we released on November 2015 on battery materials. Our analysis indicates that 75% utilization rates at existing and upcoming facilities can satisfy expected demand for both lithium and cobalt in the short-term. However, high-growth scenarios require new capacity and/or higher rates of utilization. The influence of geopolitical risks, growth in other applications, and development of new applications could push demand in excess of production capacity. Government regulations in response to local interests, environmental concerns and future sustainability have influenced material supply in the past and may continue. While many factors could ease pressure for new production capacity, development of new applications like grid energy storage and use of lithium‐ion batteries in heavy vehicles have the potential to significantly increase demand beyond what is typically expected in the literature.


Is Midstream in Crisis?
April 2016

This is the next installment in our tracking of midstream sector. Events have mostly played out as we expected in our 2013 mid-year update. The value of MLPs dropped by about 40% in 2015 as a result of shrinking gas processing margins and other challenges. 11 companies have been downgraded as of October 2015; 13 companies are on negative watch with lower outlooks for midstream activity. We offer three scenarios in this snapshot: First, our “Live and Let Die” scenario in which MLPs are driven out of the midstream sector entirely; second, a middle ground scenario where the larger, better capitalized MLPs outlive the smaller, more vulnerable ones; and lastly, our “Cycle of Life” case where new MLPs continue to be created from spinoffs of assets.

Are "We" Asking Too Much of Electricity Markets?

CEE 2016 Mid-Year Meeting
Houston Branch - Federal Reserve Bank of Dallas Conference Center
June 28, 2016

CEE Looks to the Future of U.S. Electricity Market Economics in its Mid-Year Meeting.

  • 8:30 a.m. Welcome & Overview, Dr. Gurcan Gulen, CEE
    • "We” want cheap, clean, reliable, and secure electric power service. Cognitive dissonance?
    • Conflicting objectives and policies creating a wide range of potentially very large uncertainties. [link]
  • 9:00 a.m. Competitive Electricity Markets are Being Sidelined, Drs. Gulen & Chen-Hao Tsai, CEE
    • Can enhancing day-ahead and real-time price signals, reforming capacity markets, and/or other market design adjustments address the “missing money” problem?
  • 9:30 a.m. What is the Full Cost of Electricity?, Drs. Gulen & Michelle Michot Foss, CEE
    • LCOE, LACE and system costs
    • Financial support mechanisms
    • Energy Webs [link]
  • 10:30 a.m. Resource Adequacy, Resource Capacity optimization, and System Costs, Drs. Gulen & Tsai, CEE
    • Importance of assumptions: Demand growth, technology cost trends, etc.
    • Impact of environmental regulations
    • Impact of rapid expansion of renewables capactiy [link]
    • Impact of Nuclear retirements [link]
  • 11:30 a.m. Lunch Guest Speaker, Marc Spitzer, Steptoe & Johnson LLP
  • 1:00 p.m. Musings on Why Retail Electricity Prices Diverge from Wholesale Prices, Dr. Tsai, CEE [link]
  • 1:30 p.m. Minerals Supply Chains for Battery Storage, Mr. Rahul Verma & Dr. Foss, CEE [link]


Upstream Matters! 2015 Update
March 2016

The update of our financial evaluation of 12 companies with 2015 data reflects the significant negative impact of low oil, liquids and natural gas prices. We have instituted a cash flow waterfall analysis to further understand key challenges in cost structure and financing faced by many companies in the U.S. upstream sector. An important question is dependence upon capital markets going forward at a time when capital flows to the oil and gas industries will be constrained by factors ranging from commodity price to positioning and performance.


Retail Electricity Prices on the Rise
March 2016

CEE investigates the sustained upward trend of residential electricity prices in the face of commercial and industrial sector prices which have remained flat since 2010. This comes at a time of stagnating electricity demand, low natural gas prices, and an increase in the penetration of renewable energy in the bulk power system. Chief among our interests are determining which drivers are forcing up retail prices and whether or not the trend is sustainable. We found that the wholesale price has followed the natural gas price downwards while retail prices have decoupled from the wholesale price. Furthermore, preliminary analysis suggests that states with relatively higher prices than others tend to have more aggressive renewable energy targets and competitive markets.


CEE Nuclear Energy Roundtable Part III:
Houston Branch - Federal Reserve Bank of Dallas Conference Center
January 6, 2016

Years of CEE research on the electricity sector indicates that nuclear energy is at risk of being sidelined because of the tension between conventional nuclear energy project costs and competitive wholesale electricity market designs, promotion of renewables for environmental and local economic benefits, and concerns associated with nuclear waste and safety. 

CEE began hosting periodic roundtables in 2009 to build an effective forum for discussion of nuclear energy issues and challenges that should inform and, in turn, be impacted by CEE and UT research. The previous nuclear energy roundtables have served to gather diverse and experienced viewpoints from industry, government and external organizations.


  • 10:00 a.m. Opening Session: Why Nuclear Still Matters
    • Dr. Chen-Hao Tsai, Senior Energy Economist BEG/CEE- Welcome & key points from previous roundtables and CEE research on nuclear and electricity markets
    • Lady Barbara Judge, Roundtable Chair and former head of UK Atomic Industry Association- "Why Nuclear Still Matters"
  • 10:15 a.m. Theme 1: Challenges and Opportunities for U.S. Nuclear Energy
    • David Wright, Former NARUC President, Moderator
    • Experts: 
      • Mark McBurnett, CEO Nuclear Innovation [link]
      • Neel Mitra, Tudor Pickering Holt & Co [link]
      • Dr. Chen-Hao Tsai, Senior Energy Economist BEG/CEE
  • 12:45 p.m. Theme 2: Interaction of Nuclear with Other Energy Sources – International Developments
    • Pablo Mulas, Mexico Secretariat - World Energy Council
    • Experts
      • Jean-Marc Capdevila, French Counselor for Nuclear Energy
      • Kelly McGrath, ENGIE
      • Dr. Hisanori Nei, GRIPS [link]
      • Ing. Juan Eibenschutz,CNSNS Mexico [link]
  • 2:15 p.m. Theme 3: Technology Solutions and Risk Management
    • Dr. Erich Schneider, UT Austin Department of Mechanical Engineering [link]
    • Experts:
      • Dr. Dan Ingersoll, NuScale [link]
      • Dr. Ken Peddicord, Texas A&M Nuclear Power Institute
      • Dr. John Poston, Texas A&M Nuclear Power Institute
  • 3:30 p.m. Closing Remarks and Adjour