Natural gas use in the U.S. grew dramatically through the early 1970s. During most of this period, much of the natural gas produced in the U.S. was a by-product of crude oil production. The reservoirs that produced dry natural gas were generally large and provided easy targets for drilling and long-lived reserves.

Over the last 40 years, natural gas consumption in the U.S. has been cyclical. Natural gas consumption in the U.S. in 2003 was only modestly above the level in 1973...More (.pdf)

~ J. Paul Roberts

In 1997, I published a commentary, How Many Regulators Do We Need? in Natural Gas.  The commentary was based on a 1995 study of the U.S. natural gas industry, restructuring, and state public utility regulatory oversight.  The conclusions and observations, viewed in the context of the current status of electricity restructuring in the U.S., are such that my commentary on regulation and regulators is re-published in Think Corner.

~ Dr. Michelle M. Foss

In February 2005, a group of University of Alberta MBA students, specializing in Natural Resources and Energy, visited Houston as part of their capstone course. The students were led by Professor Joseph Doucet. The visit to Houston introduced the students to the energy capital of the U.S., Canada's largest trading partner. As part of their course, the students produced research papers on four important topics that affect energy sector development in Canada, and particularly in Alberta.

The oil sands found in northern Alberta represent an incredible resource that is enjoying a surge of development and promises to grow in the future and provide crude oil for Canadian and U.S. markets for years to come. The first paper presents an overview of this resource and describes some of the particularities and challenges of this resource. Download An Introduction to Development in Alberta's Oil Sands, by Rob Engelhardt and Marius Todirescu

Alberta is blessed with vast quantities of resources, including petroleum, forests, as well as a beautiful natural environment. Challenges present themselves as we develop these resources and strive to maintain a balance between economic development and environmental protection. The second paper discusses specific impacts of oil and gas development on Alberta's forests, one of the challenges that we face. Download Forest Fragmentation – Effects of Oil and Gas Activities on Alberta Forests, by Thomas Braun and Stephen Hanus

Another challenge in the development of Alberta's oil and gas reserves is to work with Canada's Aboriginal peoples, as is discussed in the third paper. This challenge mirrors similar issues in other parts of the world and highlights the need for open and transparent processes, consultation and a clear regulatory framework. Download The Aboriginal Role in the Development of Albertan Oil and Gas Reserves, by Sherry Norton and Shelley Zwicker

The fourth paper discusses a forward-looking issue, namely the development of the Mackenzie Valley Pipeline. While not as large as potential resources in Alaska, Mackenzie gas will have a positive impact on North American gas markets. Download The Mackenzie Valley Pipeline, by Robert Huston and Ashish George Sam

~ Dr. Joseph Doucet

There is a vigorous debate over the question of "energy sustainability." On one side are the energy transformationists who believe that the current carbon-based energy economy is unsustainable, and new ways of doing things must be found and implemented on both the demand and supply sides to radically reduce the combustion of oil, gas, and coal. The alleged end of "cheap oil" is one concern, and "secure oil" another; but the biggest fear is the human-influence on global climate from greenhouse gas emissions associated with fossil fuels. The plea for urgency often leads to very dire predictions of a business-as-usual energy world. This is why the energy transformationists have also been labeled energy alarmists.

I am a member of the energy optimism school, or what I call the energy realism school, that looks at the statistical record to note that almost all energy trends pertaining to human welfare are positive, not negative. There are short run problems, but the problems themselves drive the entrepreneurial process for improvement--if (and this is a big if) market processes are at work. The energy sustainability problem is not seen as man-qua-consumer but man-qua-government. It is government intervention that creates physical shortages of energy and artificially increases scarcity--to wit the "geo-political" problem of world oil supply with almost all reserves owned by government. The energy optimists also make a case that the human influence on climate is moderate and has strong positives, not only negatives. And as importantly, there is virtually nothing that activist energy policy can do to reverse the human influence on climate. Pricing carbon only leaves consumers with higher prices and inferior products.
Pricing carbon simply politicizes energy markets and enriches an intellectual elite with jobs, consulting dollars, and "a cause." I wish that their cause would become energy poverty from statism, which to me is the true energy sustainability issue.

The energy sustainability debate is exciting and vigorous. But too often passions run so high that the alarmists exclude the other side in the debate in their zeal to focus urgency on "the problem." A good example of this is a new six-volume energy encyclopedia that I reviewed in The Energy Journal.
My review is not only about the energy sustainability debate but also about the exclusion problem. It is inexcusable in the information age to pretend that a whole opposing school of thought does not exist. My theory is that when the alarmists debate with the optimists, the optimists take away the urgency of the transformationists' energy problem. Thus exclusion is necessary, which creates an intellectual cartel and a "shared narrative" of political correctness.

All this is for the reader to decide. I hope you enjoy the review and that some of you will also visit my website, www.energyrealism.org for more information about the non-alarmist view of the energy world. Read the review (.pdf)

With the permission of the International Association for Energy Economics (IAEE); this review was previously published in The Energy Journal, Vol 26(1), 2005.

~ Rob Bradley

On July 11, 2002 the FERC overturned a sharply lower price cap issued earlier in the week by the CAISO, which used a complex formula linked to peak prices during power shortages to cut its price cap by nearly 40 percent on July 9 to $57.14 per MWh, and then on July 10 to $55.26 per MWh. These low caps made it difficult to get power to where it was most needed. It was also hard to justify running older, less efficient plants at these prices. The FERC returned the region-wide cap on Western power prices to its previous level of $91.87 per MWh, which will remain in place until September 30. The agency said it overturned the state agency's lower cap because the caps “could cause severe supply disruptions…We act now because we cannot expose customers in California and other Western states to the risks of a low price cap.” (emphasis added) State officials welcomed the move... More (.pdf)

~ Gürcan Gülen

The structure of the oil and gas sectors of many Latin American countries negotiated at the time of nationalization has come under increasing pressure during the decades of the 1980’s and 1990’s and that pressure continues today. Upon nationalization, ownership rights to all hydrocarbons were reserved to the state, and state-owned oil and gas companies were established to develop those resources on the state’s behalf. The sovereign companies would provide a level of fiscal revenue to their governments in the form of royalty and taxes which would be used for national economic development needs. Profits retained by sovereign companies would be used to develop the hydrocarbon sector. This model is inherently conflict-ridden because each party can have radically different views concerning the appropriate level of the government “take” and the appropriate level of profit and reinvestment required by the company.... More (.pdf)

~ Miranda Ferrell

When energy markets are restructured to allow for competition, regulated rates are
replaced by more volatile prices of the open market. In this environment, the expectation of lower prices can cause private investors to postpone expenditures on new generation capacity or the expansion of transmission network. Both are desired by system operators for maintaining grid reliability. The lack of surplus capacity or congestion in the system can further increase price volatility. The price-destabilizing effects associated with temperature extremes, unplanned outages, the dominance of generation by a single fuel and so on are exacerbated when coupled with insufficient system capacity. As a result, regulators focus on resource adequacy. In competitive markets, investors have to recover their costs through market prices not through COS regulation. In this environment, there are basically two options to ensure resource adequacy:... More (.pdf)

~ Gürcan Gülen