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Center for Energy Economics & Public Policy
Current Energy Economic Projects

World Energy Consumption by Region

Natural Gas Pricing

Charles Mason and David Finnoff

An important empirical regularity during much of the last decade is a significant difference between the spot prices for natural gas sent out of Wyoming (principally at the Opal and Wyoming Pool hubs) on the one hand and the spot price at the Henry Hub. For much of the last decade, the spot price for natural gas was significantly higher at Henry Hub.  Aside from being of interest as an intellectual issue, this price differential has important implications for the state of Wyoming, as severance tax revenues are closely linked to spot prices.

This project is investigating two major questions.

  • The extent of the capacity utilization of these pipelines over time and the relationship between this utilization and price differentials.
  • The extent of market power in the industry, how this has changed with regulatory changes and whether the exploitation of market power is related to the price differential.

Economics of Carbon Capture and Storage

Owen R. Phillips and Klaas van 't Veld

Carbon dioxide is considered to be both a commodity and a pollutant. As a commodity, it has value in enhanced oil recovery (EOR) and enhanced coal bed methane (ECBM) recovery. As policy aimed at mitigating climate change develops, and CO2 is treated as a pollutant, the ability to sequester CO2 underground becomes an additional source of economic value. Since a significant fraction of the CO2 injected by EOR projects and essentially all of the CO2 injected by ECBM projects remains in the reservoir or coal seam, both types of projects may be able to earn carbon credits for avoided emissions. In addition, at sufficiently high carbon-credit prices, deep saline aquifers become viable storage sites. Wyoming has at least two deep saline sites considered suitable for such storage, namely the Rock Springs Uplift and the Moxa Arch.

The proposed tasks carry forward with work on carbon capture and sequestration (CCS) in deep saline aquifers and enhanced coal bed methane recovery projects.

  • Forecasting the cost of carbon capture and sequestration in deep saline aquifers
  • CCS and enhanced coalbed methane recovery
  • CCS infrastructure
  • Impact of taxes and subsidies on CCS
  • Forever market conditions for CCS: The Forever Storage of a Pollutant
  • Law and economics of CCS

Wind Energy Development

Robert Godby and Roger Coupal 

Wyoming's primary economic base is energy resource development, specifically in traditional fuel sources. The state is the largest producer of coal in the country and exports to utilities in thirty states. Natural gas production is also substantial, comprising 10% of total US consumption. In addition to these traditional carbon-based resources, the state has significant renewable energy resources, particular in wind power. The development of these renewable resources is critical to national energy security goals and the state's economic future, particularly in a carbon-constrained world.

The purpose of this project is to develop the capability to evaluate the impact of new power production systems, particularly the challenges posed by renewable sources such as wind, on the state and the regional and national electric grid.

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