Gas Price Fluctuations Research Articles

An optimisation method for planning and operating nearshore island power and natural gas energy systems

As the development and use of offshore islands increase, so do the diversity of their energy needs, the cost of utilising the mainland for resource replenishment, and the instability of island energy systems. To address this challenge, this paper introduces an innovative system integrating fossil and renewable energy tailored for these islands, considering seasonal variations and external energy fluctuations. Leveraging a P-graph, an optimisation framework is designed to assess different optimised solutions. A comprehensive analysis is also performed to compare the solutions, while sensitivity assessments evaluate factors including electricity and gas price fluctuations, renewable energy availability, and natural gas demand. Additionally, the carbon emissions resulting from different power generation scenarios are visually represented and thoroughly analysed. The results support two key findings: 1) the cost of combined energy supply is lowest when wind energy accounts for 59 % of the total energy, mainland grid connection accounts for 3 %, fossil fuel energy accounts for 28 %, and natural gas accounts for 10 % of the energy mix; and 2) the price of electricity and natural gas supplied to the islands and the variability in the energy sources of wind and natural gas can significantly affect the cost of the energy system.

Directional connectedness between the electricity prices and natural gas prices: evidence from Alberta’s electricity market

Purpose This study aims to assess volatility spillovers and directional connectedness between electricity (EPs) and natural gas prices (GPs) in the Canadian electricity market, based on a hydrothermal power generation market strongly dependent on exogenous variables such as fossil fuel prices and climatology factors. Design/methodology/approach The methodology is divided into two stages. First, a quantile vector autoregression model is used to evaluate the direction and magnitude of the influence between natural gas and electricity prices through different quantiles of their distributions. Second, a cross-quantilogram is estimated to measure the directional predictability between these prices. The data set consists of daily electricity and natural gas prices between January 2015 and December 2023. Findings The main finding shows that electricity prices are pure shock receivers of volatility from natural gas prices for the different quantiles. In this way, natural gas price fluctuations explain 0.20%, 0.98% and 22.72% of electricity price volatility for the 10th, 50th and 90th quantiles, respectively. On the other hand, a significant and positive correlation is observed in the high quantiles of the electricity prices for any natural gas price value. Originality/value The study described the risk to the electricity market caused by nonrenewable source price fluctuations and provided evidence for designing regulatory policies to reduce its exposure in Alberta, Canada. It also allows us to understand the importance of natural gas in the energy transition process and define it as the fundamental determinant of the electricity market dynamic.

A static robust energy management approach for modelling low emission multi-vectored energy hub including emission markets and power-to-gas units

This paper develops a robust and sustainable energy management framework to model a multi-vectored energy hub (MVEH) system. A max-min-based static robust optimization model is developed to counter the uncertainties. Furthermore, a flexible energy demand management program, battery electric vehicles (BEVs), and compressed air battery storage (CABS) are integrated to enhance MVEH's flexibility. Hybrid power-to-X units (electrolyser, methanization reactor and fuel cells) are modelled to reduce green energy spillage and improve operational independence, including heat pumps. Moreover, the emission (carbon cap and trade) market along with carbon capture storage and utilization units (CCS–U), are incorporated to establish a low-emission multi-energy model. Simulation results demonstrate that with flexible resources and power-to-X units, MVEH reduces the operating energy cost by 46.4 % and improves the system independence by 19.06 %. Besides, CCS-U units produce 92 % less emission while increasing the energy cost by 5.1 %. However, MVEH gains the right to sell carbon credits under the emission market. Thus, the multi-vectored system's economical, reliable, and environmental viability are ensured. Finally, sensitivity analysis proves the robustness of the proposed framework against natural gas and carbon price fluctuations.

The Effect of Global Oil and Gas Prices and Production Fluctuations on the Economy of Nigeria

Once a cornerstone of the U.S. economy, crude oil production now experiences a paradigm shift, abundant for domestic consumption and export, signaling a lasting global oil price transformation. Despite a surge in U.S. hydrocarbon production and weakening oil prices, imports from Nigeria dramatically dropped from 1.5 million barrels per day in 2006 to 0.2 million in 2013, ceasing entirely by early 2014. Consequently, Nigeria faced a sudden depletion of trade surpluses and reduced foreign reserves. This study delves into the immediate and long-term challenges confronting Nigeria, particularly examining the impact of recent oil and gas price fluctuations on key macroeconomic factors. Findings highlight the balance of payments' high elasticity to oil price shifts and low elasticity to money supply changes with a coefficient of determination of 78.69%. Additionally, the exchange rate shows low elasticity to oil price changes and moderate elasticity to money supply variations with a coefficient of determination of 82.80%.

Valorization of tropical fruit‐processing wastes and byproducts for biofuel production

AbstractGlobal energy demand is expanding due to an increasing population and the use of energy‐intensive technologies. Fossil‐based energy and transportation sectors have been blamed for greenhouse gas emissions and price fluctuations. Biofuel production has been suggested as a possible solution to this problem, despite the cost of production and difficulties with the availability of feedstocks, and the food versus energy debate, which is still a challenging issue. For many decades, researchers have been investigating how to valorize low‐cost and non‐edible biomass resources, including fruit‐processing waste and its byproducts, to produce various biofuels using innovative, cost‐effective, and green technologies to overcome these challenges. However, exhaustive studies and comprehensive and structured knowledge related to the biofuel production potential of fruit waste and byproducts are lacking because most of the research that has been done so far was specific to a single fruit, location, and method. As a result, this review paper emphasizes the evaluation of the physicochemical compositions of the wastes and byproducts derived from tropical fruit production and processing to determine their suitability in the production of different biofuels via various valorization techniques. The results of the review showed that fruit waste is a potential alternative raw material for producing different biofuels, like biodiesel, biogas, biohydrogen, and fuel pellets.

Investigating the nature of interaction between crypto-currency and commodity markets

This paper investigates the dynamic relationship and volatility spillovers between cryptocurrency and commodity markets using different multivariate GARCH models. We take into account the nature of interaction between these markets and their transmission mechanisms when analyzing the conditional cross effects and volatility spillovers. Our results confirm the presence of significant returns and volatility spillovers, and we identify the GO-GARCH (2,2) as the best-fit model for modeling the joint dynamics of various financial assets. Our findings show significant dynamic linkages and volatility spillovers between gold, natural gas, crude oil, Bitcoin, and Ethereum prices. We find that gold can serve as a safe haven in times of economic uncertainty, as it is a good hedge against natural gas and crude oil price fluctuations. We also find evidence of bidirectional causality between crude oil and natural gas prices, suggesting that changes in one commodity's price can affect the other. Furthermore, we observe that Bitcoin and Ethereum are positively correlated with each other, but negatively correlated with gold and crude oil, indicating that these cryptocurrencies may serve as useful diversification tools for investors seeking to reduce their exposure to traditional assets. Our study provides valuable insights for investors and policymakers regarding asset allocation and risk management, and sheds light on the dynamics of financial markets.

Natural Gas–Electricity Price Linkage Analysis Method Based on Benefit–Cost and Attention–VECM Model

In recent years, frequent linkage events of natural gas and electricity prices have seriously affected the stability of the energy supply market. In view of the increasingly close linkage relationship between gas and electricity prices, a gas–electricity price linkage analysis method considering the benefit–cost and price transmission of gas units is proposed. Firstly, a benefit–cost model of gas units based on risk premium theory is constructed to reflect the willingness of gas units to offer prices in different market environments. Secondly, a vector error correction model (VECM)-based gas–electricity price conduction analysis method was proposed to study the long-term co-integration relationship between gas–electricity prices and the short-term fluctuation conduction process. Then, aiming at the problem of delay in price transmission, a time-delay analysis method of gas–electricity price based on the attention mechanism is proposed. Finally, the gas price index and average gas power price data of China from August 2020 to November 2022 are used to verify the validity of the proposed model; the numerical results show that the proposed method can determine the long-term stable fitting relationship between gas and electricity prices, and can also analyze and judge the conduction direction of gas and electricity price fluctuations in different time periods.

Predicting volatility in natural gas under a cloud of uncertainties

The COVID-19 pandemic has triggered an economic crisis and the ensuing global uncertainty. The current Russian-Ukrainian conflict has escalated tensions in various regions and increased various uncertainties in the financial and economic system. These uncertainties have had a significant impact on the development of the natural gas market during the current critical period of carbon neutrality and energy transition. This paper explores the impact of various uncertainties on price volatility in the U.S. natural gas futures market using the GARCH-MIDAS model. We considered eleven types of uncertainties, including four US economic policy uncertainties, four global uncertainty indicators, and oil supply-demand uncertainty closely related to the natural gas market. The in-sample empirical results find that various uncertainties can impact the natural gas market. However, through out-of-sample testing, we find that economic policy uncertainty has more predictive power than other indicators in predicting natural gas price fluctuations. Interestingly, oil supply-demand uncertainty surpasses global indicators and can provide forecasting information for natural gas markets. Therefore, in the current context of high uncertainty, our research may offer better decision-making opinions for market participants.

Energy Price Fluctuation and Inflation in Nigeria: A Granger Causality Analysis

The Nigerian economy depends to a reasonable extent on the sale of crude oil for its expenditure. The country also depends on importation for a high level of its consumption. Given these events, this paper set out to investigate the causality effect of energy price fluctuations on inflation in Nigeria. This was done using time series data from 1985 to 2018. Oil price, gas price and exchange rate were the independent variables and inflation was the dependent variable. The result of the pairwise granger causality test shows that inflation is not caused by oil price or gas price fluctuations. The paper proposes that fiscal and monetary policy should be engaged to understand the causes of inflation in Nigeria.

Law and economics challenges of natural gas—the hard case of Mexico

Abstract This article addresses the risks and uncertainties for Mexico derived from the excessive dependency on US natural gas. It will take as a reference Btu price fluctuation and the covenants contained on the based contract for sale and purchase of natural gas, particularly in the context of the behaviour displayed by market participants (including governments) during the recent winter storm energy crisis in Texas which consequently forced shortages in Mexico due to a lack of ‘available’ natural gas to produce power (electricity). The research question includes: Should Mexico exploit its vast natural gas resources although it might not be a sustainable or a cost-effective (economically–socially and environmentally) decision? (The curse of the TEX-MEX-NG). Or instead, would it be better to prepare (within the limits of its financial situation) to address the US natural gas price fluctuations, like price hedging? Or a combination of both?

IS THERE A “REVERSE CAUSALITY” FROM NOMINAL FINANCIAL VARIABLES TO ENERGY PRICES?

This paper is aimed at examining the association between energy prices and financial variables, but, in contrast to previous works, it explores the possibility of a reverse causality from financial variables towards energy prices from a global perspective considering the world’s four largest world economic poles (the United States, China, the European Union, and Japan), as well as the prices of oil (Brent) and Natural Gas. In order to study the interaction between energy prices and relevant nominal variables (stock market returns, interest rates, and exchange rates), a Panel Vector Autoregression Analysis (PVAR) is carried out. The empirical finding is that Brent Oil and Natural Gas price fluctuations are positively and highly significantly influenced by lagged interest rates, that is, energy markets are sensitive to monetary policy signals and, most likely, to economic agents’ expectations about inflation. Other empirical results also reveal that: 1) lagged exchange rate fluctuations have a negative and significant effect over the stock market; 2) a positive performance of the stock market has a negative effect on the exchange rate, and: 3) that interest rate markets follow their own dynamics independently of the rest of the model variables.

Effect of equivalence ratio on combustion and emissions of a dual-fuel natural gas engine ignited with diesel

China is the world largest natural gas engine market, and the natural gas price has a large fluctuation range, Natural gas-diesel dual-fuel engine may be one of the options to cope with gas price fluctuations. Effect of equivalence ratio on combustion and emissions with a low compression ratio of 14.2 in a dual-fuel 6 cylinder engine was experimentally studied. Comparison between dual-fuel and spark ignition engine at stoichiometric combustion and same IMEP was conducted. Results show that the gas consumption rate decreases with the increase of equivalence ratio regardless of the strategy in nozzle parameter, exhaust gas recirculation (EGR) rate, injection parameter. Peak heat release rate and exhaust gas temperature increased, and decrease of combustion duration is obtained due to the high equivalence ratio in dual-fuel ignition mode. The gas consumption rate trend of spark ignition mode is similar to that of dual-fuel engine with the increase of equivalence ratio. Dual-fuel engine with low compression ratio of 14.2 run as spark ignition (SI) gas engine at stoichiometric ratio, but the difference lies in the combustion process. The peak heat release rate of dual-fuel engine presents higher value, while the combsution duration of dual-fuel engine is shorter, and the gas consumption rate of dual fuel engine is lower than that of SI engine.

Turbulent times: Uncovering the origins of US natural gas price fluctuations since deregulation

In this paper, we investigate supply and demand shocks in the U.S. natural gas market, focusing on how the effects of these shocks have changed over time. Using a sign-identified structural vector autoregression (SVAR) model that allows for both time-varying parameters and stochastic volatility, we find that supply and demand shocks are the main drivers of natural gas price fluctuations during 1993–2015, with speculative activities playing a minor role during a portion of the sample period. We also find that after the recent shale boom, the supply and demand of natural gas in the US have become somewhat more elastic. An examination of several volatile episodes during the sample period suggest that though natural gas price fluctuations are predominately determined by fundamental factors, supply and demand shocks have significantly evolved over time.

Coordinated Scheduling for Interdependent Electric Power and Natural Gas Infrastructures

The extensive installation of gas-fired power plants in many parts of the world has led electric systems to depend heavily on reliable gas supplies. The use of gas-fired generators for peak load and reserve provision causes high intraday variability in withdrawals from high-pressure gas transmission systems. Such variability can lead to gas price fluctuations and supply disruptions that affect electric generator dispatch, electricity prices, and threaten the security of power systems and gas pipelines. These infrastructures function on vastly different spatio-temporal scales, which prevents current practices for separate operations and market clearing from being coordinated. In this paper, we apply new techniques for control of dynamic gas flows on pipeline networks to examine day-ahead scheduling of electric generator dispatch and gas compressor operation for different levels of integration, spanning from separate forecasting, and simulation to combined optimal control. We formulate multiple coordination scenarios and develop tractable physically accurate computational implementations. These scenarios are compared using an integrated model of test networks for power and gas systems with 24 nodes and 24 pipes, respectively, which are coupled through gas-fired generators. The analysis quantifies the economic efficiency and security benefits of gas-electric coordination and dynamic gas system operation.

A Probe into Impediments of Benefit Gain in Investment Contracts of Oil and Gas Industries

Generally, oil contracts comprise of a set of benefits in their own specific settings. Different technical, sometimes fundamental, factors may lead to imbalance in benefiting from the contract; this is considered as injustice in international relations and a violation to purpose of law. Therefore, seeking strategies to deploy justice in this field and offering strategies to find such strategies is of crucial importance. The present study is aimed at investigating impediments and factors that cause imbalance in equal gains of both parties in these contracts. Identification of these factors and the existing conditions significantly help realization of justice within a framework of rules and regulations. After carrying out deep analyses of oil contract and evaluation of the results, factors influencing this were identified; some of this factors such as contract parties and selection of the type of contract and currency system are related to the parties’ will sand some others are related to conditions such as risks of economic policy making and of economic structures, while there is another case of gas and oil price fluctuations which is separate from the existing conditions or parties’ wills. Therefore, it is of great importance to take these issues into account and to make attempts to follow them toward gaining benefit from oil contracts for oil companies, particularly those in countries where oil is the aim source of income.

Visibility graph network analysis of natural gas price: The case of North American market

Abstract Fluctuations in prices of natural gas significantly affect global economy. Therefore, the research on the characteristics of natural gas price fluctuations, turning points and its influencing cycle on the subsequent price series is of great significance. Global natural gas trade concentrates on three regional markets: the North American market, the European market and the Asia-Pacific market, with North America having the most developed natural gas financial market. In addition, perfect legal supervision and coordinated regulations make the North American market more open and more competitive. This paper focuses on the North American natural gas market specifically. The Henry Hub natural gas spot price time series is converted to a visibility graph network which provides a new direction for macro analysis of time series, and several indicators are investigated: degree and degree distribution, the average shortest path length and community structure. The internal mechanisms underlying price fluctuations are explored through the indicators. The results show that the natural gas prices visibility graph network (NGP-VGN) is of small-world and scale-free properties simultaneously. After random rearrangement of original price time series, the degree distribution of network becomes exponential distribution, different from the original ones. This means that, the original price time series is of long-range negative correlation fractal characteristic. In addition, nodes with large degree correspond to significant geopolitical or economic events. Communities correspond to time cycles in visibility graph network. The cycles of time series and the impact scope of hubs can be found by community structure partition.

Compound option valuation for a coal bed methane development project

There are many uncertainties in coal bed methane (CBM) projects: gas price fluctuations according to oil prices, changes of operational and capital costs, development and production lifetimes and production volume from underground conditions. It is well known that ordinary discounted cash flow method cannot consider these uncertainties. The real option method can evaluate them properly by reflecting managerial flexibility in an uncertain environment. The option valuation for unconventional oil and gas assets is thus important since a management design is the key for a successful development. In this context, a compound real option approach is applied to evaluate a CBM development project. We evaluated defer and abandon options considering the different uncertainties in an exploration stage and the other stage. The analysis results reveal expanded value of the CBM project by stage and option. We can thus provide rich information for decision-makers of energy projects through this approach.

Risk Evaluation and Decision Modelling in Logistics Projects Using a Software Tool

The decision of optimum location in the construction of a logistics (warehouse & distribution) center (or similar facilities) is frequently encountered in the business environment. On a purely logistical level (assuming minimal internal political considerations), this decision must take into account the uncertainties in the calculation of the transportation costs from the central location to peripheral (satellite) stores, the operating costs, the required capital investment and the cost of transportation subject to gas price fluctuations. This article addresses the above questions using an adequate software tool, and provides the methodological framework for the modelling of such business decisions; furthermore, it demonstrates the feasibility and the reliability of the proposed approach and corroborates its findings with a realistic example.

The behaviour mechanism analysis of regional natural gas prices: A multi-scale perspective

This paper analyses the behaviour mechanisms of natural gas prices in North American, Asian and European markets from a multi-scale perspective using the Ensemble Empirical Mode Decomposition and the cross-correlation method. The analytical framework directly measures contributions of the multi-scale components to natural gas price fluctuations and further investigates the dynamic relationships between influential factors (such as crude oil prices, weather and natural gas inventories) and each of multi-scale components of regional natural gas prices. The results show: (1) Emergency events and the short-term disequilibrium between market supply and demand have significant impacts on natural gas prices in North America, while in Japan and Europe, trend terms play a leading role in natural gas price fluctuations. (2) Unlike other markets, the North American natural gas market and the international crude oil market have significant interaction mechanisms. Temperature changes in the winter, rather than in the summer, can cause Henry Hub spot prices to fluctuate. (3) Oil prices play the leading role in affecting Asian and European natural gas prices, having advance effects of one to three months and one to six months, respectively.

Direct Electrochemical Conversion of Nitrogen to Ammonia from Air and Water on Nitride Electro-Catalysts at Ambient Conditions

The use of ammonia as an energy carrier, chemical feedstock and specially fertilizer has triggered increased interest in developing alternative methods for ammonia synthesis in pursuit of decentralized and environmentally friendly approach. Although Ru and Fe within the Haber-Bosch process show good activity for catalysing nitrogen conversion to ammonia, its expense, scarcity, harsh experimental conditions (extremely high temperature and pressure) and sophisticated industrial setup are prohibitive to its decentralization complicating ammonia production in regions with relatively undeveloped infrastructure such as developing countries. Besides, the reliance of this process on natural gases for supplying its necessary hydrogen feedstock not only promotes severe CO2 emission to the environment but it also makes the production of ammonia and accordingly food and biofuels vulnerable to natural gas price fluctuations and political conflict in the oil-rich regions. Nature, on the other hand, reduces atmospheric nitrogen to ammonia by solvated protons and electrons at very moderate conditions, but engineering man-made ammonia to duplicate this in a small-scale approach still remains one of the challenges in modern chemistry. Nonetheless, electro-catalytic ammonia synthesis is a particularly feasible method due to the potential of utilizing renewable energy sources and mild operating conditions. Solid-state electrolytes and polymeric membrane assemblies are the most promising electrochemical approaches developed thus far and have exhibited great success with respect to increased yield of ammonia at ambient conditions. Nevertheless, the yield still remains rather low and the complexity of systems of this sort necessitates a simpler approach for realistic commercialization. In our previous work (Abghoui et al., Physical Chemistry Chemical Physics, 17 (2015) 4909), first-principles (DFT) calculations are used to identify transition metal nitride catalysts that show evidence of being able to produce ammonia electrochemically under small over-potential at ambient conditions. Among a wide range of transition metal nitrides, the (100) facets of rocksalt structure of VN and ZrN were explored as nitride (electro-) catalysts, which are able to suppress the hydrogen evolution reaction and most likely to increase the yield of ammonia production. In the current work and with similar approach, the catalytic activity of the (111) facets of mono-nitrides is investigated through Mars-van Krevelen (MVK) mechanism. This introduces new (electro-) catalysts for direct conversion of nitrogen to ammonia electrochemically at applied potentials of -0.60 V to -1.0 V vs. SHE. Possibility of ammonia formation is also explored via associative, dissociative and mixed associative-dissociative mechanisms on the clean surface of all these nitrides. Besides, stability of these catalysts against poisoning and decomposition is investigated. Upon exposure of the catalyst to atmosphere or electrochemical media, there is a possibility of oxide formation on the surface. The potential required to reduce this oxide layer to water is estimated as well. Results presented here show that both associative and dissociative pathways for ammonia formation is deactivated at the surface of these nitrides due to extremely weak adsorption of N2 on the surface and very high activation barriers of above 2.0 eV for nitrogen splitting, respectively. Therefore, the MVK mechanism is the dominant pathway for effective reduction of nitrogen to ammonia at ambient conditions on these nitride (electro-) catalysts. Hence, with the high abundance of atmospheric nitrogen and by using water as a proton source these promising catalysts could facilitate low-cost, high-yield ammonia production at ambient conditions, with significant benefits to the environment and economy.