Natural Gas Investment Research Articles

Examining the quantile cross-coherence between fossil energy and clean energy: Is the dependence structure changing with the COVID-19 outbreak?

The advent of COVID-19 has markedly affected financial and energy markets. Clean energy positions itself as a feasible substitute for fossil fuels, and the crisis has altered the interdependence of these two counterpart markets. This study uses quantile cross-spectral analysis to investigate the dependence structure features of the fossil and clean energy markets, pre- and post-COVID-19 outbreak, under various market conditions and across different investment horizons. Empirical results suggest an anomalous intensification or inversion in the interaction between fossil and clean energy under extreme market conditions post-COVID-19 outbreak, manifesting either an extraordinarily high or low dependency. Additionally, the asset dependence structure exhibits increased heterogeneity across investment horizons after the COVID-19 outbreak, with short-term structures demonstrating higher volatility, while medium- and long-term structures show similarity. Finally, by generating a dynamic energy portfolio, this paper measures the investment allocation weights of each asset before and after the emergence of COVID-19. Findings indicate an increased need for investment in natural gas, crude oil, and clean energy post-COVID-19 outbreak, suggesting a reduction in coal investment. The analyses aim to assist energy investors in enhancing their economic decision-making processes and refining their portfolio management strategies.

Promoting Investment Incentives by International Financial Institutions: The Case of Fostering Natural Gas Investments in Developing Countries

Promoting Investment Incentives by International Financial Institutions: The Case of Fostering Natural Gas Investments in Developing Countries

Analysis of the energy justice in natural gas distribution with Multiscale Geographically Weighted Regression (MGWR)

Energy justice is violated when particular customers and locations are excluded from a variety of urban energy service distribution. This study explores energy justice in terms of natural gas distribution by providing empirical evidence from 356 neighborhoods of Izmir Metropolitan Area (IMA). The aim is to reveal driving factors of natural gas investment and the spatial reflections of the relationships between investment, and socio-economic and physical characteristics. A global regression model, OLS, and two local spatial regression models, GWR and MGWR, are conducted. Population, income, employment and disadvantaged areas are the significant determinants of natural gas investments. Due to the presence of spatial autocorrelation in OLS residuals, GWR and MGWR are utilized to account for spatial variation in the response variable. Local models are superior to the global model according to AICc values, which are 607.3, 586.7, and 558.5, in OLS, GWR, and MGWR, respectively. MGWR further improves the overall fit with higher R-sq and lower AICc values. The local R-sq values indicate at least 70% variability is explained in 85% of the study area in MGWR, and in 73% of IMA in GWR. Parameters are slightly overestimated in GWR at the mean level. None of the local models are subject to multicollinearity according to local condition numbers, but local variance decomposition proportions indicate the effects of multicollinearity in some observations. Spatial modeling of investments helps to demonstrate local variations of energy injustice and to develop site-specific policies. Population and employment are related to potential customers, which lead to higher investments. Income depends on purchasing power, and there are economic barriers that need to be regulated through subsidies and incentives for the low-income households. Awareness raising policies can also be developed to better inform households about energy alternatives. Disadvantaged areas, either declared as urban transformation areas or currently under urban transformation, lack the natural gas service in general, while the investments can be considered in those areas along with the new development plans.

Perceptions on Early and Expected Effects of Natural Gas Investments on the Coastal Communities of Mtwara and Lindi Regions in Tanzania

This paper examines the early and expected effects of a natural gas investment in the regions of Mtwara and Lindi in Tanzania. Using information from the survey and focus groups, the paper examines the perceptions of the communities and finds mixed social and economic effects. In general, the initial investment in Songosongo pipeline shows some positive outcomes as compared the new investment in the Mtwara-Dar es Salaam pipeline. More of the positive effects are on social services such as the provision of water and health services. Some of the positive outcomes on casual employment were reported in the initial stages of investments in Mtwara. Whereas quantitative data shows that the effects are generally positive, qualitative results show some communities have grievances due to the fact that their earlier expectectation have not been met. In Songosongo, the results show some pecuniary benefits, yet communities reported some environmental pollution, with flourishing seaweeds and dying fish and social problems, such as prostitution due to population increase. In Mtwara, the communities still have high expectations. These preliminary findings call for a follow-up study since the effects are likely to change with time, which justifies the need for a large-scale study in these regions.

Perceptions on Early and Expected Effects of Natural Gas Investments on the Coastal Communities of Mtwara and Lindi Regions in Tanzania

Perceptions on Early and Expected Effects of Natural Gas Investments on the Coastal Communities of Mtwara and Lindi Regions in Tanzania

Spatio-Temporal Modelling of the Change of Residential-Induced PM10 Pollution through Substitution of Coal with Natural Gas in Domestic Heating

Air pollution has been one of the most critical urban problems. Urban energy networks are among the major sources of air pollution, particularly in highly populated urban areas. Residential heating, which is the primary cause of particulate matter (PM) emissions, contributes to the problem through the use of low-quality fuels, such as coal. Natural gas, although a fossil fuel, is a modern, relatively clean, and more efficient alternative in residential energy use, which helps to reduce particulate matter emissions. Coal was widely used in residential heating in İzmir, Turkey, whereas natural gas is a relatively new alternative which started to be used domestically in 2006. Switching from coal and other highly polluting fossil fuels to natural gas in urban energy distribution network has contributed to the alleviation of air pollution in the city in the past decade. Spatiotemporal analyses of the PM10 concentrations, and their relation to the natural gas investments, have been conducted in geographical information systems (GIS). The spatial distribution of the change in PM10 levels has been modeled with ordinary kriging for the 2010–2011 and 2018–2019 winter seasons. Interpolated PM10 surfaces show that there is a significant decrease in the emissions throughout the city in the overall, while the highest levels of decrease are observed in the southern part of the city. Overlaying the interpolated PM10 surfaces and the natural gas pipeline investments enables the demonstration of the mutual relationship between the change in emission levels and the energy distribution network. Indeed, the spatial distribution of the pollution concentrations appears to be parallel to the natural gas investments. The pipeline investments were intensive during the 2010–2018 period in the southern districts when compared the rest of the city. The use of natural gas in residential heating contributed to the decrease in PM10 emissions.

Impact of natural gas consumption on sub-Saharan Africa's CO2 emissions: Evidence and policy perspective

With huge natural gas(NG) reserves and current low (1%) share of non-hydro renewables in Sub-Saharan Africa (SSA), can natural gas offer SSA a low-carbon energy transition? Employing data from 1980 to 2017, this paper investigates the impact of NG consumption on SSA's CO2 emissions using data-driven nonparametric additive regression(NPAR) which can reveal both linear and nonlinear effects. Augmenting NPAR with translog production function(TPF) estimates of interfuel substitution elasticities and bias technological progress over sample period(advantage of TPF), we further provide evidence of the indirect effect of NG consumption on SSA's CO2 emissions through mechanism analysis. From the empirical results, the linear effect shows NG positively impact CO2 emissions while the nonlinear effect indicates a downward decreasing trend (meaning expansion in NG consumption will gradually lower CO2 emissions). Nonlinearly, urbanization and energy efficiency also show positive “inverted U-Shaped” and “downward slopping” respectively meaning sustainable urban energy and energy efficiency practices improvement can lead to CO2 reduction respectively in SSA. The reducing effect of NG consumption on CO2 (the nonlinear effect) is realized through the enhancement of positive bias technological progress of NG over coal and oil but not merely substitution of coal and oil for NG. Technological progress improvement in NG use will also reduce the positive linear effect of urbanization and energy efficiency on CO2 emissions of SSA. Oil is more likely to be substituted for NG than that of coal in SSA. The scenario analysis shows a total of 6.9%, 7.6% and 8.3% of energy conservation is realized in 2022, 2026 and 2030 with a corresponding CO2 reduction of 18.7%, 20.7% and 22.9% respectively for a continuous 10% investment in NG. Institutional, market-oriented and technology challenges hinder NG development among major producers in SSA. Based on the results, several policy measures are put forward to promote SSA's low-carbon energy transition.

A bridge too far? The role of natural gas electricity generation in US climate policy

Natural gas has been promoted as a ‘‘bridge’’ fuel toward a low-carbon future by offering near-term emissions reductions at lower cost. Existing literature is inconclusive on the short-term emissions benefits of more abundant natural gas. The long-lived nature of natural gas infrastructure also threatens to lock in emissions levels well above longer-term targets. If natural gas can offer short-to-medium term benefits, how much of a bridge should we build? Using ARTIMAS, a foresighted computable general equilibrium model of the US economy, we interact scenarios developed by the EMF-34 study group related to abundant natural gas, low-cost renewables, and a carbon tax to examine the role of natural gas in a carbon-constrained future. We find that abundant natural gas alone does not have a significant impact on CO2 emissions. We also find that, under a higher carbon tax, natural gas investment of approximately $10 billion per year declines to zero at a tax of about $40/ton and existing natural gas assets face significant risk of impairment. Last, the presence of abundant natural gas lowers the marginal welfare cost of abating small amounts of CO2 but is likely to raise the cost of abatement levels consistent with common climate objectives. The integrated welfare costs of climate policy depend on how much abatement we must undertake.

Evaluation of Chinese natural gas investment along the Belt and Road Initiative using super slacks-based measurement of efficiency method

Belt and Road Initiative (BRI) provides new opportunity for China to enhance the security of natural gas but with potential challenges. The objective of this study was to scientifically assess China's natural gas investment (NGI) along BRI so as to improve its investment performance. We used the super slacks-based measurement of efficiency (SE-SBM) method to construct a linear programming model for NGI performance considering the resource status, political situation, eco-tech environment, social conditions, market quality, and international cooperation. The mean value of NGI from 2003 to 2013 was used to classify countries along BRI into three clusters, namely high, middle and low efficiency zones. Combined with scale of returns and the dual price analysis of input factors, we put forward the improvement path of NGI in target countries in different zones.

Measuring market power and the efficiency of Alberta's restructured electricity market: An energy‐only market design

AbstractWe measure the degree of market power execution and inefficiencies in Alberta's restructured electricity market. Using hourly wholesale market data from 2008 to 2014, we find that firms exercise substantial market power in the highest demand hours with limited excess production capacity. The degree of market power execution in all other hours is low. Market inefficiencies are larger in the high demand hours and elevate production costs by 6.7%–19% above the competitive benchmark, with an average of 13%. This reflects 2.1% of the average market price across all hours. A recent regulatory policy clarifies that certain types of unilateral market power execution is permitted in Alberta. We find evidence that suggests that strategic behaviour changed after this announcement. Market power execution increased. We illustrate that the observed earnings are often sufficient to promote investment in natural gas based technologies. The rents from market power execution can exceed the estimated capacity costs for certain generation technologies. However, we demonstrate that the energy market profits in the presence of no market power execution are generally insufficient to promote investment in new generation capacity. This stresses the importance of considering both short‐run and long‐run electricity market performance measures.

How do companies decide? Emotional triggers and drivers of investment in natural gas and biogas vehicles

Management research recognizes that companies’ investment decisions are driven not only by objective techno-economic models but also by emotion. Alternative fuel vehicle (AFV) investments offer an appealing context in which to study this interaction in energy source decisions, as they are influenced by a diverse set of analytical and emotional elements ranging from fuel costs to environmental values. This study examines companies’ vehicle investment decision making in Finland and focuses on the interaction between objective facts and subjective feelings along with the process of choosing the vehicles’ energy source.This article is based on an interventionist case study. Switching path analysis technique (SPAT) was used to investigate companies’ switches from conventional fuels to natural gas or biogas. This article contributes to the discussion of AFV adoption by unveiling companies’ decision-making triggers, investment criteria and the use of information sources in the decision-making processes. The findings regarding the decision-making dynamics between these factors are transferable to other energy investments. However, the content of the triggers and drivers varies across contexts and may change over time, because vehicles as investment objects have different meanings for different organizational actors depending on their organizational role, investment use context, and personal preferences.

An Economic Assessment of Low-Carbon Investment Flows in the U.S. Power Sector

This study used the GT NEMS model to analyze how the proposed federal regulation on carbon emissions will impact investments in the U.S. electricity generating capacity at the federal and Census Division level for 2016-2030. Results show that in order to reduce emissions by 32% by 2030, cumulative investments will increase from 399 to 414 billion USD by 2030. Under the scenario which addresses carbon leakage - covering new and existing power plants - cumulative investment will reach 475 billion USD by 2030. Addressing carbon leakage will affect not only the size of the investments but also the direction: when only existing power plants are covered investments in natural gas remains almost unchanged (123 billion USD) relative to the Reference case; while under the scenario that covers all power plants, investment in natural gas will be 24% lower and the investments in renewable will be 64% higher than the Reference. Carbon regulation will produce not only losers and winners among energy sources but also among U.S. states. While the South and Midwest states will experience much higher increase in cumulative investments with respect to the national average; Northeast and West states will reduce their overall investments by 2030 under the policy scenarios.

Gas development in Saudi Arabia assessing the short‐term, demand‐side effects

AbstractThis paper analyses the short‐term, demand‐side effects of a large natural gas investment programme currently being implemented in Saudi Arabia using input–output analysis. Saudi Arabia opened gas exploration and production projects to national and international companies in order to attract substantial new investment in the exploration and production of gas non‐associated with oil output. The expected additional gas production is intended for domestic use, thus freeing for export some of the oil that is currently being used to supply domestic energy. Increased oil exports would generate additional foreign exchange income to help fund further diversification of the Saudi economy. The primary outcome of the input–output analysis shows that the strongest positive impact would be realised by the Saudi construction and manufacturing sectors and that a great deal of the equipment needed for increased gas production would have to be imported. A shortage of educated Saudis may curtail success or require use of more foreign skilled expatriates. So far, Saudi Arabia is having significant difficulties finding and expanding the output of non‐associated gas.

Energy policy and cooperation in Southeast Asia: The history, challenges, and implications of the trans-ASEAN gas pipeline (TAGP) network

This article explores the proposed multibillion dollar Trans-ASEAN Gas Pipeline (TAGP) network in Southeast Asia, focusing on the interests that have promoted the TAGP and why. Based on extensive field research, textual analysis of government reports, and more than 100 research interviews at government institutions, multilateral development banks, universities, consulting firms, energy companies, and nongovernmental organizations, this article assesses the challenges facing the TAGP in terms of promotion, implementation, and operation. It explores the genesis of the TAGP project and the drivers pushing Southeast Asian investment in natural gas, with a special emphasis on the development needs of the region. It also investigates the numerous technical, economic, legal, political, social, and environmental impediments to the TAGP project. The article concludes that the rhetoric of regional energy cooperation touted by the Association of Southeast Asian Nations (ASEAN) does not match its actual practice, and that in many cases discussions of regionalism and energy security are intended to obscure opportunistic thinking within individual countries.

Monte Carlo valuation of natural gas investments

In this evaluation of energy assets related to natural gas, our particular focus is on a base load natural gas combined cycle power plant and a liquefied natural gas facility in a realistic setting. We also value several American-type investment options following the least squares Monte Carlo approach. We calibrate mean-reverting stochastic processes for gas and electricity prices by using data from NYMEX NG futures contracts and the Spanish wholesale electricity market, respectively. Additional sources of uncertainty concern the initial investment outlay, or the option's time to maturity, or the cost of CO 2 emission permits.

Natural gas investment opportunities in Asia

Natural GasVolume 13, Issue 3 p. 1-5 Article Natural gas investment opportunities in Asia David Gray, David Gray David Gray is vice president of Tenneco Energy International.Search for more papers by this author David Gray, David Gray David Gray is vice president of Tenneco Energy International.Search for more papers by this author First published: October 1996 https://doi.org/10.1002/gas.3410130302 AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Volume13, Issue3October 1996Pages 1-5 RelatedInformation