Relationship between uncertainty in the oil and stock markets before and after the shale gas revolution: Evidence from the OVX, VIX, and VKOSPI volatility indices.

We investigate the relationship between crude oil prices and stock markets. Unlike prior studies, we use implied volatility indices and evaluate the change in the relationship between the volatility indices through a sub-period analysis. Specifically, we examine the causal relationships among the crude oil, S&P 500 index, and KOSPI 200 index volatilities by using the autoregressive distributed lag (ARDL) bounds and the Toda-Yamamoto Granger causality tests. In addition, a BEKK-GARCH model is employed to enhance the robustness of the causality test results. These experiments indicate that the OVX and VIX show bi-directional causality in the period that includes the shale gas revolution and no causality in the period that does not. Further, the OVX Granger causes the VKOSPI in the former period, but there is no causality between them in the latter period. Finally, we find strong unidirectional causality from the VIX to the VKOSPI in both sub-periods. These results have important implications for the analysis of portfolio risk management and for assisting energy policymakers and traders in making effective decisions and investments, respectively.

Russia-EU gas game analysis: evidence from a new proposed trade model.

This paper represents a new proposed trade model of "Intercountries Trade Force (ITF)" which is inspired by Intermolecular Interaction Forces in chemical sciences, and has potential to compensate for the deficiencies of the gravity trade model proposed by Jan Tinbergen in 1962. The main differences between our new model and the earlier gravity trade theory are (i) there is a time-variant variable called the gravity index (GI) which means that the earlier gravity theory was treated as only a variable in our new proposed model and (ii) our new proposed trade model has a higher chance of adoption in the real trade world rather than the earlier gravity trade model which always needs to be expanded by scholars. In order to empirically test our new proposed trade model, we applied it in an empirical econometric model to analyze the Russian gas export to the EU member states, not explored earlier. Results revealed that our new trade proposed model adjusts with the empirical energy trade pattern.

An econometric analysis of inter-fuel substitution in energy sector of Pakistan.

Hydroelectricity is playing a significant role in lowering CO2 emissions as it contributes a desirable platform to fulfill the growing energy demand while releasing fewer GHGs in comparison to other fossil fuels. Utilizing the trans-log production model, this study is an endeavor to investigate the potential inter-fuel substitution by estimating the substitution elasticity between pairs of coal, natural gas, petroleum, and hydroelectricity to suggest policy for Pakistan to achieve higher economic growth, environmental sustainability, and increased energy access by its citizens. Over the period 1980-2013, the ridge regression was approved to estimate the model's parameters. The findings show that the output elasticity of hydroelectricity is the highest and all the factor inputs are substitutes; whereas, the elasticity of substitution between coal vs. natural gas is the highest, thus suggesting an increased focus on the coal extraction to switch from the alternative usage of gas. Moreover, encouragement of energy subsidy programs, coupled with taxes and infrastructural developments, can be adapted to redirect technology towards hydroelectricity. Hence, the result that hydroelectricity is substituted for all fuels submit that Pakistan has the potential to switch from petroleum to cleaner energy; therefore, reducing the adverse environmental implications and to retain the ability to fuel its energy sector.

Shale Gas Implications for C2-C3 Olefin Production: Incumbent and Future Technology.

Substantial natural gas liquids recovery from tight shale formations has produced a significant boon for the US chemical industry. As fracking technology improves, shale liquids may represent the same for other geographies. As with any major industry disruption, the advent of shale resources permits both the chemical industry and the community an excellent opportunity to have open, foundational discussions on how both public and private institutions should research, develop, and utilize these resources most sustainably. This review summarizes current chemical industry processes that use ethane and propane from shale gas liquids to produce the two primary chemical olefins of the industry: ethylene and propylene. It also discusses simplified techno-economics related to olefins production from an industry perspective, attempting to provide a mutually beneficial context in which to discuss the next generation of sustainable olefin process development.

Association Between Energy Prices and US Hospital Patient Outcomes.

OBJECTIVE: To evaluate associations between changing energy prices and US hospital patient outcomes. METHODS: Generalized estimating equations were used to analyze relationships between changes in energy prices and subsequent changes in hospital patient outcomes measures for the years 2008 through 2014. Patient outcomes measures included 30-day acute myocardial infarction, heart failure, and pneumonia mortality rates, and 30-day acute myocardial infarction, heart failure, and pneumonia readmission rates. Energy price data included state average distillate fuel, electricity and natural gas prices, and the US average coal price. All of the price data were converted to 2014 dollars using Consumer Price Index multipliers. RESULTS: There was a significant positive association between changes in coal price and both short-term (P = 0.029) and long-term (P = 0.017) changes in the 30-day heart failure mortality rate. There was a similar significant positive association between changes in coal price and both short-term (P <0.001) and long-term (P = 0.002) changes in the 30-day pneumonia mortality rate. Changes in coal prices also were positively associated with long-term changes in the 30-day myocardial infarction readmission rate (P < 0.001). Changes in coal prices (P = 0.20), natural gas prices (P = 0.040), and electricity prices (P = 0.040) were positively associated with long-term changes in the 30-day heart failure readmission rate. CONCLUSIONS: Changing energy prices are associated with subsequent changes in hospital mortality and readmission measures. In light of these data, we encourage hospital, health system, and health policy leaders to pursue patient-support initiatives, energy conservation programs, and reimbursement policy strategies aimed at mitigating those effects.

Hydro, wind and solar power as a base for a 100% renewable energy supply for South and Central America.

Power systems for South and Central America based on 100% renewable energy (RE) in the year 2030 were calculated for the first time using an hourly resolved energy model. The region was subdivided into 15 sub-regions. Four different scenarios were considered: three according to different high voltage direct current (HVDC) transmission grid development levels (region, country, area-wide) and one integrated scenario that considers water desalination and industrial gas demand supplied by synthetic natural gas via power-to-gas (PtG). RE is not only able to cover 1813 TWh of estimated electricity demand of the area in 2030 but also able to generate the electricity needed to fulfil 3.9 billion m3 of water desalination and 640 TWhLHV of synthetic natural gas demand. Existing hydro dams can be used as virtual batteries for solar and wind electricity storage, diminishing the role of storage technologies. The results for total levelized cost of electricity (LCOE) are decreased from 62 €/MWh for a highly decentralized to 56 €/MWh for a highly centralized grid scenario (currency value of the year 2015). For the integrated scenario, the levelized cost of gas (LCOG) and the levelized cost of water (LCOW) are 95 €/MWhLHV and 0.91 €/m3, respectively. A reduction of 8% in total cost and 5% in electricity generation was achieved when integrating desalination and power-to-gas into the system.

The assessment of health impacts and external costs of natural gas-fired power plant of Qom.

The external health damage costs of the combined cycle natural gas-fired power plant of Qom were investigated via the simplified impact pathway approach. Emitted particulate matter (PM10) and gaseous pollutants (NO x , CO, and SO2) from the power plant stack were measured The health effects and related costs were estimated by QUERI model from AirPacts according to the emissions, source and stack parameters, pollutant depletion velocities, exposure-response functions, local and regional population density, and detailed meteorological data. The results showed that the main health effect was assigned to the nitrate as restricted activity days (RAD) with 25,240 days/year. For all pollutants, the maximum health damage costs were related to the long-term mortality (49 %), restricted activity days (27 %), and chronic bronchitis (21 %). The annual health damage costs were approximately 4.76 million US$, with the cost being 0.096 US per kWh of generating electricity. Although the health damage costs of gas-fired power plant were lower than those of other heavy fuels, it seems essential to consider the health and environmental damages and focus on the emission control strategies, particularly in site selection for the new power plants and expanding the current ones.

A Techno-Economic Assessment of Hybrid Cooling Systems for Coal- and Natural-Gas-Fired Power Plants with and without Carbon Capture and Storage.

Advanced cooling systems can be deployed to enhance the resilience of thermoelectric power generation systems. This study developed and applied a new power plant modeling option for a hybrid cooling system at coal- or natural-gas-fired power plants with and without amine-based carbon capture and storage (CCS) systems. The results of the plant-level analyses show that the performance and cost of hybrid cooling systems are affected by a range of environmental, technical, and economic parameters. In general, when hot periods last the entire summer, the wet unit of a hybrid cooling system needs to share about 30% of the total plant cooling load in order to minimize the overall system cost. CCS deployment can lead to a significant increase in the water use of hybrid cooling systems, depending on the level of CO2 capture. Compared to wet cooling systems, widespread applications of hybrid cooling systems can substantially reduce water use in the electric power sector with only a moderate increase in the plant-level cost of electricity generation.

Life cycle air emissions impacts and ownership costs of light-duty vehicles using natural gas as a primary energy source.

This paper aims to comprehensively distinguish among the merits of different vehicles using a common primary energy source. In this study, we consider compressed natural gas (CNG) use directly in conventional vehicles (CV) and hybrid electric vehicles (HEV), and natural gas-derived electricity (NG-e) use in plug-in battery electric vehicles (BEV). This study evaluates the incremental life cycle air emissions (climate change and human health) impacts and life cycle ownership costs of non-plug-in (CV and HEV) and plug-in light-duty vehicles. Replacing a gasoline CV with a CNG CV, or a CNG CV with a CNG HEV, can provide life cycle air emissions impact benefits without increasing ownership costs; however, the NG-e BEV will likely increase costs (90% confidence interval: $1000 to $31 000 incremental cost per vehicle lifetime). Furthermore, eliminating HEV tailpipe emissions via plug-in vehicles has an insignificant incremental benefit, due to high uncertainties, with emissions cost benefits between -$1000 and $2000. Vehicle criteria air contaminants are a relatively minor contributor to life cycle air emissions impacts because of strict vehicle emissions standards. Therefore, policies should focus on adoption of plug-in vehicles in nonattainment regions, because CNG vehicles are likely more cost-effective at providing overall life cycle air emissions impact benefits.

Regional ozone impacts of increased natural gas use in the Texas power sector and development in the Eagle Ford shale.

The combined emissions and air quality impacts of electricity generation in the Texas grid and natural gas production in the Eagle Ford shale were estimated at various natural gas price points for the power sector. The increased use of natural gas in the power sector, in place of coal-fired power generation, drove reductions in average daily maximum 8 h ozone concentration of 0.6-1.3 ppb in northeastern Texas for a high ozone episode used in air quality planning. The associated increase in Eagle Ford upstream oil and gas production nitrogen oxide (NOx) emissions caused an estimated local increase, in south Texas, of 0.3-0.7 ppb in the same ozone metric. In addition, the potential ozone impacts of Eagle Ford emissions on nearby urban areas were estimated. On the basis of evidence from this work and a previous study on the Barnett shale, the combined ozone impact of increased natural gas development and use in the power sector is likely to vary regionally and must be analyzed on a case by case basis.

Emissions implications of future natural gas production and use in the U.S. and in the Rocky Mountain region.

Enhanced prospects for natural gas production raise questions about the balance of impacts on air quality, as increased emissions from production activities are considered alongside the reductions expected when natural gas is burned in place of other fossil fuels. This study explores how trends in natural gas production over the coming decades might affect emissions of greenhouse gases (GHG), volatile organic compounds (VOCs) and nitrogen oxides (NOx) for the United States and its Rocky Mountain region. The MARKAL (MARKet ALlocation) energy system optimization model is used with the U.S. Environmental Protection Agency's nine-region database to compare scenarios for natural gas supply and demand, constraints on the electricity generation mix, and GHG emissions fees. Through 2050, total energy system GHG emissions show little response to natural gas supply assumptions, due to offsetting changes across sectors. Policy-driven constraints or emissions fees are needed to achieve net reductions. In most scenarios, wind is a less expensive source of new electricity supplies in the Rocky Mountain region than natural gas. U.S. NOx emissions decline in all the scenarios considered. Increased VOC emissions from natural gas production offset part of the anticipated reductions from the transportation sector, especially in the Rocky Mountain region.

Limited impact on decadal-scale climate change from increased use of natural gas.

The most important energy development of the past decade has been the wide deployment of hydraulic fracturing technologies that enable the production of previously uneconomic shale gas resources in North America. If these advanced gas production technologies were to be deployed globally, the energy market could see a large influx of economically competitive unconventional gas resources. The climate implications of such abundant natural gas have been hotly debated. Some researchers have observed that abundant natural gas substituting for coal could reduce carbon dioxide (CO2) emissions. Others have reported that the non-CO2 greenhouse gas emissions associated with shale gas production make its lifecycle emissions higher than those of coal. Assessment of the full impact of abundant gas on climate change requires an integrated approach to the global energy-economy-climate systems, but the literature has been limited in either its geographic scope or its coverage of greenhouse gases. Here we show that market-driven increases in global supplies of unconventional natural gas do not discernibly reduce the trajectory of greenhouse gas emissions or climate forcing. Our results, based on simulations from five state-of-the-art integrated assessment models of energy-economy-climate systems independently forced by an abundant gas scenario, project large additional natural gas consumption of up to +170 per cent by 2050. The impact on CO2 emissions, however, is found to be much smaller (from -2 per cent to +11 per cent), and a majority of the models reported a small increase in climate forcing (from -0.3 per cent to +7 per cent) associated with the increased use of abundant gas. Our results show that although market penetration of globally abundant gas may substantially change the future energy system, it is not necessarily an effective substitute for climate change mitigation policy.

Cost-effective choices of marine fuels in a carbon-constrained world: results from a global energy model.

The regionalized Global Energy Transition model has been modified to include a more detailed shipping sector in order to assess what marine fuels and propulsion technologies might be cost-effective by 2050 when achieving an atmospheric CO2 concentration of 400 or 500 ppm by the year 2100. The robustness of the results was examined in a Monte Carlo analysis, varying uncertain parameters and technology options, including the amount of primary energy resources, the availability of carbon capture and storage (CCS) technologies, and costs of different technologies and fuels. The four main findings are (i) it is cost-effective to start the phase out of fuel oil from the shipping sector in the next decade; (ii) natural gas-based fuels (liquefied natural gas and methanol) are the most probable substitutes during the study period; (iii) availability of CCS, the CO2 target, the liquefied natural gas tank cost and potential oil resources affect marine fuel choices significantly; and (iv) biofuels rarely play a major role in the shipping sector, due to limited supply and competition for bioenergy from other energy sectors.