The goals of the paper are as follows: i) review some qualitative properties of oil and gas prices in the last 15 years; ii) propose some mathematical elements towards a definition of mean reversion that would not be reduced to the form of the drift in a stochastic differential equation; iii) conduct econometric tests in order to conclude whether mean reversion still exists in the energy commod...

We analyze policies to promote renewable sources of electricity. A renewable portfolio standard raises electricity prices and primarily reduces gas-fired generation. A “knee” of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity p...

Control decisions for gas storage facilities are made in the face of extreme uncertainty over future natural gas prices on world markets. We examine the problem faced by owners of storage contracts of how to manage the injection/withdrawal schedule of gas, given past price behavior and a predictive model of future prices. Real options theory provides a framework for making such decisions. We de...