The top traders, investors and managers tell why energy convergence is still a pipe dream.
[Graphic tables included in the print version of the Fortnightly are not included in this...
1 For examples of the degree to which buildings have conservation features such as multiple glazing and exterior or interior shading and awnings the reader is referred to "A Look at Commercial Buildings in 1995: Characteristics, Energy Consumption and Energy Expenditures," DOE/EIA - 0625 (95), October 1998. For information on conservation practice in the residential sector see "A Look at Residential Energy Consumption in 1997," DOE/EIA - 0632 (97), November 1999. This study interestingly enough reported that such conservation practices as lowered thermostat settings increases with a higher household income level. The U.S. use per customer may rise because of larger houses when income rises but conservation awareness increases as well. For evidence of the degree to which the research community has disregarded conservation effects the reader should compare this later volume with such predecessor volumes based on research conducted in the 1980s as "Housing Energy Consumption and Expenditures 1993," DOE/EIA - 0512 (94), October 1995. For examples of conservation practices in the manufacturing sector the reader is referred to "Manufacturing Consumption of Energy 1994," DOE/EIA - 0512 (94), December 1997.
2 EPRI, "Energy Markets and Generation Response," Quarterly Update on New Power Plants, December 2000.
3 According to a recent report, 15,000 MW of generation alone is planned for the combined market of PJM, NEPOOL and NYPP in 2001, much of it in Massachusetts. See, , Feb. 12, 2001. Yet much of this generation is understood to be capable of using either natural gas or oil as a generation fuel. Thus, if natural gas and power prices stay at elevated levels, and if new natural gas infrastructure is slow in coming online, then this new generation is very likely to come online later than 2001, and is likely to be using oil and not natural gas when it does happen.
4 , "Anadarko exec paints dim picture for growth", Feb. 16, 2001.
5 , "Mexico expected to remain a net importer of gas", Feb. 14, 2001.
6 For a discussion of price effects and extensive references to the literature see John H. Herbert, , Praeger, New York, 1992. For a more recent discussion of price effects see EPRI, "Energy Markets and Generation Response, Lower Demand at High Prices-A Helpful Factor in Today's Very Tight Natural Gas Market," January 2001.
7 This is the average effect for a year. The effect will be much greater in the winter and, of course, will be much smaller in the summer.
8 Energy Information Administration, "Short-term Energy Outlook," February 2001. We use the EIA estimates of price of $7.75/Mcf for 2000 and $10.07/Mcf for 2001 as well as their 2001 estimate of 5,176 Bcf/year and 3,460 Bcf/year estimates for residential and commercial sector demands, respectively in performing these calculations.
9 One Mcf of natural gas is roughly equivalent to one MMBtu, but in actuality 1,000 cubic feet equals 1.027 million Btu of gas.
10 Storage levels were still above levels in November 1996. Storage levels in 1996 were low because enormous withdrawals from storage had occurred in the previous cold winter of 1995/1996. Storage levels