Natural Gas and U.S. Economic Activity

Arora, Vipin; Lieskovsky, Jozef

doi:10.5547/01956574.35.4.8

Cited by 6 publications

(1 citation statement)

References 6 publications

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“…It is widely believed that the electricity demand is inevitably influenced by the variations of economy growth and seasonal changes [ 51 ]. As the main fuel consumption of China’s electricity production, the coal demand changes according to the fluctuations of economic growth and seasonal changes.…”

Section: Resultsmentioning

confidence: 99%

Quantifying the Resilience of Coal Energy Supply in China Toward Carbon Neutrality

Sun,

Wen,

Dai

et al. 2024

Research

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Facing the challenge of achieving the goal of carbon neutrality, China is decoupling the currently close dependence of its economy on coal use. The energy supply and demand decarbonization has substantial influence on the resilience of the coal supply. However, a general understanding of the precise impact of energy decarbonization on the resilience of the coal energy supply is still lacking. Here, from the perspective of network science, we propose a theoretical framework to explore the resilience of the coal market of China. We show that the processes of increasing the connectivity and the competition between the coal enterprises, which are widely believed to improve the resilience of the coal market, can undermine the sustainability of the coal supply. Moreover, our results reveal that the policy of closing small-sized coal mines may not only reduce the safety accidents in the coal production but also improve the resilience of the coal market network. Using our model, we also suggest a few practical policies for minimizing the systemic risk of the coal energy supply.

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Section: Resultsmentioning

confidence: 99%

Quantifying the Resilience of Coal Energy Supply in China Toward Carbon Neutrality

Sun,

Wen,

Dai

et al. 2024

Research

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Interaction effects of corporate hedging activities for a multi-risk exposure: evidence from a quasi-natural experiment

Hang

Geyer‐Klingeberg

Rathgeber

et al. 2020

Rev Quant Finan Acc

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This study analyzes the interaction effects of corporate hedging activities of electric utility firms facing a manifold risk exposure consisting of several market price risks. We employ 16 recent introductions of markets for trading electricity derivatives as a quasi-natural experiment. The results show that electric utilities generally favor domestic markets for trading electricity derivatives, which might be reduced to their usual high market power and the related good predictability of electricity prices. As a consequence, electricity output hedging eliminates a major part of overall market risk. Further, we identify several spillover effects of electricity output hedging: The sensitivities to input commodity prices decrease, while the sensitivities to foreign exchange rates and interest rates increase. Furthermore, electricity output hedging increases debt capacities and the availability of internal funds. These results are relevant for electric utility firms, market operators, and policy makers, since the selective presence of derivatives markets might let financing policies globally diverge.

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Have European natural gas prices decoupled from crude oil prices? Evidence from TVP-VAR analysis

Szafranek

Rubaszek

2023

Studies in Nonlinear Dynamics &Amp; Econometrics

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Unprecedented increases in European natural gas prices observed between late 2021 and mid 2022 raise a question about the sources of these events. In this article we investigate this topic using a time-varying parameters structural vector autoregressive model for crude oil, US and European natural gas prices. This flexible framework allows us to measure how disturbances specific to the analyzed markets propagate within the system and how this propagation mechanism evolves in time. Our findings are fourfold. First, we show that oil prices are hardly affected by shocks specific to natural gas markets, whether in the US or Europe. Second, we demonstrate that oil shocks have limited impact on US natural gas prices, which points to the decoupling of both markets. Third, we evidence that over longer horizons natural gas prices in Europe are still mostly determined by oil shocks, with idiosyncratic disturbances leading to short-lived decoupling of both commodity prices. Fourth, we illustrate that along the gradual shift from oil price indexation to gas-on-gas competition, the contribution of idiosyncratic shocks to European natural gas prices has increased. Nonetheless, we discuss why the notion that EU natural gas and crude oil prices have decoupled might be premature.

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Natural Gas and U.S. Economic Activity

Cited by 6 publications

References 6 publications

Quantifying the Resilience of Coal Energy Supply in China Toward Carbon Neutrality

Quantifying the Resilience of Coal Energy Supply in China Toward Carbon Neutrality

Interaction effects of corporate hedging activities for a multi-risk exposure: evidence from a quasi-natural experiment

Have European natural gas prices decoupled from crude oil prices? Evidence from TVP-VAR analysis

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