Feature
Northwest in excess
The Bonneville Power Administration’s power buyback scheme to tackle electricity shortages in the US Pacific Northwest in 2001 has worked rather too well. The region was left with bankrupt aluminium producers and a surplus of power that is not proving…
Hedging on the fly
In the first of a series of articles profiling energy users and their risk managementstrategies, we take a look at Texas-based Southwest Airlines, one of the mostactive hedgers in the aviation industry. By Joe Marsh
Where gas is keener
Fearing its competitiveness is slipping, the Canadian natural gas industry islobbying for pipeline rates of return and tax policies on a par with the US.By Catherine Lacoursière
A poor standard
Rating agency Standard & Poor’s has recently released guidelines totest liquidity that could be an efficient probe into company finances. BrettHumphreys looks at how S&P has arrived at its calculations, asks if the liquiditymeasures are too conservative…
A natural standard
In the first part of a two-part series, Agnes Bizet and KevinWulwik highlightthe main issues to consider when trading under Isda’s European Gas Annex,including a close look at default events
Customerservice
Gas trading technology vendors are finding that continued market volatility is attracting clients keen to manage their exposures. But new entrants are forcing them to pick a model and stick with it. By Paul Lyon
Made in America
Bank of America has arguably built one of the most successful North American gas trading desks. Here Paul Lyon talks with Eric Nobileau, the bank’s global head of commodity sales
Prebon sets up coal desk
London-based broker Prebon may have failed in its bid to lure three coal traders from fellow broker Icap, but it is continuing to build a coal team. In mid-May, Sharon Millar, who previously traded paper and physical coal at UK utility RWE Innogy, joined…
Fair weather future
Judging from the success of the weather risk market in the Asia-Pacific region,the Chicago Mercantile Exchange couldn’t have picked a more opportune timeto launch Japanese weather futures. By Paul Lyon
The waiting game
The Italian power market has finally opened to competition, but how long willenergy users have to wait until they can trade on the new electricity exchange? Joe Marsh reports
The cost of optimism
Petroleum engineers and financial regulators have never spoken the same language,as the recent Royal Dutch/Shell debacle has shown. And this has led to confusionover state oil reserves. By Maria Kielmas
Nord Pool’s back-up
Nord Pool Clearing is the first pure electricity clearing house to obtain capitalsupport through insurance to cover defaults by its trading counterparties. Areenergy companies set to follow suit? Joe Marsh reports
Simulating spots
Abstract: The use of Monte Carlo simulation is becoming increasingly importantin energy trading and risk management. Here, Les Clewlow and ChrisStrickland present the first in a series of articles looking at the implementation of simulationtechniques and…
Heroes or cowboys?
Banks and energy companies alike are sceptical about the role that hedge fundsplay in energy markets. Are they really an aid to market stability, or is theirpresence compounding market volatility? Paul Lyon reports
Price wars
Ferc is preparing to analyse the results of its survey on energy price reporting.But the American Public Gas Association is concerned that a voluntary reportingscheme cannot guarantee reliable indexes. By Paul Lyon
Heart broker
A bitter dispute involving an employment contract, three coal brokers and a claimfor £2 million in damages has highlighted the importance of observing contractuallaw when hiring and firing. By James Ockenden
The right charge
Savvy firms now accept risk is inevitable. Those that use their risk capitalefficiently outperform those that don’t. Brett Humphreys looks at alternativeinvestments to find out what the right risk-adjusted return on capital chargesmight be
Dollar distress
Scottish Power has announced a £400 million cash windfall through its currencyhedging programme. Others have not been so lucky – but everyone is nowwaking up to currency trading. By James Ockenden
Crude protection
Oil producers are divided over the value of hedging oil prices. Are investorslooking for high returns and high risk, or more stable revenues? And how muchdoes hedging actually boost an oil producer’s value? By Joe Marsh
Using a square peg
Hedging load exposures is a complex issue, and plumping for hedging the expectedvolume is unlikely to be the best solution. Brett Humphreys and RahulGill showthat sometimes, the best hedge of a shaped position is an over-hedge
European companies outline concerns over emissions trading
Corporates are expressing concern at the ramifications of the European UnionEmissions Trading Scheme – just as EU member states finalise their nationalallocation plans. By Paul Lyon
Deutsche asks SEC to clarify guidelines
Deutsche Bank claims the SEC’s guidelines for estimating oil reserves are outdated. And Shell, unsurprisingly,also believes that the SEC should clarify its reserve rules. By Joe Marsh