Energy trading
A shift in perspective
As far as the electricity market is concerned, the EU emissions trading scheme is aimed only at the generation side of the market. But end users also affect carbon emissions levels. This could represent a missed opportunity. Here, Oliver Rix, Phil Grant…
Ethanol
The production of ethanol – a component of gasoline – is growing fast, which has led to the imminent launch of two ethanol futures contracts and a joint production venture involving Sempra Energy. By Joe Marsh
A bid for power
Clock auctions are a fairly recent method for utilities of procuring electricity from suppliers, but only New Jersey has an established process. Yet Ohio and Illinois are showing interest. Joe Marsh reports
Smoke without fire
The market for US financial coal swaps may be starting to show a little potential, but some major obstacles still remain before it catches alight – not least a widely accepted price index. By Joe Marsh
If the cap fits...
Legal compliance seems the only way to achieve cuts in carbon dioxide emissions. Europe is leading the way, but the US is some way from a similar approach, despite a regional initiative sparking some interest. Joe Marsh reports
Blending the rules
The speed of decline of North Sea crude raises fresh concerns over the suitability of the North Sea as a benchmark, and to worries over the value of long-dated derivatives contracts. By Stella Farrington
Bridging the gas gap
Volatility in the natural gas markets shows no sign of any let-up, which means that managing basis risk at Henry Hub continues to spur demand for increasingly innovative derivatives products. Catherine Lacoursiere reports
Clear intentions
The Alberta Watt Exchange in Calgary is already clearing over-the-counter electricity contracts and from next year will be able to clear natural gas as well. But how much liquidity will it attract? Joe Marsh reports
Avoiding the gas work
Ferc is exploring whether gas storage inventory details should be posted on adaily basis. How will this affect the development of the embryonic natural gasstorage swaps market? Paul Lyon reports
Auction advances
The Commonwealth of Virginia in the US has just completed an innovative auctionof nitrogen oxide emissions credits thanks to advice from Amerex and George MasonUniversity. Paul Lyon reports
Pulp friction
In the latest of Energy Risk’s series of profiles featuring energy users’ riskmanagement and hedging strategies, Paul Lyon talks to Swedish pulp and papercompany SCA about how it deals with its sizeable energy exposures
The standard is set
Continuing last month’s focus on documentation under which commoditiesare traded on the UK’s National Balancing Point and Belgium’s ZeebruggeHub, using Isda’s European Gas Annex. By Agnes Bizet and Kevin Wulwik
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
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
Unlimited liability
Potential liabilities for European nuclear operators are set to rise sharply.Financial guarantees for nuclear operators will have to be restructured. Aregovernments and the insurance industry up to the task? MariaKielmas reports
Rethinking regulation
Market manipulation and inaccurate pricing led to the reregulation of Ontario’s electricity market. But at the right price, the Canadian province may see a revival of competition, reports CatherineLacoursière
Storage strategies
Abstract: Salt-dome storage facilities are a flexible way to take advantage of arbitrage opportunities in the natural gas market. Kislay Sinha and colleagues at Arizona Public Service discuss the valuation of a storage asset, examine ways of capturing…
Flying high
The US airline industry is struggling due to high jet fuel prices. Accordingly, one trade association is urging the Bush administration to change its oil purchasing strategy. By Paul Lyon
Protection treaty
Matthew Saunders , of law firm DLA, introduces the bilateral investment treaty which, though often overlooked, can be an effective method of affording legal protection for energy investments and minimising energy project risk
Capital calculations
The latest Committee of Chief Risk Officers white paper offers capital adequacy guidelines for energy merchants. But why should energy firms perform these calculations? Glyn Holton asks whether the CCRO has missed the point
In pursuit of the eurobarrel
The markets say they do not want oil prices in euros. But denominating internationalcrude prices in euros is a political ambition the European Union seems determinedto pursue – starting with Russia. MariaKielmas reports
Contract killing
The California Public Utilities Commission wants to renegotiate long-term contractsthe Department of Water Resources entered into during the state’s energycrisis. So far, Ferc has been less than receptive to the request. By Paul Lyon
Gas prices hit fertiliser industry
North American fertiliser producers are struggling for survival, thanks to the high cost of natural gas. Some have turned to hedging and pre-purchasing their gas, but such measures may not be sufficient. Paul Lyon reports