The history of natural gas wellhead and pipeline regulation, deregulation and regulatory reforms are discussed. These reforms brought natural gas shortages and pipeline inefficiencies to an end. They also created an economic platform that could support unanticipated developments in the supply and costs of domestic natural gas. Such unanticipated developments emerged in the last few years as several technological innovations came together to make it commercially attractive to development US shale gas deposits located deep in the earth. How and why shale gas supplies will lead to dramatic changes in the United States' energy future with appropriate environmental regulatory reforms are discussed.

Economic evaluations of alternative electric generating technologies typically rely on comparisons between their expected “levelized cost” per MWh supplied. I demonstrate that this metric is inappropriate for comparing intermittent generating technologies like wind and solar with dispatchable generating technologies like nuclear, gas combined cycle, and coal. It overvalues intermittent generating technologies compared to dispatchable base load generating technologies. It also likely overvalues wind generating technologies compared to solar generating technologies. Integrating differences in production profiles, the associated variations in wholesale market prices of electricity, and life-cycle costs associated with different generating technologies is necessary to provide meaningful comparisons between them.

This paper examines empirically the importance of relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities, using data for 277 coal contracts. For each contract, measures of the duration of contractual commitments agreed to by the parties at the contract execution stage and measures of the importance of relationship specific investments are developed. The results provide strong support for the view that buyers and sellers make longer commitments to the terms of future trade at the contract execution stage, and rely less on repeated bargaining, when relationship-specific investments are more important.

[This paper examines the importance of specific relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities. Data for 277 coal contracts are used to perform the analysis. The results provide strong support for the view that buyers and sellers make longer commitments to the terms of future trade at the contract execution stage, and rely less on repeated bargaining, when relationship-specific investments are more important.]

The typical industrial organization economist interested in examining the behavior of firms in market environments characterized by small numbers does not approach his task with any unified set of analytical tools which one could call the theory of oligopoly. Instead, he comes armed with a whole smorgasbord of formal models, ad hoc models, case-study information, and vague notions concerning the impact of business psychology and sociology. The various theories, whether they be formal or informal, are based on a bewildering collection of a priori behavioral assumptions, formal mathematics, hard case-study information, casual empiricism, hand waving, and as much as possible of the traditional theory of the atomistic competitive firm. For those of us interested in public policy analysis this state of affairs is troublesome. On the onie hand, many of the interesting policy issues arise in markets dominated by a small number of large firms and therefore some viable alternative to the competitive model is desirable. On the other hand, existing formal models often do not provide a useful framework for policy analysis. This essay proceeds by briefly reviewing the formal models which appear to make up the corpus of formal oligopoly theory. These models are then evaluated in terms of their ability to generate testable hypotheses that can differentiate oine model from the next and oligopoly behavior from competitive market behavior, as well as the usefulness of these models in the analysis of particular markets and particular public policies. I conclude that there is little qualitative difference in the implications associated with most of the models, but, more importantly, that the formal models are not really utilized by serious students of actual markets and public policies. Rather, the important characteristic of much of this applied work is the use of informal models, stories, the consideration of particular decision-making processes, situation-specific consideratioins of uncertainty, information costs, other transactions costs, and various institutional constraints. Since it appears that the important characteristics of oligopoly behavior are not captured by conventional models, some suggestions for further research which deals more explicitly with the behavior associated with the oral tradition of industrial organization are given; specifically, more careful analysis of actual firm decision-making processes and the phenomena which determine them is called for.

The 1990 Clean Air Act Amendments initiated the first large-scale use of the tradable permit approach to pollution control. The theoretical case for this approach rests on the assumption of an efficient market for emission rights. The authors' empirical analysis shows that the emission rights market created by the 1990 Amendments had become reasonably efficient by mid-1994. They also show that the auctions specified in the Amendments to jump-start trading had become a small part of the overall market. Finally, the authors demonstrate that the strategic bidding behavior discussed in the literature has had no effect on market prices.

The available empirical evidence does not provide a very convincing case that mandatory appliance-efficiency standards will increase economic efficiency or reduce energy consumption significantly. There is a real chance that such standards could actually reduce economic efficiency and possibly lead to an increase in energy use. A broader use of programs to provide consumers with better information seems to represent the most-productive short-run strategy. Consumer education would not only help to improve decisions, but it will also provide time to better assess consumer behavior, allow the market to reveal the technical and economic possibilities for appliance-efficiency improvements, and ultimately allow public policies to be based on more than guesswork. 12 references.