Economics ETDs

Publication Date

Summer 7-29-2019

Abstract

This dissertation contributes to the field of energy economics by expanding the knowledge of energy stakeholders’ decisions amid the interdependence of energy and environmental policies. I analyze three specific energy development decisions from multiple stakeholders’ perspectives. Chapter 2 introduces a broader state-level policymakers’ decision on renewable portfolio standards (RPS). The renewable portfolio standards is a state-mandated obligation that requires electric load-serving entities to distribute a certain percentage of electricity generated from renewable sources. I investigate the public preferences of RPS for residents in New Mexico in 2017. I find that households are willing to pay for an increase in RPS requirements. Pro-ecological and pro-environmental households tended to prefer an increase in the RPS requirement. Households in oil- and gas-rich areas tended to have lower marginal willingness to pay (MWTP) for share of renewable electricity and households in areas with extensive renewable power plants in place have higher MWTP for share of renewable electricity. This study will help policymakers to make an informed decision when updating the RPS policy.

Chapter 3 analyzes the decision of an oil and gas well manager in the presence of an externality. The increased use of natural gas in the United States can be attributed, in part to technical development in extraction and exploration technology, which resulted in lower prices for natural gas. This makes natural gas more competitive with coal for electricity generation. There is, however, a growing literature concerning the negative externalities of natural gas production. This chapter modeled the joint production of natural gas and oil in the presence of externalities. The model shows that gross production is lower in the presence of externalities. The price and discount rate sensitivity analysis shows that the firm’s Net Present Value will be higher with a higher price and lower discount rate.

Chapter 4 investigates how the decision on improved supply chain reduces the risk for cellulosic biorefinery. Variability in feedstock characteristics, feedstock supply, and selling prices are major sources of risk facing a cellulosic biorefinery. I evaluate supply-, operational- and market-risk reduction opportunities if a biorefinery adapts a supply chain design based on a distributed depot concept. In contrast to the conventional feedstock-supply system, a supply-chain design based on a network of depots providing feedstock to a biorefinery employs geographically distributed depots where the feedstock is preprocessed into densified pellets, allowing feedstock to be transported a greater distance. Results show that combining the effects of contract management and feedstock supply configuration create alternative market opportunities, which can lead to a reduction of supply, operational, and market risk, thus improving the role of cellulosic biofuels in sustainable production. The positive return on investment for a cellulosic biorefinery largely depends on commoditization and creation of intermediate markets for alternative merchandisable products.

The dissertation provides information and implications of stakeholders’ decision in the light of energy and environmental policies aimed to achieve energy security and sustainability.

Degree Name

Economics

Level of Degree

Doctoral

Department Name

Department of Economics

First Committee Member (Chair)

Janie M. Chermak

Second Committee Member

Brady P. Horn

Third Committee Member

Jennifer Thacher

Fourth Committee Member

Jason K. Hansen

Fifth Committee Member

Craig D. Broadbent

Language

English

Keywords

Energy Economics, Renewable Portfolio Standards, Shale Development, Externalities, Biorefinery, Biomass

Document Type

Dissertation

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Included in

Economics Commons

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