p>ACSF and the National Commission on Energy Policy (NCEP) are co-sponsoring a 16-month Task Force to develop new government and private sector options for managing natgas price volatility.
America’s growing natural gas resource base is now widely recognized. Yet, the development of these resources, especially unconventional shale gas “plays”, will depend on sustained long term demand from end-users at prices that are sufficient to cover upstream production and transport costs. Whether or not this demand will be forthcoming – and at a sufficient price level – is now the subject of considerable debate.
North American markets for natural gas have historically seen periods of substantial price escalation and volatility, and these price swings have tended to destroy industrial demand followed, in turn, by large cut backs in production and E&P activities.
Against this background, a full understanding of the factors underlying market volatility for this commodity and the best options available for managing it — both from a regulatory standpoint and through commercial, private sector activities – takes on a new importance. Indeed, better tools for managing price volatility may be an essential prerequisite for recognizing the economic promise of America’s new natgas resource base as well as the potential public policy benefits.
ACSF and NCEP are assembling a task force of leading stakeholders to examine these issues through three sets of white papers and broad-based, but invitation-only, workshops. The papers will cover: (1) economic and legal background; (2) private sector options for managing volatility; and (3) public policy options. Based on the papers and workshop dialogues, the Foundation and NCEP plan to prepare a final, book-length report and recommendations for government action and private sector initiatives. This work will then be presented at a day long public conference.
Our current schedule contemplates workshops in March, June, and October of 2010, with a final report publicly released in January 2011. Up to eight corporate co-sponsors will be accepted for this project, and some sponsorship opportunities are still available. Please contact the Foundation’s CEO if you are interested.