North American energy system responses to natural gas price shocks
File(s)NGShocks_20201009_RnR.pdf (8.68 MB)
Accepted version
Author(s)
Type
Journal Article
Abstract
As of 2020, North American natural gas extraction and use in the electricity sector have both reached all-time highs. The combination of North America's increased reliance on natural gas with a potential disruption to the natural gas market has several energy security implications. Additionally, policymakers interested in economic resiliency will find this study's results useful for informing the implications of the energy sectors' long-term planning and investment decisions. This paper evaluates how both the electricity and natural gas sectors could respond to hypothetical gas price shocks under different system configurations. We impose unforeseen natural gas price shocks under reference and alternative configurations resulting from a renewable generation mandate or variations to renewable capacity costs. Results from several different models are presented for the electricity and natural gas sectors separately for Canada, Mexico, and the United States. Generally, the US becomes more (less) reliant on electricity imports from Canada given a high (low) gas price shock but increases (decreases) exports to Mexico. The renewable mandate is demonstrated to buffer electricity price increases under high price shocks but price reductions under the low price shocks are dampened given less flexibility to take advantage of the low-priced natural gas. The United States is demonstrated to reduce natural gas production and net exports with high natural gas price shocks given a reduction in demand.
Date Issued
2021-02
Date Acceptance
2020-11-16
Citation
Energy Policy, 2021, 149, pp.1-11
ISSN
0301-4215
Publisher
Elsevier BV
Start Page
1
End Page
11
Journal / Book Title
Energy Policy
Volume
149
Copyright Statement
© 2020 Elsevier Ltd. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence http://creativecommons.org/licenses/by-nc-nd/4.0/
Identifier
https://www.sciencedirect.com/science/article/pii/S0301421520307576?via%3Dihub
Subjects
Energy
Publication Status
Published
Article Number
112046
Date Publish Online
2020-11-23