1- If oil and natural gas are close substitutes discuss the effect of a negative shock to world oil supplies as in (1) on field prices, import prices, quantities, and market clearing conditions for natural gas sold in the U.S. under the following conditions:
a. Field prices for natural gas produced in the U.S. and prices for imported gas are unregulated. Pipelines pass through the cost of the gas they purchase in the field in the prices they charge to local distribution companies.
b. The field price of natural gas produced in the U.S. is subject to a price ceiling equal to the pre-shock domestic price of natural gas while imported gas prices are unregulated. Pipelines are required to charge the average prices they pay for domestic and imported gas to local distribution companies
c. The pipeline network in the U.S. was operating at full capacity prior to the supply shock.
2- The United States maintains a Strategic Petroleum Reserve (SPR) that now contains 700 million barrels of crude oil.
a. What factors would you take into account to design a policy to determine when and how much oil is released from the SPR?
b. How would the expected supply behavior of OPEC affect your policy design?
3- Discuss the energy markets:
1- International Oil market
2- Markets for natural Gas
3- Integrated analysis of energy systems
4- Discuss the economics of energy and environment interactions:
1- The economics of environment protection
2- Pollution control from the stationary and mobile sources
3- The economics of climate change
4- The basics of the clean development mechanism