This paper presents a model of long distance telephone demand based on route‐specific short‐haul ... more This paper presents a model of long distance telephone demand based on route‐specific short‐haul (intraLATA) calling minutes. The data used in the estimation comes from 2,813 intraLATA long‐distance routes in the state of Florida for 1990. Route‐specific information (mileage, minutes of use, access lines, prices, route‐specific optional calling plans) is matched to socio‐economic data (income, average household size, race, education) obtained in the 1990 census. The results reveal a number of important economic and demographic insights on route‐specific long distance calling. Estimated price and income elasticities of demand are −0.54 and 1.24, respectively.
Place Drive, Suite 5-F, Baton Rouge, Louisiana, 70808. I am the same person that prepared and pre... more Place Drive, Suite 5-F, Baton Rouge, Louisiana, 70808. I am the same person that prepared and pre-filed direct expert testimony on the behalf of the New Jersey Division of Rate Counsel ("Rate Counsel") on October 28, 2013. Q. WHAT IS THE PURPOSE OF YOUR SUPPLEMENTAL TESTIMONY? A. I have been asked by Rate Counsel to provide an expert opinion to the Board of Public Utilities ("BPU" or "Board") on the report prepared by the Brattle Group, on the behalf of Public Service Electric & Gas Company ("PSE&G" or "the Company"), to estimate the program benefits associated with the Company's Energy Strong ("ES") proposal. The Brattle Group report is entitled Analysis of Benefits: PSE&G's Energy Strong Program, dated October 7, 2013 (hereafter "Brattle Report" or "the Report") and was provided to the Parties as a supplement to the Company's Response to RCR-ECON-5. It is my understanding that the Brattle Report is being sponsored through the
We would like to appreciate the discusser for his interest and valuable comments on our paper 1 e... more We would like to appreciate the discusser for his interest and valuable comments on our paper 1 entitled "Unit Commitment by Lagrangian Relaxation and Genetic Algorithms." In the following, we will address the points raised in the discussion. 1) In our paper, we apply the combination of Lagrangian Relaxation and Genetic Algorithms to solve the unit commitment problem. The basic idea of proposed LRGA is that Genetic Algorithm is incorporated into Lagrangian Relaxation method to update the Lagrangian multipliers and improve the performance of Lagrangian Relaxation method. Our paper present this method based on the approach proposed by Merlin and Sandrin [12]. The Reference [13] by F. Zhuang and F. D. Galiana is an interesting and excellent paper. The discusser presents the suggestion that Genetic Algorithm is incorporated into the Lagrangian Relaxation approach [13] to solve the unit commitment problem and compare the performance. This is a good idea and we will study and try the suggestion as far as possible in the future. 2) In step 6 of the LRGA algorithm presented, after setting the commitments variables to the solution of the problem solved in step 4, an economic dispatch procedure is run, provided there is sufficient generation committed that hour. If there is not enough generation committed, the total cost for that hour is set to a very large number. This means that the solution of the dual problem is uncertain of meeting the spinning reserve constrains. 3) We would like to thank the discusser for providing new techniques to update the Lagrangian multiplies in Reference [D6-D9]. These techniques are interesting and valuable. We will study and try these techniques for the unit commitment problem to compare the performance of our LRGA method to a LR approach as soon as possible in the future.
Abstract In early 2018, the U.S. Congress expanded the 45Q tax credit program for the capture, st... more Abstract In early 2018, the U.S. Congress expanded the 45Q tax credit program for the capture, storage, and utilization of CO2. The 45Q tax credit expansion creates a financial incentive of $50 for each tonne of CO2 placed in long-term storage, a significant increase from the $20 per tonne that was originally authorized in the Energy Policy Act of 2008. Here, we estimate the net present value of industrial carbon capture and storage with the $50 per tonne credit and find that in some industrial systems, the costs of capturing, transporting, and storing one tonne of CO2 is less than $50. For systems in which the $50 tax credit is not cost effective, economies of scale associated with small emissions quantities are limiting, and a simple gaseous transportation solution which saves on CO2 compression costs improves economics in some cases. However, the $50 tax credit is unlikely to be sufficient to stimulate changes in the management of most industrial CO2 emissions.
International Journal of Sustainable Energy, Jul 4, 2018
Industrial carbon capture and storage (CCS) is carbon capture from nonpower, stationary emissions... more Industrial carbon capture and storage (CCS) is carbon capture from nonpower, stationary emissions sources, typically involving high-purity emissions from a non-combustion exhaust stream. Industrial CCS activities represent a significant opportunity for reducing carbon emissions in concentrated geographic locations and a potential 'bridge' to more widespread CCS. This paper provides a summary of the opportunities for industrial CCS and market-based revenue streams, like those associated with enhanced crude oil recovery (EOR). The use of EOR changes the nature of carbon from being a pollutant to a valuable commercial input, which requires a judicious understanding of the technical industrial sequestration process, historic oil and gas operations, and the specific location and types of industrial carbon sources that can facilitate this type of carbon emissions mitigation strategy. We review literature on costs and summarise geospatial data to provide an overview of the potential for an integrated industrial CCS-EOR system in a petrochemical corridor.
International Journal of Greenhouse Gas Control, Feb 1, 2020
Abstract Petroleum refineries and petrochemical plants are major CO2 sources, however, they are a... more Abstract Petroleum refineries and petrochemical plants are major CO2 sources, however, they are also significant capital and employment assets that are unlikely to be replaced in the near term. As a result, nations and states that are interested in reducing the carbon intensity of their economies will need to find ways to reduce the emissions of their existing industrial capacity. Industrial carbon capture provides one potential mechanism for reducing the carbon intensity of existing industrial facilities, however, an economically feasible capture system requires that the captured CO2 be integrated into a system of transport and storage with income generated either through tax credits, enhanced oil recovery (EOR), or both. Here, we present a cash-flow model of an integrated system with industrial capture, pipeline transport, and EOR, and we parameterize the model with data from Louisiana. Given a $50/bbl oil price, an integrated capture, transport and EOR system that uses ethylene oxide production, ammonia production, or natural gas processing as sources is predicted to have a net present value of about $500 million; hydrogen-based capture has a cash flow of −$214 given the same assumptions. Further, we find that the recent 45Q Tax Credit expansion has a positive impact on the cash flow of the system but does not change the overall profitability of the systems under the specified assumptions such that without the tax credits natural gas processing, ammonia production and ethylene oxide production-based capture systems remain cost-effective, while hydrogen-based capture remains unprofitable with or without the tax credit.
Biophysical economics and resource quality, Feb 9, 2018
To meet the COP21 2 °C climate target, humanity would need to complete a transition to renewable ... more To meet the COP21 2 °C climate target, humanity would need to complete a transition to renewable energy within the next several decades. But for decades, fossil fuels will continue to underpin many fundamental activities that allow modern society to function. Unfortunately, net energy yield from fossil fuels is now falling, and despite substantial growth in renewable energy, total global energy demand and fossil fuel consumption are still increasing. Recent studies document promising trends in net energy yield from new renewable energy, particularly wind and solar. However, most studies do not fully consider the complexities of multiple factors including production intermittency, storage, the need to replace a massive infrastructure network, and lack of fungibility of different energy sources. Also, oft-overlooked, is that human impacts have caused widespread degradation of natural ecosystems and the provisioning of ecosystem goods and services, especially affecting vulnerable areas like coastal zones and arid regions. An accelerated renewable energy transition to meet climate targets and replace declining stocks of high net yielding fossil fuels will compete with resources needed for crucial investments to mitigate already locked in climate change and environmental degradation impacts. Integrative approaches that include all costs can help balance interdependent factors such as net energy dynamics, resource allocation, and ecosystem degradation. Energy-climate investment pathways produce economic output and quality of life tradeoffs that must be considered. Accordingly, developing future energy policy requires a systems approach with global boundaries and new levels of appreciation of the complex mix of interrelated factors involved.
The United States (U.S.) Gulf Coast is a prominent global energy hub with a set of highly integra... more The United States (U.S.) Gulf Coast is a prominent global energy hub with a set of highly integrated critical energy infrastructure that rivals, if not surpasses, any comparable set of infrastructure anywhere in the world. Past extreme weather events in the region have led to critical energy infrastructure disruptions with national and global implications. Future sea-level rise (SLR), coupled with other natural hazards, will lead to a significant increase in energy infrastructure damage exposure. This research assesses coastal energy infrastructure that is at risk from various fixed SLR outcomes and scenarios. The results indicate that natural gas processing plants that treat and process natural gas before moving it into the interstate natural gas transmission system may be particularly vulnerable to inundation than other forms of critical energy infrastructure. Under certain SLR assumptions, as much as six Bcfd (eight percent of all U.S. natural gas processing capacity) could be inundated. More extreme SLR exposure assumptions result in greater levels of energy infrastructure capacity exposure including as much as 39 percent of all U.S. refining capacity based on current operating levels. This research and its results show that while fossil fuel industries are often referenced as part of the climate change problem, these industries will likely be more than proportionally exposed to the negative impacts of various climate change outcomes relative to other industrial sectors of the U.S. economy. This has important implications for the U.S. and global energy supplies and costs, as well as for the U.S. regional economies reliant on coastal energy infrastructure and its supporting industries.
Abstract An emerging challenge for several energy-producing states will be the development of pol... more Abstract An emerging challenge for several energy-producing states will be the development of policies that encourage the continued economic development of maturing oil and gas properties. Production rates naturally decline as wells age. This is particularly true for properties approaching “marginal” status in many energy-producing states where continued operation under expected economic conditions becomes questionable. Premature shut-in of these wells may entail loss of production, economic output, employment, and state revenues. This paper examines the potential impact of royalty relief on state leases and economic production using Louisiana as a case study. Two production related measures for state leases are estimated: (1) current production position relative to the age of the property and (2) the current costs of production for the given property at a given or anticipated level of output. Those wells/leases that are estimated as having negative profitability (i.e., losses) or operating at break-even levels are candidates for “marginal” classification. The number of wells and production associated with these marginal leases will then be estimated. The economic impacts of offering royalty relief at the 25% level are considered. Under the royalty relief scenario, a minimal amount of increased revenues is realized by the state and the discount provides only incremental production from marginal wells relative to total state production.
This paper presents a model of long distance telephone demand based on route‐specific short‐haul ... more This paper presents a model of long distance telephone demand based on route‐specific short‐haul (intraLATA) calling minutes. The data used in the estimation comes from 2,813 intraLATA long‐distance routes in the state of Florida for 1990. Route‐specific information (mileage, minutes of use, access lines, prices, route‐specific optional calling plans) is matched to socio‐economic data (income, average household size, race, education) obtained in the 1990 census. The results reveal a number of important economic and demographic insights on route‐specific long distance calling. Estimated price and income elasticities of demand are −0.54 and 1.24, respectively.
Place Drive, Suite 5-F, Baton Rouge, Louisiana, 70808. I am the same person that prepared and pre... more Place Drive, Suite 5-F, Baton Rouge, Louisiana, 70808. I am the same person that prepared and pre-filed direct expert testimony on the behalf of the New Jersey Division of Rate Counsel ("Rate Counsel") on October 28, 2013. Q. WHAT IS THE PURPOSE OF YOUR SUPPLEMENTAL TESTIMONY? A. I have been asked by Rate Counsel to provide an expert opinion to the Board of Public Utilities ("BPU" or "Board") on the report prepared by the Brattle Group, on the behalf of Public Service Electric & Gas Company ("PSE&G" or "the Company"), to estimate the program benefits associated with the Company's Energy Strong ("ES") proposal. The Brattle Group report is entitled Analysis of Benefits: PSE&G's Energy Strong Program, dated October 7, 2013 (hereafter "Brattle Report" or "the Report") and was provided to the Parties as a supplement to the Company's Response to RCR-ECON-5. It is my understanding that the Brattle Report is being sponsored through the
We would like to appreciate the discusser for his interest and valuable comments on our paper 1 e... more We would like to appreciate the discusser for his interest and valuable comments on our paper 1 entitled "Unit Commitment by Lagrangian Relaxation and Genetic Algorithms." In the following, we will address the points raised in the discussion. 1) In our paper, we apply the combination of Lagrangian Relaxation and Genetic Algorithms to solve the unit commitment problem. The basic idea of proposed LRGA is that Genetic Algorithm is incorporated into Lagrangian Relaxation method to update the Lagrangian multipliers and improve the performance of Lagrangian Relaxation method. Our paper present this method based on the approach proposed by Merlin and Sandrin [12]. The Reference [13] by F. Zhuang and F. D. Galiana is an interesting and excellent paper. The discusser presents the suggestion that Genetic Algorithm is incorporated into the Lagrangian Relaxation approach [13] to solve the unit commitment problem and compare the performance. This is a good idea and we will study and try the suggestion as far as possible in the future. 2) In step 6 of the LRGA algorithm presented, after setting the commitments variables to the solution of the problem solved in step 4, an economic dispatch procedure is run, provided there is sufficient generation committed that hour. If there is not enough generation committed, the total cost for that hour is set to a very large number. This means that the solution of the dual problem is uncertain of meeting the spinning reserve constrains. 3) We would like to thank the discusser for providing new techniques to update the Lagrangian multiplies in Reference [D6-D9]. These techniques are interesting and valuable. We will study and try these techniques for the unit commitment problem to compare the performance of our LRGA method to a LR approach as soon as possible in the future.
Abstract In early 2018, the U.S. Congress expanded the 45Q tax credit program for the capture, st... more Abstract In early 2018, the U.S. Congress expanded the 45Q tax credit program for the capture, storage, and utilization of CO2. The 45Q tax credit expansion creates a financial incentive of $50 for each tonne of CO2 placed in long-term storage, a significant increase from the $20 per tonne that was originally authorized in the Energy Policy Act of 2008. Here, we estimate the net present value of industrial carbon capture and storage with the $50 per tonne credit and find that in some industrial systems, the costs of capturing, transporting, and storing one tonne of CO2 is less than $50. For systems in which the $50 tax credit is not cost effective, economies of scale associated with small emissions quantities are limiting, and a simple gaseous transportation solution which saves on CO2 compression costs improves economics in some cases. However, the $50 tax credit is unlikely to be sufficient to stimulate changes in the management of most industrial CO2 emissions.
International Journal of Sustainable Energy, Jul 4, 2018
Industrial carbon capture and storage (CCS) is carbon capture from nonpower, stationary emissions... more Industrial carbon capture and storage (CCS) is carbon capture from nonpower, stationary emissions sources, typically involving high-purity emissions from a non-combustion exhaust stream. Industrial CCS activities represent a significant opportunity for reducing carbon emissions in concentrated geographic locations and a potential 'bridge' to more widespread CCS. This paper provides a summary of the opportunities for industrial CCS and market-based revenue streams, like those associated with enhanced crude oil recovery (EOR). The use of EOR changes the nature of carbon from being a pollutant to a valuable commercial input, which requires a judicious understanding of the technical industrial sequestration process, historic oil and gas operations, and the specific location and types of industrial carbon sources that can facilitate this type of carbon emissions mitigation strategy. We review literature on costs and summarise geospatial data to provide an overview of the potential for an integrated industrial CCS-EOR system in a petrochemical corridor.
International Journal of Greenhouse Gas Control, Feb 1, 2020
Abstract Petroleum refineries and petrochemical plants are major CO2 sources, however, they are a... more Abstract Petroleum refineries and petrochemical plants are major CO2 sources, however, they are also significant capital and employment assets that are unlikely to be replaced in the near term. As a result, nations and states that are interested in reducing the carbon intensity of their economies will need to find ways to reduce the emissions of their existing industrial capacity. Industrial carbon capture provides one potential mechanism for reducing the carbon intensity of existing industrial facilities, however, an economically feasible capture system requires that the captured CO2 be integrated into a system of transport and storage with income generated either through tax credits, enhanced oil recovery (EOR), or both. Here, we present a cash-flow model of an integrated system with industrial capture, pipeline transport, and EOR, and we parameterize the model with data from Louisiana. Given a $50/bbl oil price, an integrated capture, transport and EOR system that uses ethylene oxide production, ammonia production, or natural gas processing as sources is predicted to have a net present value of about $500 million; hydrogen-based capture has a cash flow of −$214 given the same assumptions. Further, we find that the recent 45Q Tax Credit expansion has a positive impact on the cash flow of the system but does not change the overall profitability of the systems under the specified assumptions such that without the tax credits natural gas processing, ammonia production and ethylene oxide production-based capture systems remain cost-effective, while hydrogen-based capture remains unprofitable with or without the tax credit.
Biophysical economics and resource quality, Feb 9, 2018
To meet the COP21 2 °C climate target, humanity would need to complete a transition to renewable ... more To meet the COP21 2 °C climate target, humanity would need to complete a transition to renewable energy within the next several decades. But for decades, fossil fuels will continue to underpin many fundamental activities that allow modern society to function. Unfortunately, net energy yield from fossil fuels is now falling, and despite substantial growth in renewable energy, total global energy demand and fossil fuel consumption are still increasing. Recent studies document promising trends in net energy yield from new renewable energy, particularly wind and solar. However, most studies do not fully consider the complexities of multiple factors including production intermittency, storage, the need to replace a massive infrastructure network, and lack of fungibility of different energy sources. Also, oft-overlooked, is that human impacts have caused widespread degradation of natural ecosystems and the provisioning of ecosystem goods and services, especially affecting vulnerable areas like coastal zones and arid regions. An accelerated renewable energy transition to meet climate targets and replace declining stocks of high net yielding fossil fuels will compete with resources needed for crucial investments to mitigate already locked in climate change and environmental degradation impacts. Integrative approaches that include all costs can help balance interdependent factors such as net energy dynamics, resource allocation, and ecosystem degradation. Energy-climate investment pathways produce economic output and quality of life tradeoffs that must be considered. Accordingly, developing future energy policy requires a systems approach with global boundaries and new levels of appreciation of the complex mix of interrelated factors involved.
The United States (U.S.) Gulf Coast is a prominent global energy hub with a set of highly integra... more The United States (U.S.) Gulf Coast is a prominent global energy hub with a set of highly integrated critical energy infrastructure that rivals, if not surpasses, any comparable set of infrastructure anywhere in the world. Past extreme weather events in the region have led to critical energy infrastructure disruptions with national and global implications. Future sea-level rise (SLR), coupled with other natural hazards, will lead to a significant increase in energy infrastructure damage exposure. This research assesses coastal energy infrastructure that is at risk from various fixed SLR outcomes and scenarios. The results indicate that natural gas processing plants that treat and process natural gas before moving it into the interstate natural gas transmission system may be particularly vulnerable to inundation than other forms of critical energy infrastructure. Under certain SLR assumptions, as much as six Bcfd (eight percent of all U.S. natural gas processing capacity) could be inundated. More extreme SLR exposure assumptions result in greater levels of energy infrastructure capacity exposure including as much as 39 percent of all U.S. refining capacity based on current operating levels. This research and its results show that while fossil fuel industries are often referenced as part of the climate change problem, these industries will likely be more than proportionally exposed to the negative impacts of various climate change outcomes relative to other industrial sectors of the U.S. economy. This has important implications for the U.S. and global energy supplies and costs, as well as for the U.S. regional economies reliant on coastal energy infrastructure and its supporting industries.
Abstract An emerging challenge for several energy-producing states will be the development of pol... more Abstract An emerging challenge for several energy-producing states will be the development of policies that encourage the continued economic development of maturing oil and gas properties. Production rates naturally decline as wells age. This is particularly true for properties approaching “marginal” status in many energy-producing states where continued operation under expected economic conditions becomes questionable. Premature shut-in of these wells may entail loss of production, economic output, employment, and state revenues. This paper examines the potential impact of royalty relief on state leases and economic production using Louisiana as a case study. Two production related measures for state leases are estimated: (1) current production position relative to the age of the property and (2) the current costs of production for the given property at a given or anticipated level of output. Those wells/leases that are estimated as having negative profitability (i.e., losses) or operating at break-even levels are candidates for “marginal” classification. The number of wells and production associated with these marginal leases will then be estimated. The economic impacts of offering royalty relief at the 25% level are considered. Under the royalty relief scenario, a minimal amount of increased revenues is realized by the state and the discount provides only incremental production from marginal wells relative to total state production.
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Papers by David Dismukes