Carnegie Mellon University
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Institutional Affiliation: Carnegie Mellon University
NBER Working Papers and Publications
|May 2019||Can Financial Participants Improve Price Discovery and Efficiency in Multi-Settlement Markets with Trading Costs?|
with Frank A. Wolak: w25851
The introduction of purely financial participants into commodity markets is thought to yield forward prices that better reflect future spot prices, and ultimately, more efficient future production and consumption decisions. However, there are sizable transaction costs associated with trading in most commodity markets. This paper develops a statistical test of the null hypothesis that expected forward/spot price spreads cannot be arbitraged even after accounting for these transactions costs. We apply this test to hourly, location-specific day-ahead and real-time prices from California's wholesale electricity market. The implied trading cost required to reject the null hypothesis of no profitable arbitrage opportunities falls significantly after California allowed purely financial participat...
|September 2017||The External Costs of Transporting Petroleum Products by Pipelines and Rail: Evidence From Shipments of Crude Oil from North Dakota|
with Karen Clay, Nicholas Muller, Randall Walsh: w23852
This paper constructs new estimates of the air pollution and greenhouse gas costs from long-distance movement of petroleum products by rail and pipelines. While crude oil transportation has generated intense policy debate about rail and pipeline spills and accidents, important externalities – air pollution and greenhouse gas costs – have been largely overlooked. Using data for crude oil transported out of North Dakota in 2014, this paper finds that air pollution and greenhouse gas costs are nearly twice as large for rail as for pipelines. Moreover, our estimates of air pollution and greenhouse gas costs are much larger than estimates of spill and accidents costs. In particular, they are more than twice as big for rail and more than eight times as big for pipelines. Our findings indicate ...
Published: Karen Clay & Akshaya Jha & Nicholas Muller & Randall Walsh, 2019. "External Costs of Transporting Petroleum Products: Evidence from Shipments of Crude Oil from North Dakota by Pipelines and Rail," The Energy Journal, vol 40(1).
|May 2017||Handle with Care: The Local Air Pollution Costs of Coal Storage.|
with Nicholas Z. Muller: w23417
Burning coal is known to have environmental costs; this paper quantities the local environmental costs of transporting and storing coal at U.S. power plants for the sample period 2002-2012. We first demonstrate that a 10% increase in coal stockpiles (number of deliveries) results in a 0.07% (0.16%) increase in the average concentration of fine particulates (PM2.5) for locations up to 25 miles away from, and downwind from, plants. We next assess the impacts of PM2.5 on average adult and infant mortality rates using coal stockpiles and deliveries as instruments for PM2.5. Our findings within this instrumental variables framework indicate that a 10% increase in PM2.5 leads to a 1.1% (6.6%) increase in average adult (infant) mortality rates; these causal estimates are similar in magnitude to t...