We address the optimal timing of investment in gas pipelines when the demand for gas is stochastic. We will show that this is a problem that can be solved in theory, but the practical solution depends on functions and parameters that are either subjective or cannot be estimated. We will then...

In 1997, the Comisión Reguladora de Energía of Mexico implemented a netback rule for linking the Mexican natural gas price to the Texas price. At the time, the Texas price reflected a reasonably competitive market. Since that time, there have been dramatic increases in the demand for natural...

This paper presents a case study of regulation of natural gas pricing in Mexico as a case of “successful” policy research. Studies done under an academic agreement between the Comisión Reguladora de Energía (CRE) and the Centro de Investigación y Docencia Económicas (CIDE) in Mexico City...

The Comision Reguladora de Energia of Mexico has implemented a netback rule for linking the Mexican natural gas price to the Texas natural gas benchmark price in an industry structure characterized by a vertically integrated state-owned monopoly. This paper shows that in an open economy where...

This paper addresses the timing of optimal investment in LPG pipelines when the goal is to maximize consumer surplus less private cost and social of transporting LPG. The loss of consumer surplus is small. The important elements are the private cost of transporting LPG and the congestion created...

Este ensayo considera la regulacion de la determinacion de los precios del gas licuado de petroleo en Mexico. Se establece un modelo que incluye toda la informacion esencial para la determinacion de los precios y se derivan las relaciones que deberian existir entre los precios en Mexico y los de...