Economic Insight, Inc. (EII) is the culmination of the consulting career of S.A. Van Vactor, which began in 1981 with a principal focus on energy and natural resource economics. Throughout the 1980s Dr. Van Vactor worked in close collaboration with Arlon R. Tussing and Associates, Inc. (ARTA), focusing on the deregulation of the natural gas market and the petroleum industry in Alaska. Since then, the firm has broadened its analytical skills to include projects and analyses throughout the world, providing consulting services to a wide variety of government and private clients. These services have included policy analysis, strategic studies and market forecasting, industry surveys, data collection and management, lectures and presentations, conferences, and expert witness services for regulatory hearings, litigation, and international arbitration. In addition to consulting services, Economic Insight manages subscriber-based publications through its sister unit, Insight Research, Inc. (IRI), which publishes the Energy Market Report (EMR), Pacific West Oil Data, and the West Coast Petroleum Directory.
Policy Analysis. The energy industries are frequently at the center of policy debates concerning national security, taxation, and regulation. Energy supplies play a unique role in economic development, where the incentives and goals of private firms can diverge from the public interest. Over the years, EII economists have provided insightful advice to politicians and government agencies - advice that has analyzed the costs and benefits of alternative policies. For example, EII staff members have provided policy studies to the Government Accountability Office (formerly General Accounting Office, (GAO)) on international crude oil prices and the Alaska natural gas pipeline, the Alaska Senate and the Cato Institute on the export of North Slope oil, to the California Energy Commission on oil storage, and to the states of Oregon, Washington, and Idaho. EII staff also aided Asia Pacific Economic Cooperation (APEC) in the development of a natural gas strategy for member states. EII members analyzed the development of the natural gas industry in southern Africa and prepared a report on its development and regulation for Sasol. When confronted with uncertainty about methods of pricing royalty crude oil, the American Petroleum Institute (API) asked EII staff to prepare a report critiquing proposals by the Minerals Management Service (MMS).
Strategic Studies. Energy firms have to cope with extreme price volatility, counter-party risk, regulatory uncertainty, and the accidents of nature. Frequently they need outside assistance on product development and the economic environment they face. EII economists have provided strategic advice on natural gas and electricity prices for the Bonneville Power Administration (BPA). They developed the oil and natural gas pricing model used by the Northwest Power and Conservation Council and forecasted the oil market for Chase Econometrics. EII staff provides a quarterly overview of economic and energy market developments for the CEO of Pacific Gas and Electric Corporation. EII consultants also assisted the California Power Exchange in the design and development of a forward electricity market. They recently conducted a study of risk management practices in the gas industry for Tokyo Gas.
Industry Surveys. IRI’s experience with the daily publication on the electricity market demonstrates a ready capability to authoritatively survey and document a variety of economic activities. For example, IRI economists have conducted nationwide surveys on the types and frequency of computer viruses for the Mitsubishi Research Institute. The firm has collected and analyzed data on environmental preferences for Exxon.
Data Collection and Management. Over the last decade, EII staff have developed and maintained a series of large databases for a variety of public and private clients. Members of the firm have researched the petroleum industry in Alaska and California as well as the valuation of foreign crude oils for several anti-trust and tax disputes. Data collected through the EMR and Pacific West Oil Data provide a unique public and proprietary database of electricity prices, unit outages, congestion differentials, water flows, snow pack, refinery data, petroleum product prices, oil consumption, and supply. For further information on data availability please contact EII at (503) 222-2425.
Lectures and Appearances. S. A. Van Vactor has prepared a series of lectures on natural gas markets in developing countries and delivers them in Singapore and Tokyo on an annual basis. The lectures are given through the Centre for Management Technology (CMT), based in Singapore. The lectures include a description of mature gas markets, such as those in the U.K. and North America, covering topics such as the development of commodity markets, futures exchanges (such as NYMEX and the IPE), the over-the-counter (OTC) market, spot and forward pricing, risk management, standardized contracts, and index pricing. Also included is a description of contract pricing in the LNG market and the development of an LNG spot market. As part of the lecture on gas markets, participants play a gas trading game to learn about grid balancing. The principal focus of the lectures, however, is on the gas market in developing countries. Gas-rich Asian countries typically have few, if any, pipelines and distribution systems. In order to provide participants a hands-on approach EII has developed four spreadsheet models on sectors of economic activity that normally lead gas market development: urea (fertilizer), power generation, LNG exports, and town-gas distribution systems. In addition, Dr. Van Vactor also occasionally lectures for the Judge Institute for Management Studies at the University of Cambridge for their continuing education program.
Conferences. Over the years EII and IRI staff have supported a variety of energy conferences. Dr. Van Vactor co-chaired the USAEE annual conference in 1992. In addition, the EMR has sponsored a wide variety of conferences dealing with the development of power markets and electricity trading. In 2000 EII staff hosted a conference in Portland, Volatile Energy Prices, which helped put the California energy crisis in perspective. Plans are now underway for a second conference dealing with the fundamental change in the pricing and availability of oil and gas and the impact of greater scarcity on electricity prices.
Expert Testimony. The firm has researched energy industry activities throughout the world. It has conducted a series of studies on the valuation of domestic and foreign crude oils for anti-trust, contract, and tax disputes and provided expert testimony and affidavits based on these analyses. EII economists have also provided expert testimony before State Public Utility Commissions (PUCs) and the Federal Energy Regulatory Commission (FERC) on regulated energy industries, including natural gas pipelines in the western United States, electricity market restructuring, and pricing disputes. The most recent projects have included testimony on behalf of Exxon concerning its tax dispute with the State of Alaska; testimony for the California Power Exchange submitted to FERC concerning regulated rates; testimony before FERC on behalf of the “transaction finality group” concerning electricity price refunds in the Pacific Northwest; testimony on behalf of Sempra concerning contract provisions and pricing of California natural gas; prepared testimony and database on behalf of Exxon in its contract dispute with the State of California; arbitration testimony for Techint concerning the value of Nile Blend crude oil; prepared testimony for Conoco and BP on the structure of the natural gas industry; testimony and report submitted to FERC for Williams and Coral Energy concerning the methodology for determining electricity and gas prices; testimony before FERC on behalf of Coral concerning its long-term power supply contract to the State of California; testimony for Robert Barman on the structure of the gasoline marketing; and arbitration testimony on crude oil pricing in the world oil market for the Transasiatic pipeline.
The
