LAI's price forecasts have been a voice of reasonableness since our inception in 1989.

Our forecasts provide a sound basis for long-term planning purposes as well as for short-term tactical decisions.  LAI has an enlightened perspective on market dynamics.  We pay close attention to tight supply fundamentals in the Gulf Coast and Canada, while monitoring exploration and production trends across North America.  The global economy, constraints on refinery capacity, and the high cost of replacement oil and gas supplies portend high prices and volatility for the remainder of the decade.  New LNG plus Frontier gas from the MacKenzie Delta and then Alaska may temper the run-up by the beginning of the next decade.

Our forecast of gas, oil, and coal prices can be presented on a plant-specific basis.  Using a bottom-up approach, we rely on both futures prices and on proprietary models that are centered on market fundamentals.  We conduct statistical evaluations of historical prices to prepare confidence interval scenarios, and apply probabilistic modeling techniques to derive the range of price outcomes.

To derive basis across North America, LAI licenses the Gas Pipeline Competition Model, a mixed integer optimization modeling system.  Pipeline and storage operations are simulated through steady state and transient flow simulation models.

LAI can help our clients:

	Forecast spark spreads and market heat rates
	Analyze locational gas prices and basis differentials
	Test generation economics under stochastic fuel conditions
	Glean insight from the futures markets and fundamental supply statistics
	Assess supply constraints to specific power plants and/or trading hubs
	Evaluate the economics of storage, interruptible / secondary transportation, and peaking services
	Assess the impact of emission regulations on fuel oil and coal usage