This report responds to a request from the Secretary of Energy, Spencer Abraham, received in February 2002 to provide energy policymakers with information for their assessment of the merits of derivatives for managing risk in energy industries. It also discusses how policy decisions that affect energy markets can limit or enhance the usefulness of derivatives as tools for risk management.

Contents	(complete Report)
Summary
Preface
Introduction
Derivatives and Risk in Energy Markets
Managing Risk With Derivatives in the Petroleum and Natural Gas Industries
Derivatives in the Electricity Industry
Prospects for Derivatives in Energy Industries
Derivative Markets and Their Regulation
Accounting for Derivatives
Public Interest and Private Risk Management
Contacts
Appendixes
Appendix A. Memorandum from the Secretary of Energy
Appendix B. Details of Present Net Value Calculation	,
Appendix C. Reported Natural Gas Prices	,