BUEC 363 Course Syllabus
1. Course Overview
This course provides an overview of the oil, natural gas and electricity industry. These industries are the fundamentals to daily activities of nowadays world. The prices in those industries are intrinsic to prices of other commodities and even to the greater economy well beings of a nation. This course outlines the upstream (for example, oil exploration and production) and downstream (for example, the gasoline market) of the oil and natural gas industry. It will also provide a deeper look at some unconventional oil and gas resources that are widely developing. For the electricity industry, this course provides a detailed discussion of the deregulated electricity market, how the market functions, how the submarkets are related with each other and the most updated special topics in the electricity market. We will also discuss some environment policies and regulations that help to minimize the environmental impacts from those industries.
2. Course expectations
After finishing this course, the students should have fundamental understandings of the functions and operations of the oil, natural gas and electricity industry. They should be able to apply fundamental economic theories to the understanding of each market, as well as the environment policies in each market. They should be able to follow up with today’s changing in regulations and industry activities based on the knowledge from this course.
3. Required textbooks
There are no required textbooks for this class, however, having some good textbooks at hand will help better understand the course in a more systematic way.
Electricity Industry
“Power System Economics”, Steven Stoft, ISBN 978-0-471-15040-4, IEEE Press
Oil and Natural Gas Industry
“Oil and Gas for Beginners”, Deutsche Bank Market Research
“Modern Shale Gas Development in the United States: A Primer”, U.S.
Department of Energy, Office of Fossil Energy, 2009.
“Gasoline Pricing: Theory and Evidence” Scherer, Industry Structure, Strategy, and Public Policy, pp. 122-126.
“Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California,” Hastings, American Economic Review, 2004.
“How Economists See the Environment”, Fullerton and Stavins (1998), Nature, October 1, pp. 433-434.
Microeconomics
“Microeconomics”, by Pindyck and Rubinfeld
4. Prerequisite
There is no prerequisite for this course, however, students with basic microeconomics knowledges will have better understanding of the course. I will outline the economic basics in the course where necessary. For those who have interests in better understanding the economic principles behind the policies and market functions, please refer to the microeconomics textbook referred in the “required textbook” section.
5. Office hours MWF 9:00 – 9:45
Email: [email protected] Office number: 3-40C Business
6. Evaluations
The evaluations will be composed of the following:
Class presentations:
There will be two class presentations, one during the midterm and the other during the final term of the course. The presentations should be a discussion of any interesting topics you find relating to oil, natural gas and electricity industry. It can be a news discussion, a policy discussion, or even some statistical analysis that you perform based on some observations that you have made. Each class presentation will be 25 % of the total score.
Midterm and final exams
The midterm and final exams will be questions about fundamental concepts in each industry.
All the exams will be closed book exams. Midterm will be 20% of the total score and final will be 30% of the total score.
7. Course schedules
Week 1 – Electricity market overview Week 2 & 3 – Electricity market architecture
Week 4 – Overview several geographic markets (Alberta and ERCOT) Week 5 – special topics in electricity markets
Week 6 – Oil and gas industry overview Week 7 – reading week
Week 8 – class presentation and midterm Week 9 – World oil and natural gas market Week 10 – oil products and refinery Week 11 – gasoline price formation
Week 12 – unconventional oil and natural gas Week 13 – environmental issues and regulations Week 14 – class presentation and final
We will have various guest speakers coming during this course as well depending on their availability, I will update the dates of guest speakers during the semester of the course.