BUEC 363 Introduction to Energy and Resource Industries Syllabus
Winter Semester, 2019
Instructor: Hailing Zang
Office Hours: Monday afternoons 1:30 – 3:30 pm Email: [email protected]
Office: BUS 3-21D
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 economy well beings of a nation. This course outlines from the upstream (for example, oil exploration and production) to the downstream (for example, the gasoline market) of the oil and natural gas industry. It also provides an overview of the world oil and natural gas market based on economic fundamentals. For the electricity industry, this course provides a detailed discussion of the deregulated wholesale electricity market – how the market functions, how the submarkets are related with each other, and also the most updated special topics in the wholesale electricity market.
2. Course Expectations
After finishing this course, students should have fundamental understandings of industry backgrounds 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. Students should also be able to follow up with economic insights of the changes and trends in regulations and industry activities.
3. Recommended 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 interactions, please refer to the microeconomics textbook referred in the “required textbook” section.
This course is NOT to be taken by students with credit in BUEC 463.
5. Evaluations
Class presentations (50%)
There will be two class presentations, one during the midterm period and the other during the final period 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 observations that you have made. Each class presentation will be 25% of your total mark.
Within the 25%, 5% will be on submitting the presentation on time. Remaining 20% will be on the actual content of the presentation. This 20% will be judged by student peers in class.
Rubrics for the presentations are:
- Present the topic clearly, which means the audience knows what you are talking about (3%)
- Organize the presentation in a good flow so that the audience can follow well (5%) - Enough data support (5%)
- Have your own ideas and judgements and reason it well, which means you don’t just copy news articles (5%)
- Answer questions well (2%)
The presentations are done in a group fashion. At most 4 students in a group, depending on the actually enrollment, the length of each presentation will be announced in class.
No late submission of the class presentation will be accepted and no excuses will be accepted.
If a student has a valid excuse for missing the presentation and explained to the instructor in writing BEFORE the presentation date, new arrangements can be made. Usually with well advanced notification, the presentation date can be well organized among students.
However, no excuse will be accepted AFTER the presentation is over and no makeups for the presentation.
Due date for first presentation submission date: Feb 24 11:59 pm;
Due date for second presentation submission date: March 31 11:59 pm.
First class presentation period: Feb. 25 – Mar. 1;
Second class presentation period: Apr. 1 – 5.
Exams (50%)
There will be two exams during the semester. The two exams are NOT cumulative. The first exam will cover the electricity industry and the second exam will cover the oil and natural gas industry. All the exams will be closed book exams. Each exam is worth 25%
of your total mark.
Missing Exams: if you have 1) an emergency coming up ON the exam date or, 2) if you have already booked an air ticket on the exam date BEFORE the FIRST day of class, with valid written excuses and with supporting documents submitted to the lecturer, you are allowed to submit an individual research paper as a makeup work.
First exam: March 4 in class;
Second exam: April 10 in class, the last day of class.
Letter Grade
The final letter grade will depend on your relative performance among the class. The distribution of the letter grade will follow the school guided distributions:
Again, there is no makeup or extra class work to improve your mark.
6. The Code of Student Behavior
The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behavior (http://www.uofaweb.ualberta.ca/gfcpolicymanual/content.cfm?ID_page=37633) and avoid any behavior which could potentially result in suspicious of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.
7. Course Outlines (Important dates are in bold)
Jan 7 – 11: Electricity market overview
Jan 14 – 18: Electricity market overview continued Jan 21– Jan 25: Electricity market architectures Jan 28 – Feb 1: Locational Price, Hedging
Feb 4 – Feb. 8: Ancillary service markets and special topics in electricity market Feb 11 – Feb. 15: Special topics in electricity markets continued
Feb 18 – Feb 22: Reading Week Feb 25 – Mar. 1: Class Presentation March 4: EXAM I
Mar. 6 – Mar. 8: History of oil and natural gas market
Mar. 11 – 15: Oil and natural gas industry basics Mar. 18 – 22: Oil and natural gas industry structures Mar. 25 – 29: World oil and natural gas markets Apr. 1 – 5: Class Presentation
Apr. 8: Oil sand, LNG and pipelines Apr. 13: Exam II
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.