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Asset acquisition during shale play development and land management costs

  • Blake Sutton and Zhen Zhu

August 10, 2020

In this podcast, Zhen Zhu and Blake Sutton discuss the recent characteristics in asset acquisition in U.S. oil and gas upstream sectors and emphasize the land management costs associated with asset acquisition in various parts of the shale plays.

Blake Sutton is an undergraduate economics student and has worked as a landman for 3+ years. He has worked independently and for both large and small brokerages based in the Oklahoma City area.

Zhen Zhu, Ph.D., is a professor of economics who teaches courses in energy economics, business forecasting, energy finance, and energy risk management. He also consults regularly for business and has been an expert witness on issues related to regulated utility cost of capital, load forecasting, energy risk management and so on. See his UCO profile at https://www3.uco.edu/centraldirectory/profiles/2280.

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U.S. Shale-Oil Production Peak: Civilization's Ultimate Energy Forecast.

  • Professor Douglas B. Reynolds, Ph.D.

July 30, 2020

This pod cast, based on the working paper of the same name, explains why petroleum is the best physical type of energy. It then talks about how the search for energy proceeds, including the economics of the Hubbert curve. It looks at U.S. shale-oil potential supplies by falsifying various hypotheses. Finally, an explanation about how civilizations are defined and energetically sustained is given in order to show parallels between previous civilizations and our own.

Dr. Douglas B. Reynolds is a professor of petroleum and energy economics at the University of Alaska Fairbanks. He has lived, worked and studied in many countries. He has worked on energy economic models for Alaska. He lived in the former Soviet Union just after the fall. He has published multiple articles, books and book chapters and has an academic Google Hirsch Index of 15. His full CV of articles based on each article's relative importance in descending order can be found at scholarworks@UA at: http://hdl.handle.net/11122/11180.

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Oil Supply Manager Misconceptions

Free Podcast

  • Jonathan Chanis

July 20, 2020

Recent oil market developments have encouraged renewed talk about the need for a "global oil market supply manager." The latest rendition of this notion even suggests that the United States, either by itself, or in concert with Saudi Arabia and/or Russia could play such a role. However, enthusiasm for this idea is based on a number of misconceptions about how a global oil supply manger would operate, and about the most important source of extreme oil price volatility.

As Managing Member of New Tide Asset Management, LLC, Jonathan Chanis consults on energy, geopolitics, and macroeconomics, and he trades and invests for his own account. Previously, as Senior Vice President of Policy at Securing America's Future Energy, Jonathan was responsible for planning and directing the research, analysis, and writing of SAFE's policy team. Before joining SAFE, Jonathan taught graduate students at Columbia University about energy security and scenario planning, and he consulted on petroleum and natural gas security, and supply and value chain management. For 20 years prior to this, Jonathan traded and invested in energy and emerging market equities, and commodities and currencies. He was a Senior Trader at Caxton Associates, a Vice President at Goldman Sachs' commodities division (J. Aron & Co.), and a Managing Director at Tribeca Global Management (a division of Citigroup).



The Economics of Flaring in U.S. Shale

Free Podcast

  • Mark Agerton

July 21, 2020

Working Paper: (Download)

Flaring of natural gas is one of the most visible signs of pollution in the oil and gas industry and, perhaps paradoxically, one of the least understood. This podcast looks at flaring in the Permian Basin and the Bakken shale---the two biggest sources of U.S. flaring. I look at who's flaring and why. I talk about whether markets will be effective at reducing flaring. I look at what we do and don't know about the climate damages and local air pollution caused by flaring. Finally, I talk about what states are currently doing to limit flaring, and I outline some of the additional options policy-makers have. Some of the most exciting options involve satellite-based remote sensing.

Mark Agerton is an Assistant Professor in the Department of Agricultural and Resource Economics at UC Davis and a non-resident fellow with the Center for Energy Studies at Rice University's Baker Institute. He works on issues in energy and resource economics. His current research examines several aspects of the U.S. shale boom, including how firms learn where to drill, the economics of mineral leasing, constraints in midstream infrastructure, and market structure in oilfield services. Agerton earned a Ph.D. in Economics from Rice University, an M.A. in Economics from the University of Illinois at Chicago, and a B.A. in Spanish from Davidson College.


OPEC as a Destabilizing Influence.

  • Marc Vatter

July 20, 2020

Author: Marc Vatter

I begin by observing that oil prices have been far more volatile in the "OPEC Era" of oil pricing than in the previous era of the Seven Sisters and the Texas Railroad Commission. I explain that OPEC benefits from volatility because 1) short run net demand to OPEC is very inelastic, unlike long run net demand, 2) asymmetric effects of oil prices on world GDP imply multiple equilibrium prices for the cartel, and 3) fluctuations in price initiated by OPEC cause its revenues to vary countercyclically with macroeconomic activity, allowing OPEC to earn a risk premium in financial markets. I describe a history of destabilizing behavior, discuss the effect of the shale boom on OPEC's market power, and address an opposing point of view.

Podcast, Video, and Supporting Files:


Energy Justice and a Just Transition

Free Podcast

  • Sanya Carley

June 23, 2020

The energy transition in the United States, as well as elsewhere across the world, generates disparities in benefits and burdens across both people and place. In this podcast, I discuss the justice dimensions of the energy transition, including its effects on frontline communities, energy insecure households, and those that do not have access to the various opportunities provided by the transition. I then discuss two of my recent research efforts. The first focuses on energy justice programs across the U.S., and the degree to which local entities are responding to vulnerabilities associated with the energy transition, or not, when they offer such programs. The second focuses on the increased prevalence of energy insecurity among American households during the COVID-19 pandemic, and which populations most impacted.

Dr. Sanya Carley is a Professor and Director of the Master of Public Affairs programs at the O'Neill School of Public and Environmental Affairs at Indiana University. Her research focuses on electricity and transportation policy, energy justice and a just transition, energy-based economic development, and public perceptions of energy infrastructure and technologies. She is a coeditor of the Journal of Policy Analysis and Management. She received her Ph.D. in public policy from the University of North Carolina at Chapel Hill and bachelor's degrees in economics and sustainable development from Swarthmore College.


Unanswered Questions: Our Energy Models.

Free Podcast

  • John Ballantine

June 16, 2020

How well do our energy models answer our questions -- do they provide frameworks to analyze our energy challenges? What price, how much supply:demand imbalance, and where should we invest? Over the past fifty years our energy models have evolved and become more sophisticated, however the questions remains, how well have they predicted prices and answered our changing energy (and climate) challenges?

In this slide podcast I will briefly describe five energy models that have attempted to answer different questions at different points in time.

  • Hoteling and Hubbert: resource supply curve and decline / peaks
  • Adelman and oligopoly market structure : influence and impact of major players
  • Partial and general equilibrium: regional supply mix, market demand and supply chains
  • VAR, price volatility, and complex oil market: supply and demand surprises with swing producers
  • Heterogeneous energy markets: Agent actions/behavior, game theory strategies

Of course, along with these models / frameworks we have market analysts trying to pick the winning players. Looking back we know that none of these models have been able to fully capture the boom-bust cycles of our energy markets, nor predict prices in two to three years. Nonetheless, over the past fifty years, our models have been able to been able to suggest new approaches. They have framed our thinking and helped some plan / invest for our changing energy landscape.

John W. Ballantine, Jr. is a senior lecturer at Brandeis International Business School. For the past twenty years he has taught courses in global economics, investments, and energy/climate to undergraduates and graduate students. He has a PhD in economics from the NYU Stern School and a masters degree in public policy from the University of Chicago. He has worked as a consultant with Arthur D. Little, a banker with Chase Bank, and a public relations analyst with Ashland Oil. Ballantine has been a research visitor with KAPSARC in Saudi Arabia. His current research involved agent based partial equilibrium models.

Mohammed AlMehdar, is an economics PhD candidate at Brandeis University building agent based energy models and writing his dissertation on complexity theory / computational economics


It is time to replace LCOE

Free Podcast

  • Gürcan Gülen

May 14, 2020

The levelized cost of electricity (LCOE) is commonly used by the media but is seriously flawed. It is of dubious value for long-term planning to meet growing electricity demand or even to reduce emissions at lowest system cost. It is useless in real-time system operations to balance demand and supply instantaneously while maintaining reliability. It doesn't capture regional differences of its inputs, specifics of each power system, or value of different operational characteristics to the system reliability. It is time to replace it. To build on its current prominence, today's generic LCOE can be augmented by the costs of system integration to get a system LCOE, which is still imperfect but a more accurate representation of overall system costs. For policy discussions, we need to add costs of externalities and subsidies. Only then, we have a useful metric, on which we can base discussions about a least-cost portfolio approach to transitioning electric power systems to achieve environmental and consumer goals.

Supplemental Information: Download

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Heterogeneity and Energy Policy

  • Janie Chermak

May 27, 2020

Local energy policy, at a state or country level, often finds limited support from residents. Heterogeneity of preferences is explored as a driver of this. In this podcast, I focus on the impact of heterogeneity on an "all of the above" energy policy in the state of New Mexico, where we find significant divergent preferences in a preferred energy plan specific to the type of energy, but consistency in terms of the importance of impact on jobs. While the focus is state specific, consideration of the impact of heterogeneity is general. This work was funded in part by National Science Foundation EPSCoR Cooperative Agreements OIA-1757207 and OAS- 1301346.

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Are electricity markets "markets"?

Free Podcast

  • Gürcan Gülen

May 14, 2020

Many still call the dynamic mishmash of policies, regulations, and design changes with constant battles at regulatory agencies and courts "a market". But, when a growing share of investments and operational decisions are taken on the basis of out-of-market compensation of many forms and sources rather than price signals, it is no longer possible to talk about a competitive market. In this podcast, I will support this view and offer an alternative to pseudo-markets of today.

Supplemental Information: Download

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The trials and tribulations of A&D during an oil price crash.

  • Helen Croskell

May 14, 2020

During times of economic uncertainty and volatility - from a financial or oil price crash or both - the acquisitions and divestment market tends to dry up. On top of that, sellers typically believe the value of their asset is still determined by the past oil price, but buyers are looking for a bargain. This is where creative deal terms such as contingent payments and swaps come to the fore. In this podcast I explore where we are today and what I expect to happen in the next eighteen months; and talk about four ways to bridge the valuation gap during uncertain times.

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Up the down staircase: What history teaches us about oil demand after a crisis.

  • Marie Fagan

April 20, 2020

Although the scale of oil demand destruction from the Covid-19 pandemic is unprecedented, it does not mean there are no precedents to help us think about what oil demand will look like after the crisis passes. London Economics International recently completed a study of 40+ years of global oil supply and demand shocks, to understand how oil demand responds after a crisis. What history teaches us is that declines in global oil intensity come in large stair-steps, not gradually. And once oil intensity drops down a stair-step, it does not fully recover to previous levels, even after many years.

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COVID-19 impacts on the oil markets and politics

Free Podcast

  • Severin Borenstein and Ryan Kellogg

April 2, 2020

Severin Borenstein and Ryan Kellogg discuss how the sudden downturn in oil demand is affecting suppliers and the politics of oil in the US. How does the extreme price drop affect US production levels from existing wells and drilling of new wells? What makes sense for US policy on the Strategic Petroleum Reserve when oil futures markets are in extreme contango? Ryan and Severin also discuss suggestions among some suppliers and politicians that the US should coordinate with OPEC and Russia to reduce world supply in order to "rationalize prices". They also look at the downstream impacts in refining and the much more drastic drop in the wholesale price of gasoline than diesel or heating oil.

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The US Oil and Gas Renaissance: Implications for Global Energy

Free Podcast

  • Guy Caruso

December 24, 2019

Tune in to the recent USAEE PODCAST with our former USAEE president and current CSIS Senior Adviser Guy Caruso. Guy discusses the geopolitical implications of the shale revolution, "energy dominance," the potential for peak demand, shale's impact on decarbonization efforts, and more.

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Regulatory Barriers to the Growth of Low Carbon Electricity

Free Podcast

  • Russel Gold

June 11, 2019

Author and journalist Russel Gold identifies regulatory barriers to the growth of low carbon electricity while discussing his new book, Superpower: One Man's Quest to Transform American Energy. He highlights pathways for overcoming those barriers, the importance of individuals in shifting energy paradigms, and the role of USAEE member research in the energy transition. The interview also includes an interesting twist on the classic chicken and egg challenge in Energy

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The Status of Women in Energy Leadership

  • Edie Fraser

December 6, 2018

Edie Fraser, founder and chair of STEMConnector and Million Women Mentors, was the keynote speaker at the 2018 USAEE/IAEE North American Conference in Washington, DC. Before her keynote, she agreed to talk in depth with USAEE about the status of women in leadership positions in the energy industries; which sectors of the energy world have been most successful about promoting women; and some specific success stories and larger lessons for all energy firms. Edie discusses how some of the challenges in the promotion of women to leadership roles can be addressed through changes in company culture and values, while others are more deeply rooted in the educational and professional pipeline for students in STEM fields.

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