Welcome!

Welcome!

About this course: learning goals

By the end of this course, you will:

1. be familiar with the major sectors of Alberta's energy economy;

2. understand the key local and global drivers for energy supply and demand;

3. be able to relate popular press discourse about energy economics to basic economic models;

4. understand the implications of climate change policies for the global and local energy economy;

5. be able to access, present, and interpret relevant energy and economic data;

Class delivery

• Regular MW class meetings will be in person unless circumstances force us online; I will not teach in person if I am putting you at risk
• Friday classes will be an asynchronous class which I will use for R lessons, data exercise reviews, and other similar material to let you work through the data work at your own pace
• I do not plan to record or stream class content for in-person meetings, although I may make exceptions on a case-by-case basis (pre-midterm and pre-final classes, for example)

Materials

• Canvas and my personal class website

• slides and data exercises

• practice questions

• podcasts and other media

• data and other resources

• pre-exam practice problems

• there is no textbook

Communication

• Canvas announcements

• Email me: aleach@ualberta.ca

• Code and data help: leachandrew or my projects page

• My Twitter: @andrew_leach

• Class discussion and lecture materials

• Periodic energy charts Substack

Assignments

Tips for Success

• Attend class;

• Take notes;

• Do any data exercises and problem sets;

• Work together;

• Ask questions, participate, and drop by during my office hours;

• Read the Energy Charts weekly and other sources I provide to you;

• Don't struggle in silence, you are not alone!

Roadmap for the Semester (1/3)

Introduction

Concepts: RMarkdown; Quarto; Data sources(e.g. EIA; CER; AER; AESO; CANSIM; ECCC; IEA; BP)

The Global Energy Economy

Concepts: Total primary energy supply; supply; demand; electricity generation vs. capacity; climate change.

Roadmap for the Semester (2/3)

Oil and gas markets

Concepts: OPEC; WTI; Brent; AECO/NIT; Henry Hub; fractionation; backwardation; contango; storage; inventories; sweet vs. sour crude or gas; well-head prices; pipeline gas.

Oil and gas production, reserves, resources

Concepts: conventional vs. unconvential extraction; shale gas; light tight oil; fracking; in situ vs. mined oil sands; type curves; 1P and 2P reserves; company-level vs. country-level reserves; capital vs. operating costs; supply cost and net present value of an oil project.

Roadmap for the Semester (3/3)

Pipelines and Downstream Processing

Concepts: tolls; common carrier; open season; diluent recovery unit; Canadian Energy Regulator Act; cost-of-service regulation.

Electricity

Concepts: duration curves; cost-of-service; merit order; ancillary services; energy storage; prices and riders; rate regulation; electrification.

GHG Policy

Concepts: marginal abatement cost; marginal damage; carbon budgets; POGG; tax; output-based allocation; GHG; Kyoto; Copenhagen; Glasgow; IPCC; UNFCC; COP.

A reminder on positive and normative statements

• Economics alone can't tell you the right decision
• A positive statement is a statement of what is or what will happen and describes reality.
  • If you increase the costs of production, consumer prices will go up.
• Positive statements can reflect uncertainty about outcomes
• A normative statement concerns what somebody believes should happen:
  • “The government should tax greenhouse gas emissions.”
  • Normative statements cannot be tested because they imply value judgments which cannot be refuted by evidence.
• Normative statements can inform objective functions
  • A decision-maker might value a policy which does not increase inequality
  • Economists can provide constrained advice: this policy accomplishes your objective and is unlikely to increase inequality