Download Goals/Aims Unit Objectives COURSE TITLE: ECON 3068 ENERGY

COURSE TITLE: ECON 3068 ENERGY ECONOMICS II
Course Description
This course is tailored for the student desiring an understanding of the relationship between the mineral
sector including energy and the wider economy. It covers additional topics in Petroleum Economics, with
emphasis on tracing the macroeconomic impact and implications of oil and gas sector decisions. Topics to
be covered include oil price shocks and the global economy, the problems associated with managing
resource generated wealth, transparency, resource based industrialization, depletion policy and
environmental issues
Purpose of the Course
The course is intended to lead students to an appreciation of the role of the energy industry in the global
economy and the issues associated with managing resource based economies.
Instructor information
Name of instructor(s)- Michael John
Office address and phone Mobile 771-0904
E-mail address : [email protected] , [email protected]
Office hours: To be advised
Communication policy – preferred method of contact - E-mail
Goals/Aims
The main goal is to provide students with an understanding of:
• How energy (oil and gas) drives the global and local economy, and
• The challenges of transformation beyond the dominance of energy sector.
• Issues of resource management, Climate change mitigation and adaptation and energy
Unit Objectives
Unit 1 Oil Price shocks and the global economy
Students should be able to :
o Classify and explain the types of oil price shocks
o Analyze the impact on different economies
o Critique the policy responses
Unit 2 The Caricom Energy Challenge-The search for Solutions
Students should be able to :
o Describe the patterns of Caricom energy use
o Explain the energy challenges facing the Caricom States
o Compare the different approaches adopted
o Critique the solutions applied by different states
Unit 3 Petroleum and the macro economy-Concepts
Students should be able to :
o Explain the role of natural resources in economic development
2
o
o
o
o
Analyze the impact on different economies
Identify the key theoretical perspectives on resource based economies
Compare and contrast the various theoretical perspectives
Critique the various policy prescriptions of these perspective
Unit 4 The Challenge of macroeconomic management in Oil and Gas exporting Economies
Students should be able to :
o Compare the economic management strategies of different oil and gas exporting states
o Explain the concepts of the resource curse thesis and Dutch disease
o Analyze the approaches of economies viewed as escaping the curse
o Critique the different approaches to the management of resource rents
o Evaluate the merits and demerits of Heritage Funds
Unit 5 The Petroleum Sector and Industrial Strategy
Students should be able to :
o Explain the concept of resource based industrialization
o Appraise the history and significance of national ownership of energy resources in Trinidad
and Tobago
o Critique the policy of Local content and participation
Unit 6 Energy Policy Issues
Students should be able to :
o Explain the concepts of depletion, Energy dependence, Peak oil
o Evaluate the Extractive Industries Transparency Initiative
o Analyze the impact of the energy sector on climate change
o Critique the impact adaptation and mitigation strategies on energy and the economy
o
Assignments
Students will complete three assignments during the semester. Each student must deliver two tutorial
presentations on questions from the tutorial sheets. The second assignment –an Essay provides an
opportunity to practice the analysis of industry issues. Thirdly students will be involved in a group project to
be completed three weeks before the teaching ends.
Course Assessment
Assessment is designed to establish the student understanding of the material and the ability to critically
treat with energy matters and issues. Students will be assessed on the following basis:
Course Work 40%
• Course Work Quiz 1:Multiple choice questions covering Units 1 and 2: - 5 %
• Course Work Essay covering Unit 4: - 5%
• Two(2) presentations of tutorial questions Units1-6 : 10 %
• Group Project 20%
Final Examination: 60 %. This examination will be two and a half hours long and consist of five essay
questions of which students will be required to select three questions.
TEACHING
STRATEGIES
CLASS FORMAT
Students will have three (3) contact hours for lectures weekly
• Lecture time -Thursday (FSS 100E), 9-12 am,
Lectures
2
3
GROUP PROJECT
TUTORIALS
This is a lecture discussion course. Student participation is encouraged and
expected. Students are encouraged to read assigned material before the
scheduled class, so that they can participate meaningfully in the class
discussion. From time to time additional readings may be added to the course
as may be deemed to be relevant and necessary.
The group project will be used an a learning tool facilitation discovery and
practice in analysis of energy issues
Students will have one (1) contact hour for tutorials weekly. Tutorials
will normally begin two weeks after lectures. Please check the notices posted
at the Department of Economics for further information.
Tutorial sheets are designed to help students internalize and apply concepts
taught during the lectures. It is expected that students will complement
material covered in the lecture sessions with use of the recommended
references. Students will be provided with tutorial questions which they are
required to prepare before the weekly tutorial session. Every effort should be
made to complete each tutorial sheet and please ensure that you prepare the
tutorial questions to maximize your benefits from the tutorials. Each
student will be expected to deliver two (2) tutorial presentation and at
least an 80% tutorial attendance is expected .
Attendance
Students are expected to maintain at least an 80% attendance of
Tutorial classes. As such attendance records will be kept.
RESOURCES
Recommended books
Mottley,Wendell Trinidad and Tobago Industrial policy 1959-2008 :A
historical and contemporary analysis , Ian Randle Publishers, 2008
IPCC Fourth Assessment Reports- The AR 4 Synthesis Report
3
4
READINGS
Unit 1. Oil price
Impact of price shocks on major economies and developing countries
shocks and the
Global Economy
Berument, M.
Hakan; Ceylan,
Nildag Basak;
Dogan, Nukhet
Jacquinot, Pascal;
Kuismanen, Mika;
Mestre, Ricardo;
Spitzer, Martin
Huntington,
Hillard G
Nordhaus, William
D
Jones DW, Paul N.
Leiby, Inja K. Paik
Selim Elekdag,
Rene Lalonde,
Douglas Laxton
and Dirk Muir and
Paolo
Pesenti
IMF
OECD
Ali Hussain
Maysoun An Bar
2. Caricom
Energy Problem
The Impact of Oil Price Shocks on the Economic Growth of
Selected MENA Countries. Energy Journal, 2010, Vol. 31 Issue
1, p149-176, 29p;
An Assessment of the Inflationary Impact of Oil Shocks in the
Euro Area. Energy Journal 2009 Vol .30 Issue 1
Oil Shocks and Real U.S. Income Energy Journal,
2007, Vol. 28 Issue 4, p31-46, 16p;
Who's Afraid of a Big Bad Oil Shock? Brookings Papers on
Economic Activity, 2007, Issue 2, p219-238, 20p, 3 charts, 5 graphs
Oil Price Shocks and the Macro economy: What Has Been
Learned Since The Energy Journal 1996 Vol, 25 No 2
Oil price movements and the Global Economy: A model
based assessment, IMF Staff Papers Vol. 55, No. 2, 2008
The Impact of Higher Oil Prices on the Global Economy; IMF
research Department 2004. **
Oil Price Developments: Drivers , Economic Consequences
and Policy Responses ; OECD Economic Outlook No. 76 Dec
2004.***
The Long Term Benefits of Higher Oil Prices Middle East
Economic Survey Vol .LVII. No.11 March 2005***
Impact of Soaring Oil prices on the World Economy Al
Hyat 23/1/06*
Williams, James L
The Coming Oil Crisis. Oil and Gas Journal Feb. 2003.**
The search for solutions
G McGuire
G McGuire
Tewarie, Dr.
Bhoendradatt
Government of
Jamaica /
Venezuela
Anthony Wood
Eastern Caribbean
Gas Pipeline
Company
Caribbean Energy Condition. Mimeo UWI June 2004
Caricom Impotence on LNG dispute. Mimeo August 2005**
Impact of High Oil Prices on OECS region Addressto South
ChamberTrinidad and Tobago Petroleum Congress ; February
2005.*
Petrocaribe Agreement; September 2005.***
The Case Against Petrocaribe. Barbados Advocate News; 18/9 05
The Eastern Caribbean Gas Pipeline: Presentation to the Trinidad
and Tobago Chamber of Industry and Commerce
4
5
Phillip, D
Farrell, T
3 Petroleum and
the Macroeconomy
The Caricom Petroleum Market MSc. Thesis UWI (1980)*
Caricom Oil Market UWI St. Augustine 1982*
Economic models of resource based economies
Measuring Economic Impact.
o Oil and Gas Taxation Regimes.
o
o
Wright Gavin ,
Jesse Czelusta
Macartan
Humphreys, Jeffrey
D. Sachs, and
Joseph E. Stiglitz
Auty, RM
Seers, Dudley
Best L and St. Cyr
The Myth of the Resource Curse. Challenge vol. 47, no. 2,
March/April 2004, pp. 6–38
Escaping the resource curse Chapter1 & 12 Escaping the Resource
curse.
Resource Abundance and Economic Development, Oxford
University Press 2001.Chap.111
The Mechanism of the Open Petroleum Economy, S.E.S
Modeling the Trinidad and Tobago Economy Staff paper Trinidad
and Tobago Institute of the West. Indies -2004
Jobity , R
Unit 4 Resource
Based
economies
Impact of Natural Gas on the Trinidad and Tobago economy
Gasco News , Vol 17.No.2
SEMP
What is a Rentier State ( Mimeo)
Challenges of Macroeconomic management in oil and gas exporting countries
Velculescu Delia
and Saqib Rizavi1
Devlin Julia and
Michael Lewin
Stevens Paul
Auty, R:
Auty R, and A
Gleb
Jahangir
Amuzurgar:
Jeffery Davis et al
Karl, Terry Lynn
Karl, T and Ian
Gary
Davis, JM (ed).
Mortamen, H.
Trinidad and Tobago: The Energy Boom and Proposals for a
Sustainable Fiscal Policy IMF Working Papers, October 2005
Managing Oil Booms and Busts in Developing Countries in
Managing Volatility and Crises -A Practitioner’s Guide
Resource Impact –curse or Blessing? A Literature Survey Centre for
Energy, Petroleum and Mineral Law and Policy
University of Dundee, Dundee 2003
How Natural Resources affect economic development –
Development Policy Review Vol18# 4 Dec 2000
Oil windfalls in a small parliamentary democracy their impact on
Trinidad and Tobago (1986) World Development , Vol.14 , # 9,
Managing Oil Wealth: OPEC’S Windfalls and Pitfalls.
Stabilization and Savings Funds for non renewable resources,
experience and fiscal policy implications International Monetary
Fund: Washington DC2001
The Paradox of Plenty: Oil Boom and Petro states (University of
California Press 1997.)
The Global Record Foreign Policy in Focus Petro Politics Special
Report Jan. 2004
Fiscal Policy Formulation and Implementation in Oil Producing
Countries. IMF 2003
The Expenditure of Oil Revenue
5
6
Unit 5 Energy
sector and
Industrial
Strategy
o
o
o
Production possibilities from gas.
Resource based industrialization revisited.
Creating sustainability from oil and gas: options and constraints
Motley Wendell
Auty, R.M.
Barclay, L
Farrell, TMA
Furlonge, H
Baisden , C
GOTT
McGuire G.
Punnett, C and
John B.
Unit 6. Energy
Policy Issues
Trinidad and Tobago Industrial policy 1958-2008 Chapters 1,2
and 3.
Resource –based industrialization; Sowing the oil in eight developing
countries Clarendon Press, New York 1990
FDI Facilitated Development ; The case of the Natural Gas Industry
in Trinidad and Tobago.( Mimeo) UWI Mona 2003
Worship of the Golden Calf. An oil exporters Industrial Strategy
Technology Policy and Project Planning in the Boom Years, Dep’t
Economics UWI St Augustine 1987
The Business of Developing an Integrated Gas Industry in Trinidad
and Tobago. Gasco News Vol 15 # 2(2002)
New Horizons for Ethylene – The challenge of implementing a local
ethylene cracker Gasco News Vol 15 # 2 (2002)
Vision 2020 Report of the Energy Subcommittee – Ministry of
Planning, Port of Spain 2004. Chap 6-and 7
Natural Gas as the Motor of Economic Development. Gasco News
Vol 14# 3
The philosophical and policy underpinnings of the local Natural Gas
Industry. Gasco News Vol.14#3
1. Energy Independence and Depletion policy
2. Environmental Issues:
a. Climate change and the energy sector
b. Kyoto Protocol
c. Alternative Energy
3. Governance Issues; Extractive Industries Transparency Initiative.
Mitchell, John V.
Ending Dependence : Hard Choices for Oil- Exporting States A
and Paul Stevens
Chatham House Report2009
Gordon Richard L.
Pantin D (1980):
John Hartwick
(ed).
Hicks, Hayek, Hotelling, Hubbert, and Hysteria : Energy,
Exhaustion, Environmentalism, and Etatism in the21st Century The
Energy Journal, Vol. 30, No. 2. IAEE 2009
Resource Depletion Theories and Planning in Mineral Exporting
Economies with particular reference to Petroleum
Exporters. OPEC Review. Vol 4 # 4
The Economics of Natural Resource Use, 2nd Ed. Addison Wesley
Publishers 1998, Chapter 8
Extractive Industries Transparency Initiative
www/eitransperancy.org
Painuly, Jyoti
The Kyoto Protocol, Emissions Trading and the CDM : An analysis
from Developing Country Perspective. IAEE Journal
Volume
26# 3
6
7
Daniel J.A.
Johansson,
Christian Azar,
Kristian Lindgren
and Tobias A.
Persson
Opec strategies and oil rents in a climate conscious world
R.E.H. Sims, R.N.
Schock, A.
Adegbululgbe, J.
Fenhann, I.
Konstantinaviciute
W. Moomaw, H.B.
Nimir, B.
Schlamadinger,
Climate Change 2007: Working Group III: Mitigation of Climate
Change Chapters, 4, 5, 6, 7. IPCC 2007
The Energy Journal, Vol. 30, No. 3. IAEE 2009
Additional and updated readings will be provided as lectures progress
Course Calendar**
Lecture
no
1
2
Date
Jan. 27
Feb 3
3
Feb 10
4
Feb 17
5
Feb 24
6
March 3
7
March 10
8
March 17
9
10
11
March 24
March31
April 7
12
April 14
13
April 21
Assignment Due
Course Overview – Analysis and Thought
Oil and the global economy – GDP
Intensity , oil shocks Impact and policy
responses
Oil and the global economy- Impact and
policy responses
Caricom Energy problems and responses
–San Jose to Petrocaribe. LNG
Petroleum and the macro economy –
Concepts and issues
Petroleum and the macro economy Applications
Macroeconomic management in oil
producing states I- challenges
Macroeconomic management in oil
producing states
Oil and gas and Industrial Strategy I
Oil and gas and Industrial Strategy II
Energy Policy Issues –Dependence
Depletion and Governance
Energy Policy Issues –The Environment,Kyoto, Climate Change and Alternative
energy
Revision Lecture
7
Quiz
Project Theme
selection
Completion of First
tutorial Presentation
Project plans due
Essay
Group Project due
Final tutorial
presentation
8
Additional Information
Grading System
The University grading system will be followed.
GRADE
A+
A
AB+
B
BC+
C
CD+
D
F
GPA
4.3
4.0
3.7
3.3
3.0
2.7
2.3
2.0
1.7
1.3
1.0
0.0
MARKS%
86 and Over
70 -85
67 -69
63 -66
60- 62
57- 59
53 -56
50 -52
47 -49
43 -46
40 -42
0 - 39
8