LAW 5397, Energy Inc., 215 TUII
Dr. Michelle Michot Foss – Instructor
ENERGY INC.
(Agenda, Subject to Change)
Welcome to Energy Inc.! Energy Inc. is a business and public policy course on the energy industries.
Our focus is on global energy markets and policy through the lens of a “virtual company,” Energy Inc.
Students are required to work in teams on investment projects across the energy value chains and compete
for capital budget from Energy Inc.’s management. Students also are required to complete individual
assignments, including a review of actual peer companies using financial data for benchmarking.
Energy Inc. Course Materials
All course materials are available online from the IELE Web site or from other Web sites as designated in
this agenda. To access Energy Inc. online course materials provided by your instructor, go to the IELE
Web site, click on Energy and Environment Courses and Curricula, click on the Energy Inc. logo, and
enter the login and password information provided by the instructor. This link will take you directly.
http://www.energy.uh.edu/energy_inc.asp
Each of the 8 modules in this course has an online folder (). These folders will contain, at minimum,
the slide presentations used in our class discussions. They may contain other background materials as
well, such as news clippings or special reports that may be required by the instructor or that serve as
supplemental material for the course. A main folder for Energy Inc. is also on the web site. This folder
contains essential background on our company – our latest financial data, analyst reviews and
presentations, annual capital expenditure (capex) targets, and so on. A folder for Class Info contains this
agenda, your Rules of the Road, and other materials.
You are encouraged to also make use of the IELE web site. You can obtain background on the Institute,
our projects and programs, your instructor, and find useful energy resource links.
Principle Web Reference Materials for Course
A number of reference Web sites are provided for this course. You should become familiar with these
sites. Abundant resources exist throughout Web public domains for your projects and assignments.
Indeed, there is almost TOO MUCH information! Certainly, there is more information than we can
possibly process during one semester. Required materials are noted in this agenda. You should review
these for class discussions. Optional materials are not required, but browsing these will help you
participate in class discussions and enrich your experience. Your “snap assignments” (see Rules of the
Road) may draw from both required and optional materials, as noted in each assignment. For your team
projects, you should build a large and diverse knowledge base. A primary benefit of this course is that
you will compile an “energy library” for use well beyond your immediate needs this semester.
Energy Inc. Agenda – Page 1
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
U.S. Energy Information Administration (U.S. EIA). Get to know and love the EIA Web site!
Includes up-to-date Country Analysis Briefs (CABs) and fact sheets, special reports and links to other
Web sites, including the CIA Factbook for international risk assessment. Used for entire course.
www.eia.doe.gov
 Annual Energy Review (AER). This is one of your principal sources of historical data for the
course. You can obtain data on specific sectors or download the entire (huge) document for the
current year. It’s best to access sections relevant to each part of our course. Note the Glossary if you
are not familiar with energy terminology as well as useful conversion factors.
http://www.eia.doe.gov/emeu/aer/contents.html
 International Energy Annual (IEA; this acronym also stands for the International Energy
Agency in Paris, France, of which the U.S. is a member through the U.S. Department of
Energy). This also is one of your principal historical data sources for the course. Again, you can
download the entire document, or sections relevant to each part of our course. Note the Glossary if
you are not familiar with energy terminology.
http://www.eia.doe.gov/emeu/iea/contents.html
 Country Analysis Briefs (CABs). Important links to other Internet sites that provide valuable
information on specific countries.
http://www.eia.doe.gov/emeu/cabs/contents.html
 Annual Energy Outlook (AEO). Most recent available long term analysis and forecasts, U.S. (you
may want to download the current, 2003 report)
http://www.eia.doe.gov/oiaf/aeo/contents.html
 International Energy Outlook (IEO). Most recent available long term analysis and forecasts,
international.
http://www.eia.doe.gov/oiaf/ieo/index.html
 World Energy Balances. Supply-demand balances for individual countries.
http://www.eia.doe.gov/emeu/world/country/countrybal.html
 State Data. Recent data for all 50 states.
http://www.eia.doe.gov/emeu/states/_states.html
BP Statistical Review of World Energy. You can download the entire workbook or specific sections as
well as Excel spreadsheet data. Premier corporate publication on energy. Good source for all aspects of
the course.
http://www.bp.com/worldenergy/
American Petroleum Institute. Good selection of policy and educational materials on their site.
http://www.api.org
Naturalgas.org (Natural Gas Supply Association). The best natural gas industry resource site. You
should also use this site for background on operations across the oil and gas value chains.
http://www.naturalgas.org
Institute for Energy, Law & Enterprise. Location for electric power industry background information,
especially for Texas. Download Guide to Electric Power in Texas and our white paper, Electricity
Industry Restructuring in Texas-A Status Report (go to our Publications page).
http://www.energy.uh.edu/publications.asp
Our Web site is also a key location for liquefied natural gas (LNG) industry information.
http://www.energy.uh.edu/lng
Energy Inc. Agenda – Page 2
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
MODULE I. WORLD ENERGY OVERVIEW – GLOBAL SCAN
How does Energy Inc. “fit” into the world of energy?
Part A: Course Background
 Course background and objectives, “rules of the road,” semester agenda
 “Global scan” of world energy trends, outlooks, developments, energy industry organization
Required
 U.S. EIA, AER, Energy Perspectives: Trends and Milestones, 1949-2002
http://www.eia.doe.gov/emeu/aer/pdf/perspectives.pdf
 U.S. EIA, CABs: United States
http://www.eia.doe.gov/emeu/cabs/usa.html (for a very long term view, check out Energy in the
United States, 1635 to 2000, http://www.eia.doe.gov/emeu/aer/eh/frame.html)
 Most recent U.S. EIA, OPEC Fact Sheet
http://www.eia.doe.gov/cabs/opec.html
 Class Info
 Energy Inc.
 Module I
 International Energy Agency, 2003 World Energy Investment Outlook
Optional
 U.S. EIA, AEO – Overview
http://www.eia.doe.gov/oiaf/aeo/contents.html
 U.S. EIA, IEO – Highlights
http://www.eia.doe.gov/oiaf/ieo/preface.html
Part B: Overview of the Energy Value Chains
 Introducing “Energy Inc.”
 The energy value chain concept, U.S. energy flows
 Energy industry organization – key business segments, economics and financial performance
 Overview/discussion on energy policy and politics: environment, community, international relations
Required
 U.S. EIA, AER, Energy Flow Diagrams – Petroleum, Natural Gas, Electricity.
http://www.eia.doe.gov/emeu/aer/contents.html
 U.S. EIA, Performance Profiles of Major Energy Producers (most recent available). You can also
access previous editions online.
http://www.eia.doe.gov/emeu/perfpro/index.html
The EIA collects financial data from a sample of energy companies each year and compiles trends.
This link provides background on the Financial Reporting System.
http://www.eia.doe.gov/emeu/perfpro/index.html
 Energy Inc.
 Module I
Optional
 White House, National Energy Policy Plan
http://www.whitehouse.gov/energy/
Energy Inc. Agenda – Page 3
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
MODULE II. OIL AND GAS EXPLORATION AND PRODUCTION
What is Energy Inc.’s core oil and gas E&P business focus?
Part A: Discovery
 The discovery process and economics
 Scarce resources: Do we have enough?
Required
 U.S. EIA, AEO, Oil and Natural Gas Projections
 U.S. EIA Performance Profiles, all sections pertaining to oil and gas exploration and production
results
 “Betting the Planet,” New York Times Magazine, hard copy only, provided by instructor
 Energy Inc.
 Module II
 IEA, 2003 World Energy Investment Outlook
Optional
 Go to ChevronTexaco Learning Center for What is crude oil? and A Petroleum Prospecting
Primer.
http://www.chevron.com/learning_center/
 Go to Naturalgas.org for Overview of Natural Gas (all content) and Natural Gas – From Wellhead to
Burnertip for Exploration, Extraction, Production
http://www.naturalgas.org/
 Go to API for background on oil and gas exploration
http://api-ec.api.org/policy/index.cfm?bitmask=001001002000000000
Part B: Oil and Gas Field Services
 The role of oil and gas field services
 Business and strategic considerations for this sector
Required
 U.S. EIA, AER, review data on oil services activity in Energy Resources section (drilling, well
completions, seismic activity, expenditure trends)
http://www.eia.doe.gov/emeu/aer/contents.html
 Energy Inc.
 Module II
Part C: E&P Politics, Policy and Trends
 Politics, policy and market trends for the E&P business segment, U.S. and international
Required
 U.S. EIA, OPEC fact sheet
 Independent Petroleum Association of America (IPAA), fact sheets on access for resource
development and the international petroleum market
http://www.ipaa.org/govtrelations/factsheets/NaturalGasFutureDemand.asp
http://www.ipaa.org/govtrelations/factsheets/UnderstandingWorldPetro.asp
 White House, NEPP, E&P related sections
 U.S. EIA IEO – World Oil Markets and Natural Gas
http://www.eia.doe.gov/oiaf/ieo/preface.html
 Module II
 IEA, 2003 World Energy Investment Outlook
Energy Inc. Agenda – Page 4
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
MODULE III. THE OIL VALUE CHAIN
What are Energy Inc.’s key oil value chain issues?
Part A: From Discovery to Your Car
 Business process issues: From discovery to your car
 Discussion on worldwide oil industry restructuring: The business arguments for and against vertical
integration, economics of the refining and marketing businesses
Required
 U.S. EIA, Performance Profiles, all sections related to downstream oil (refining and marketing)
results
 Handouts on refining processes, hard copy only, provided by instructor
 Energy Inc.
 Module III
Optional
 Chevron Learning Center. What is a refinery? (including all links) and What is a service station?
(including all links).
http://www.chevron.com/learning_center/
 American Petroleum Institute, About Oil and Natural Gas. Extensive background information on
how we use oil and gas and related topics.
http://api-ec.api.org/about/index.cfm?bitmask=001002000000000000
Part B: Politics and Policy in the Oil Value Chain
 Politics and policy in the oil value chain: What should a national energy strategy include?
 The U.S. within the global context
Required
 Review the current OPEC Fact Sheet
 API, Policy Issues, taxes and motor fuels
http://api-ec.api.org/policy/index.cfm?bitmask=001001005000000000
http://api-ec.api.org/policy/index.cfm?bitmask=001001006000000000
 U.S. EIA IEO – all sections pertaining to oil refining and end use in World Energy and Economic
Outlook and World Oil Markets
 White House NEPP, oil refining and transportation related sections
 Module III
MODULE IV. THE NATURAL GAS VALUE CHAIN
What are Energy Inc.’s key natural gas value chain issues?
Part A: From Discovery to Burnertip – Your Furnace, Your Local Power Plant and Your Stuff
 Business process issues: from discovery to end use (wellhead to burner tip)
 Prospects and market trends, the U.S. within the global context
Required
 Go to Naturalgas.org. Use the sections Overview of Natural Gas (History), Natural Gas – From
Wellhead to Burnertip (Transport, Storage, Distribution, Marketing), Business Overview and
Natural Gas Regulation.
http://www.naturalgas.org/
 Go to API, About Oil and Natural Gas
Energy Inc. Agenda – Page 5
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
 U.S. EIA, AEO – all sections related to natural gas
 U.S. EIA IEO – Go to Natural Gas
 Energy Inc.
 Module IV
 IEA 2003 World Energy Investment Outlook
Part B: Reconstituting the U.S. Natural Gas Industry
 Politics and policy: Reconstituting the U.S. natural gas industry, from wellhead to burnertip, and
implications
 What should a national energy strategy include for natural gas?
Required
 Go to Naturalgas.org, History, Business Overview, Natural Gas Regulation.
 Review natural gas related sections in the National Energy Policy Plan (White House site)
 Module IV
You will need the links below for at least one Snap Assignment:
 From the U.S. EIA natural gas analysis page, http://tonto.eia.doe.gov/dnav/ng/ng_sum_analysis.asp:
 LNG Markets and Uses: June 2004 and the initial report, U.S. LNG Markets and Uses (note
references to UH IELE reports)
 Natural Gas 1998: Issues and Trends. Last complete analysis of natural gas industry
developments. SKIM ONLY to familiarize yourself with the current picture for the industry.
 Natural Gas 1996: Issues and Trends; Chapter 3, The Emergence of Market Centers and Hubs
and Natural Gas Market Centers and Hubs: A 2003 Update
 Natural Gas 1995: Issues and Trends; Chapter 3, Transportation Markets
 Natural Gas 1994: Issues and Trends; Chapter 2, The Natural Gas Industry Under Order 636;
Chapter 3, Natural Gas Contracting
 U.S. EIA, Status of Natural Gas Residential Choice Programs by State. Table of state-by-state
initiatives.
http://www.eia.doe.gov/oil_gas/natural_gas/restructure/restructure.html
 Serious students of the policy restructuring process will want to access the Federal Energy
Regulatory Commission (FERC) Web site. Go to Industries/Gas for background and recent and
past FERC actions.
http://www.ferc.gov/
MODULE V. THE ELECTRIC POWER VALUE CHAIN
What are Energy Inc.’s key electric power value chain issues?
Part A: From Generation to Your Light Switch
 Business process issues: From generation to end use
 Electric power outside of the U.S.
Required
 IELE, Guide to Electric Power in Texas, Third Edition (2003) and Electricity Restructuring in
Texas – A Status Report
http://www.energy.uh.edu/publications.asp
 Texas Electric Choice Resource Center
http://www.powertochoose.org/resources/default.asp
 Public Utility Commission of Texas Publications
http://www.puc.state.tx.us/publications/index.cfm
Energy Inc. Agenda – Page 6
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu

Electric Reliability Council of Texas, Electric Restructuring and News Room for extensive
materials on our state program
http://www.ercot.com/Index.htm
 U.S. EIA, electricity restructuring fact sheets
http://www.eia.doe.gov/cneaf/electricity/page/fact_sheets/facts.html
 U.S. EIA AEO – review all content on electricity and related environmental issues
 U.S. EIA IEO – Go to Electricity
 Energy Inc.
 IEA 2003 World Energy Investment Outlook
 Module V
Part B: Reconstituting the U.S. Electric Power Industry
 Politics and policy: Restructuring the U.S. electric power industry, the case of California-itis
 What should a national energy strategy include for electric power?
Required
 All resources in Part A
 U.S. EIA, Changing Structure of the Electric Power Industry: 2000 Update
http://www.eia.doe.gov/cneaf/electricity/chg_stru_update/update2000.html
 U.S. EIA AEO – review all content related to electric power
 Review electric power related sections in the National Energy Policy Plan (White House site)
 Cato Institute, Rethinking Electricity Restructuring
http://www.cato.org/pub_display.php?pub_id=2609
 Review Module VB folder, online course materials
Recommended, not required (but may be used for a snap assignment):
 At Texas Electric Choice, look at how you would choose your own retail electric provider (REP)
(hint – possible snap assignment!).
 U.S. EIA, The Changing Structure of the U.S. Electric Power Industry 1999: Mergers and
Other Corporate Combinations. Dated, but raises many of the still current issues with respect to
industry organization.
http://www.eia.doe.gov/cneaf/electricity/corp_str/corpcomb.html
 U.S. EIA, The Changing Structure of the U.S. Electric Power Industry: Selected Issues, 1998
http://www.eia.doe.gov/cneaf/electricity/chg_str_issu/summary/chg_str_issu_sum.html
 U.S. EIA, Status of State Electric Industry Restructuring Activity. Table of state-by-state
initiatives.
http://www.eia.doe.gov/cneaf/electricity/chg_str/restructure.pdf
 U.S. EIA, State Renewable Energy Requirements and Goals: Status Through 2003
http://www.eia.doe.gov/oiaf/analysispaper/rps/index.html
 The patchwork of state programs is complex. The National Association of Regulatory Utility
Commissioners (NARUC) Web site is a good place to link to individual state public utility
regulatory commissions for details.
http://www.naruc.org/displaycommon.cfm?an=15
 Serious students of the policy restructuring process will want to access the Federal Energy
Regulatory Commission (FERC) Web site.
http://www.ferc.gov/ (Go to Industries/Electricity for recent and past FERC actions; go to Regional
Transmission Organizations for recent dockets on regional transmission organizations and
Standard Market Design for the latest on this most complex of FERC’s electric power activities)
 Module V
Energy Inc. Agenda – Page 7
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
VI. ENERGY TRADING, MARKETING AND SERVICES
What are Energy Inc.’s key energy trading, marketing and energy services issues?
 Why we need ETMS and the role of wholesale markets
 How it works and strategic considerations
 “Enroned!” And the implications.
Required
 New York Mercantile Exchange. Go to the NYMEX Welcome page and click on About the
Exchange/How the Exchange Works. Go to Glossary for essential terms and concepts. Go to
Markets and click on Energy. Review descriptions of all energy contracts. Go to Markets/Market
Data to see current and historical quotes, charts and settlement data by commodity.
http://www.nymex.com/
 By far, the best treatment on Enron was in Business Week
http://www.businessweek.com/magazine/toc/01_51/B3762magazine.htm
 Energy Inc.
 Module VI
VII. ENVIRONMENT AND ALTERNATIVE FUELS
What are Energy Inc.’s key environment and alternative fuels issues?
 Environmental protection in the energy industries – the debate
 Alternative energy technologies
 What are companies doing? The corporate sustainability programs – window dressing or real stuff?
Required
 U.S. EIA AEO and IEO – all sections on environment and U.S. and world energy use
 MIT Technology Review, Global Warming Bombshell
http://www.technologyreview.com/articles/04/10/wo_muller101504.asp?trk=nl
 Corrections to the Mann et al (1998) Proxy Database and Northern Hemisphere Average
Temperature Series – under Supporting Materials, start with Background, Results, Frequently
Asked Questions (and Answers)
http://www.uoguelph.ca/~rmckitri/research/trc.html
 Taken by Storm
http://www.takenbystorm.info/index.html
 Cato Institute, The Increasing Sustainability of Conventional Fuels
http://www.cato.org/pubs/pas/pa341txt.pdf
 Cato Institute, Renewable Energy: Not Cheap, Not Green
http://www.cato.org/pubs/pas/pa-280.html
 FERC Proposes Rule for Wind Power Interconnection
http://www.ferc.gov/press-room/pr-current/01-19-05-wind.asp
 Houston Advanced Research Center, Mitchell Center for Sustainable Development, Corporate
Incentives and Environmental Decision Making
http://www.harc.edu/mitchellcenter/corporations/index.html
 Energy Inc.
 Module VII
Energy Inc. Agenda – Page 8
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
VIII. INTERNATIONAL ENERGY PROJECT DEVELOPMENT
What are Energy Inc.’s key international operations and business development issues?
Part A: Are Market Transformations Skin Deep?
 Worldwide trends – the emergence of free markets for energy
Required
 U.S. EIA, Privatization and Globalization of Energy Markets. This is a bit dated, but still a good
overview. More recent information on specific countries can be obtained from the CABs.
http://www.eia.doe.gov/emeu/pgem/contents.html
 U.S. EIA – Electricity Reform Abroad and U.S. Investment. Also a bit dated, but still good.
http://www.eia.doe.gov/emeu/pgem/electric/contents.html
 Module VIII
 IEA 2003 World Energy Investment Outlook
Part B: International Energy Project Development
 International energy project finance: upstream vs. downstream considerations
 The art of evaluating and managing political/country risk
Required
 Selections from Financing Energy Projects in Emerging Economies provided by instructor
 “The End of Corporate Imperialism,” Harvard Business Review provided by instructor
 U.S. EIA, World Energy Areas to Watch
http://www.eia.doe.gov/emeu/cabs/hot.html
 U.S. EIA, CABs on specific countries/regions to be announced.
 Module VIII
Optional
 U.S. Central Intelligence Agency World Factbook. Our main reference for background information
to be used in country analysis and political risk assessment.
http://www.odci.gov/cia/publications/factbook/index.html
Recommended, not Required (but very useful for international new ventures projects)
 Organizations that monitor human rights, civil freedoms and other issues:
http://www.oneworld.net/
http://www.transparency.de/
http://www.freedomhouse.org/
http://www.doctorswithoutborders.org/ (and while there, you can make a donation)
ENERGY INC. SCHEDULE (Subject to Change)
TOPICS
MODULE I. WORLD ENERGY
OVERVIEW
Part A: Course Background
Part B: Overview on the Energy Value Chains
MODULE II: OIL AND GAS
EXPLORATION AND PRODUCTION Part
A: Discovery, Part I
Part B: Oil and Gas Field Services
Part C: E&P Politics, Policy and Trends
Part A: Discovery, Part II, investment analysis
MODULE III: THE OIL VALUE CHAIN
TARGET
DATES
Jan 24
ASSIGNMENTS
Jan 31
Feb 7
Snap 1 Assignment Due
Feb 7
Feb 7
Feb 14
Feb 28
Mr. Fisoye Delano, UH IELE
Competitor Reports Due; Bill Leffler or Blake
Energy Inc. Agenda – Page 9
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu
TOPICS
Part A: From Discovery to Your Car
Part B: Politics and Policy in the Oil Value
Chain (Downstream)
MODULE IV: THE NATURAL GAS
VALUE CHAIN
Part A: From Discovery to Burnertip - review
Part B: Reconstituting the U.S. Natural Gas
Industry – review and business considerations
TARGET
DATES
ASSIGNMENTS
Eskew (tentative)
Mar 7
Feb 21/Mar
7
Follow up to Feb 21 session with Gail Watkins,
Akin, Gump and Charles Moore, LeBoeuf, Lamb
and U Alberta group
Energy Inc. Team Proposals Due
Spring Break
MODULE V: THE ELECTRIC POWER
VALUE CHAIN
Part A: From Generation to Your Light Switch
Part B: Reconstituting the U.S. Electric Power
Industry (overview)
Part B: Reconstituting the U.S. Electric Power
Industry – Electric Power Business
Considerations
SUMMARY AND REVIEW –
GAS/POWER VALUE CHAIN
MODULE VI: ENERGY TRADING,
MARKETING AND SERVICES
MODULE VII: ENVIRONMENT AND
ALTERNATIVE FUELS
MODULE VIII: INTERNATIONAL
ENERGY PROJECT DEVELOPMENT
Part A: International Energy Project
Development
Part B: Are Market Transformations Skin
Deep?
Final Class
Mar 14
Mar 21
Exam Period – NO FINAL EXAM
May 5, 69PM
Dr. Gürcan Gülen, UH IELE; Snap 2 Assignment
Due (issued March 9)
Mar 28
Kathy Magruder (invited)
Mar 28
If needed
Apr 4
Deniese Palmer Huggins, Prudential (invited)
Apr 11
Snap 3 Assignment Due (issued April 6); Rob
Bradley, IELE (invited)
Apr 18
Apr 25
Andrew Slaughter, Shell E&P
May 2
Energy Inc. Board of Directors Meeting
Presentations
Final Team Project Reports (due by 9PM)
Energy Inc. Agenda – Page 10
Institute for Energy, Law & Enterprise, University of Houston, www.energy.uh.edu