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THE UNIVERSITY OF THE WEST INDIES

ST.AUGUSTINE

DEPARTMENT OF ECONOMICS

ECON 3068: Energy Economics II

Semester III, 2015/2016

Course Credits: 3

Course Status: Elective for Bachelor in Economics Programmes

Prerequisite: Econ 3067 – Energy Economics 1

Course Coordinator: Michael John

Course Instructors: Ms. Janelle D. Spencer

janelle.spencer@gmail.com

Mr. Michael John

(868) 771-0904

michael.john@sta.uwi.edu

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1. Course Description

This course is tailored for the student desiring an understanding of the relationship between the

energy sector and the wider economy. It covers additional topics in Energy Economics, with

emphasis on tracing the macroeconomic impact and implications of energy 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. This will be achieved via the combination of lectures,

presentations and debate as well as case studies while assessment will be done through the use of

individual and group assignments, quizzes and a Final Examination.

2. Course Rationale

The course is intended to lead students to an appreciation of the role of the energy industry in the

national and global economies and the issues associated with managing resource based

economies.

3. Course Goal

This course is designed to lead students to a greater appreciation of how the energy industry

drives the macro-economy, the challenges of economic management of the resource based

economy, the challenge transformation beyond the dominance of energy sector.

4. Course Content

As we explore the importance of energy to the macro economy the material is divided into two

sections - the theoretical foundations in which we explore the economic models of the resource

rich economy and extend the discussion to managing such economies and resource based

industrialization. In the second section we explore a number of policy issues as the emerge in

terms of prominence e.g. The impact of Energy Price Shocks, Energy Investment, Energy Access,

and Depletion, Governance and the Extractive Industries Transparency Initiative and Climate

Change issues including the Clean Development Mechanism..

5. Learning outcomes:

At the end of the course students will be able to should:

1) Summarize the evolution of crude oil pricing

2) Critique the different theoretical perspectives on resource based economies and their policy

prescriptions

3) Explain the concepts of the resource curse thesis and Dutch disease

4) Critique the different approaches to managing resource rents

5) Compare and contrast Resource Based Industrialization with Energy Based Economic

Development

6) Evaluate Trinidad and Tobago’s Local Content and Participation Initiative

7) Analyze the challenges of financing energy supply.

8) Evaluate the performance of Trinidad and Tobago as a member of the EITI

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6. Course calendar:

Week Topics Readings/Resources Activities including

Assessments 1. Course Overview-

Part I

Foundations Understanding Oil pricing

Bhattacharyya S.C.: Energy Economics Concepts, Issues, Markets and Governance, Springer-Verlag., 2011 Chapter 19

Fattouh, Bassam : An anatomy of the crude oil pricing system, Oxford Institute for Energy Studies, 2011

John Baffes, M. Ayhan Kose, Franziska Ohnsorge, and Marc Stocker The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses http://www.worldbank.org/content/dam/Worldbank/Research/PRN01_Mar2015_Oil_Prices.pdf

Introductory Lecture

Outline of the course, assessments and requirements for success

Class discussion on the recent fall in oil and gas prices

2. Energy and the macro economy – Concepts and issues:

Plantation Economy

Open Petroleum Economy

The Rentier State

The Resource Curse Thesis and Dutch Disease.

Seers, Dudley: The Mechanism of the Open Petroleum Economy, S.E.S also in Pantin (ed.) The Caribbean Economy- A Reader Ch. 6

St Cyr, Eric : Some Fundamentals in the Theory of Caribbean Economy in Pantin (ed.) The Caribbean Economy- A Reader Ch. 7

Best, Lloyd and Kari Levitt, Critical Review of the contributions of W.A. Lewis and Dudley Seers to Issues of Industrialization and Employment in the Caribbean in Essays on the Theory of the Plantation Economy UWI Press 2009 Ch. 8

Yates, Douglass, A. The Rentier State in Africa: Oil Rent Dependency and Neo-colonialism in the Republic of Gabon, Trenton NJ, Africa World Press 1996 Chapter 1

Auty, RM Oil and Development in the Middle East, BRISMES Annual Conference 2012, Revolution and Revolt: Understanding the Forms and Causes of Change 26-28 March 2012, London School of Economics and Political Science

Lederman, Daniel and Maloney,

William, In search of the Missing

Resource Curse, Economia, Fall 2008

Van der Ploeg Natural Resources: Curse or Blessing? Journal of Economic Literature 2011, 49:2, 366–420

Pre-lecture review exercise to assess knowledge

Lecture

Tutorials begin Class Discussion

Project Assignments: 1) Local Content in Energy

in Trinidad and Tobago 2) Financing Local

Independent Oil Producers

3) Assessing the impact of the Trinidad and Tobago Chapter of the EITI

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Week Topics Readings/Resources Activities including

Assessments 3. Macroeconomic

management in resource rich countries

Mc Guire G. Managing the Resource-

based Economy in times of Plenty, in

Boopsingh & McGuire From Oil to Gas

and Beyond, University Press of

America, 2014

Pantin Dennis , Governance in Natural Resource Based Rentier Economies in the Caribbean in Pantin (ed.) The Caribbean Economy- A Reader Ch.28

Lecture

Tutorial Individual Presentations & Class Discussions

4. The Energy Sector and Industrialization Resource-based Industrialization Energy Based Economic Development- :

Concepts, Definition & Processes

Policies, Challenges & Common themes

Auty, R.M. Resource-based industrialization; Sowing the oil in eight developing countries, Clarendon Press, New York 1990

Motley Wendell, Trinidad and Tobago Industrial Policy 1958-2008 Chapters 1, 2 and 3.

Barclay, L FDI Facilitated Development ; The case of the Natural Gas Industry in Trinidad and Tobago.( Mimeo) UWI Mona 2003

Boopsingh T M . The Last Decade- Liquefied Natural Gas and its Impact, in Boopsingh & McGuire From Oil to gas and Beyond, University Press of America, 2014

Furlonge, H & M. Kaiser Overview of Natural Gas Sector Developments in Trinidad and Tobago, International Journal of Energy Sector Management Vol. 4 No. 4, 2010, Emerald Group Publishing Limited.

GORTT Trinidad and Tobago Energy Sector Local Content and Local Participation Policy Framework. www.energy.gov.tt

Paul A.E. Maximizing National value-Ownership, National Participation Local Content and sustainable Development, in Boopsingh & McGuire From Oil to gas and Beyond, University Press of America, 2014

Carley S. and Lawrence, S. Energy-Based Economic Development, Springer-Verlag London 2014 chs 1-4.

Lecture

Tutorial Individual Presentations & Class Discussions Project Outlines and Questionnaires Due

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Week Topics Readings/Resources Activities including

Assessments 5. PART II Energy Issues –

Energy Security-

Concepts & Issues

Winzer, C. Conceptualizing Energy Security EPRG, 2011, www.eprg.group.cam.ac.uk

Bambawale J.M & Sovacool B.K Energy Security: Insights from a Ten Country Comparison, Energy and Environment Vol. 23 No4, 2012.

Bhattacharyya, Subes C.: Energy Economics Concepts, Issues, Markets and Governance, Springer-Verlag, 2011, ch. 20

IEA Focus on Energy security: Costs, benefits and Financing of Holding Emergency Oil stocks, 2013

IEA Measuring short term Energy Security, 2011, www.iea.org

Verleger, P.K. The Amazing Tale of US Energy Independence, International Economy Spring 2012.

Coursework Quiz

Lecture

Tutorial Individual Presentations & Class Discussions

6. CARICOM Responses to the Energy Security Problems Policy Issues I-Investment, Energy Access

Bryan A.T. Trinidad and Tobago and its Neighbours, in Boopsingh & McGuire From Oil to gas and beyond, University Press of America, 2014

McGuire G. Caribbean Energy Condition. Mimeo UWI June 2004

Modi, V., S. McDade, D. Lallement, and J. Saghir. 2006. Energy and the Millennium Development Goals. New York: Energy Sector Management Assistance Programme, United Nations Development Programme, UN Millennium Project, and World Bank.

UNFCC Modalities and procedures for a clean development mechanism as defined in Article 12 of the Kyoto Protocol http://cdm.unfccc.int/Reference/COPMOP/08a01.pdf#page=6

Pielke Jr., Roger and Bazilian, Morgan :Defining Energy Access for the World’s Poor, Issues in Science and Technology Fall 2013

Pielke Jr., Roger and Bazilian, Morgan :Making Energy Access meaningful, Issues in Science and Technology Summer 2013

Lecture

Tutorial Individual Presentations & Class Discussions

Draft Projects Due*

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Week Topics Readings/Resources Activities including

Assessments 7. Policy Issues II-

Governance, EITI, Regulation Policy Issues III– Environment- Climate change, Kyoto Protocol, CDM, and Alternative Energy penetration

EITI Drilling down the Civil society Guide to Extractive Revenues and the EITI, http://eiti.org/files/DrillingDown-Eng_1.pd

Bhattacharyya, Subes C.: Energy

Economics Concepts, Issues, Markets

and Governance, Springer-Verlag,

2011, chapters, 18- 22.

Lecture

Tutorial Individual Presentations & Class Discussions Group Projects Due

8. Course Review; Clarification of Issues etc. (no introduction of new subject matter)

Review Lecture .

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Alignment of Assessment with Learning Outcomes

Method of course presentation

The course consists of 36 contact hours delivered through lectures and tutorials (24 hours of lectures and 12 hours of tutorials) over twelve weeks. The course will be examined by a group project, one (1) coursework quiz, Tutorial presentations and a final examination. Three hours are also scheduled for a review of the course material in week 13. The Final Examination will be a two (2) hour examination consisting of 5 or 6 essay questions of which the student will be expected to do three.

Course Assessment:

Coursework: 40% Group Project: 25 % Course Work Quiz: 10 % Tutorial Presentation: 5 %

Final examination: 60%

Recommended textbooks:

a. Required/Essential

Boopsingh T & McGuire G.: From Oil to Gas and Beyond, University Press of America, 2014

Bhattacharyya, Subes C.: Energy Economics Concepts, Issues, Markets and Governance,

Springer-Verlag, 2011,

Other readings to be posted on My E-learning

Assessment Method

Learning Outcomes (Corresponds to list in Section 5)

Weighting Assessment Description

Duration

LO 1

LO 2

LO 3

LO 4 LO 5

LO 6

LO 7

Lo8

Oral Tutorial Presentation

X X X X X X X X 5% In-course

Assessment

Group Project

X X X 25%

In-course assessment

Quiz

(30 Multiple Choice Questions)

X X X X X 10% In-course

Assessment 60

minutes

Extended Response Questions

X X X X X X X X 60% Final

Examination 2 hours

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Additional Information

Students are reminded of the University’s Examination Regulations:

Examination Regulations for First Degrees, Associate Degrees, Diplomas and Certificates including GPA

Regulations

General Examination Regulation

19. Any candidate who has been absent from the University for a prolonged period during the teaching of a particular course for any reason other than illness or whose attendance at prescribed lectures, classes, practical classes, tutorials, or clinical instructions has been unsatisfactory or who has failed to submit essays or other exercises set by his/her teachers, may be debarred by the relevant Academic Board, on the recommendation of the relevant Faculty Board, from taking any University examinations. The procedures to be used shall be prescribed in Faculty Regulations.

97. (i) Cheating shall constitute a major offence under these regulations

(ii) Cheating is any attempt to benefit one’s self or another by deceit or fraud.

(iii) Plagiarism is a form of cheating.

(iv) Plagiarism is the unauthorized and/ or unacknowledged use of another person’s intellectual effort and creations howsoever recorded, including whether formally published or in manuscript or in typescript or other printed or electronically presented form and includes taking passages, ideas or structures from another work or author without proper and unequivocal attribution of such source(s), using the conventions for attributions or citing used in this University.

103. (i) If any candidate is suspected of cheating, or attempting to cheat, the circumstances shall be reported in writing to the Campus Registrar. The Campus Registrar shall refer the matter to the Chairman of the Campus Committee on Examinations. If the Chairman so decides, the Committee shall invite the candidate for an interview and shall conduct an investigation. If the candidate is found guilty of cheating or attempting to cheat, the Committee shall disqualify the candidate from the examination in the course concerned, and may also disqualify him/her from all examinations taken in that examination session; and may also disqualify him/her from all further examinations of the University, for any period of time, and may impose a fine not exceeding Bds$300.00 or J$5000.00or TT$900.00 or US$150.00 (according to campus). If the candidate fails to attend and does not offer a satisfactory excuse prior to the hearing, the Committee may hear the case in the candidate’s absence. Grading policy -The University Grading System will apply.