Bill Megginson (Price Chair in Finance, George Lynn Cross Research Professor, University of Oklahoma) visited EPRG and the Economics & Policy Group at the Judge Business School on 16 September 2021 and gave a talk on “Energy Finance”
You can watch a video of the talk here
The slides are available from here
Abstract
Defined as a single industrial sector, the global production, distribution and consumption of energy is the world’s largest in terms of annual capital investment (US$1.83 trillion in 2019) and the second largest nonfinancial industry in terms of sales revenue ($4.51 trillion). Over 100 million barrels of oil are produced and consumed each day—with 70% being traded across borders–and each of the world’s 7.5 billion citizens consumes an average of 3,181 kilowatt-hours/year, though per-capita energy consumption varies enormously and is much higher in rich rather than in poor countries. We describe the financial economics of the global energy industry, focusing on both the physical aspects of production and distribution–how, where, and with what type of fuel energy is produced and consumed–and the capital investment required to support each energy segment. The global energy “industry” can be broadly categorized into two main segments: provision of fuels for transportation and production and distribution of electricity for residential and industrial consumption. The fuels sector encompasses the production, processing, and distribution of crude oil and its refined products, mostly gasoline, kerosene (which becomes jet fuel), diesel, gas oil and residual fuel oil The electric power sector includes four related businesses: generation, transmission, distribution, and supply. After an initial industry overview, we describe the overarching importance of addressing climate change through energy policy and investment and discuss how the industry is being transformed by technology, environmental concerns, and recovery from the coronavirus pandemic. We also describe the role of state-owned entities in energy production and distribution worldwide. A brief survey of extant academic research accompanies the descriptive presentation of each topical area.
Bill’s papers are available here: http://ssrn.com/author=145311
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