The Energy Business and Geopolitics

Course Number 1144

Associate Professor Noel Maurer
Fall, 20 Sessions
Paper

Career Focus

The course will benefit students who intend to participate, as managers, capital providers, or consultants, in companies involved in supplying energy services to households, firms, and other customers. It will also benefit students who may work for firms in energy-intensive or energy-related industries, including transportation companies, vehicle manufacturers, and suppliers to producers of oil, gas, and electricity. More broadly, students interested in questions of international political economy and in the economics of strategic competition will benefit from the course.

Educational Objectives

Without the heat, light, and mobility provided by suppliers of energy, firms, governments, and individuals could not function. Energy prices are often highly volatile, and energy firms are subject to pervasive government intervention, especially when the energy value chain crosses international borders. In the course, we try to understand the (interrelated) reasons for price volatility and government intervention, and the strategic implications of each.

The course applies ideas on industry structure, competitive positioning, competitive dynamics, and corporate strategy from the basic Strategy course. It applies ideas from BGIE on the rationales for government intervention, the political factors that influence government policymakers, and how firms deal with the political risk inherent to the energy business.

Students will leave the course with a broad exposure to the kinds of strategic and risk management problems that confront firms in the energy industries, a set of analytic approaches to make sense of those problems, and an enhanced ability to devise and implement strategies that take economic and political considerations into account.

Course Content and Organization

The course consists of three short modules, listed below with representative cases:

• Energy value chains and the distribution of economic surplus: The Chad-Cameroon Pipeline; AES in China
• Innovations in energy: Ethanol; oil sands; wind power
• Synthesis and conclusions: E.ON; private equity in the energy industry