ENE475 Natural Gas Markets (E)

• Topics

  How was it possible that the EU was so dependent on Russian gas imports that Gazprom could drive up natural gas prices so much as happened in 2022? Why did these high gas prices in Europe push prices up all over the world? How long has the EU been so dependent on Russian imports? Why has it become mandatory for EU member states to fill up gas storage almost completely by November 1 every year. Why can’t Norway supply more gas to Europe? Why have gas prices become more volatile in recent years? Why is the natural gas price so important for electricity prices in continental Europe? Why is the climate footprint of some liquefied natural gas suppliers worse than for coal?

  This course gives students an introduction in natural gas markets. This concerns regional and global natural gas markets, supply, transportation, storage, and usage. We discuss market characteristics and economics, regulatory regimes, and various types of contracts. Additionally, we consider recent trends and the current and future roles of natural gas in the energy system and other uses considering the need for decarbonization of the energy system and a more sustainable society. 

• Learning outcome

  Upon successful completion of the course, the students:

  Knowledge

  • Are familiar with the main elements and aspects of regional and global natural gas markets.
  • Know the role of natural gas in the current energy supply mix and its potential role in the future one.
  • Know the advantages and disadvantages of applications of natural gas in different sectors.
  • Understand why natural gas is not as difficult a commodity as electricity but more difficult than oil and coal.
  • Understand the role that natural gas can have in a more sustainable society that needs to decarbonize.

  Skills

  • Can explain why gas market structure and high capital costs have favored long-term contracts in the past.
  • Can explain why natural gas is more or less useful in various economic sectors, including power generation.
  • Can explain why liquefied natural gas plays an increasingly important role in the global gas market.
  • Can discuss why there are different perspectives on the role of natural gas in a decarbonizing economy.

  General competence

  • Can apply economic reasoning and intuition in the context of energy markets and sustainability.
  • Have developed their analytic skills.
  • Have developed their writing and reporting skills.

• Teaching

  One week long intensive course with lectures and discussions. The professor wishes to engage students in in-class discussions, both in small groups and plenary, as well as via digital tools such as Socrative.

  It will NOT be possible to follow the course digitally.

• Recommended prerequisites

  Introduction to micro economics, basic calculus.

• Credit reduction due to overlap

  None.

• Compulsory Activity

  Mandatory physical attendance. Attendance requirement (>=80%). Any absence to be communicated to the lecturer in advance of the start time of the specific lecture date and time. Warn the lecturer explicitly in advance of the course start about any foreseeable challenge in meeting this requirement that for special reasons should be accommodated by the lecturer.

  For each seminar day there will be a list of questions. You are expected to read the indicated material and prepare for these questions thoroughly. Classes may start with a short multiple-choice test to help students verify that what they got out of the preparation aligns with the professor’s aims. Participants must do the multiple-choice tests individually.

• Assessment

  A written assignment, in groups of up to four people.

  The instructor will provide a one-page case description of a stylized country with a rudimentary description of current energy system, socio-economic development level and outlook, and climate targets for some future years.

  Students will present a vision on how the natural gas market should develop and be regulated to allow the country to develop towards the climate targets.

  The report will be about 20-25 pages, per group.

  Students are expected to submit their deliverable three weeks after the last day of the course.

• Grading Scale

  Pass-Fail.

• Computer tools

  Students opting for the case study (See under Assessment), need sufficient skills in appropriate software to implement mathematical programs. This may be, for instance, GAMS, XPRESS, Python, R, or MATLAB.

• Literature

  The reading material consists mostly of book chapters, journal papers, and information and reports by various organizations available online. Details will be provided before the start of the course.

  Chapters and papers will be available in Leganto, a selection of relevant internet links will be provided at the start of the course.