Oil & Gas Journal, in its annual Midyear Forecast special report, which begins on p. 18, is calling for a small increase in the consumption of natural gas in the US this year. The gas market will remain tight, with US production growth marginal.
The share of the energy market that gas holds in the US is nearly 23%, and it looks to grow as more gas-fired power generation enters the mix. How gas supplies and the technologies behind them are managed is critical to ensuring a reliable market.
Building expertise
A new program at the University of Houston aims to support the need for such expertise. The university's Global Energy Management Institute (GEMI), along with its Bauer College of Business and Cullen College of Engineering, has created a certificate program in natural gas management (NGM) to start in autumn of 2005.
Current offerings of GEMI, which was created to address the specific needs of energy industry personnel, include certificates in energy accounting, energy risk management, financial services management, and information technology project management.
"Our graduate certificate programs are designed to provide intensive exposure to topic areas in demand by the current business environment, geared for the working professionals looking to advance their career. The programs can be taken as part of a traditional [masters of business administration] program or as a stand-alone certificate," said Jeff Graefe, director of GEMI.
The Accounting Certificate in Energy (ACE) provides participants with a specialization in the accounting, financial reporting, and financial analysis of energy companies
This certificate track is aimed at accountants both within energy companies and in auditing firms that deal with the energy sector.
Based on past participants, a typical ACE participant has a business degree in finance or accounting, is pursuing a part-time MBA or masters of science degree, works full time at a large energy company, is a little more likely to be male than female, and is about 30 years old. Estimated in-state tuition of $13,500 includes books and materials, and there are typically 20-35 students in program at a time.
Gas program details
The university hopes to build upon the success of the ACE certificate with the new NGM program, which targets those with engineering backgrounds and combines business and engineering courses. The curriculum consists of six courses, which can be completed in 9 months by attending classes 2 nights/ week.
The natural gas program will host industry experts and show students real-world business applications in addition to academic theory. The courses cover energy industry economics, financial engineering and derivatives, natural gas engineering, natural gas conversion technologies, and real options. Additionally, there is a capstone course that serves as an integrating element for the program.
The capstone course ensures that students have an appreciation of the legal and ethical issues in managing energy companies. Also, it covers special topics, such as mark-to-market accounting and industry rankings, and allows for participation in an industry simulation.
The energy industry economics course aims to be a comprehensive introduction to the energy value chain and the foundations of energy pricing and risk. In addition to gas, this course covers oil, power, petrochemicals, production, refining, and transportation.
The natural gas engineering class addresses supply and sustainability, covering unconventional gas resources, LNG, and compressed natural gas (CNG). Additionally, the course evaluates consumption of gas for power generation and as a source of hydrogen for fuel cells.
The course in financial engineering and derivatives gets into pricing and stochastic processes, plus hedging strategies, arbitrage, and other securities. The real-options class is an advanced course on the market valuation of real and financial assets using option-theoretic techniques.
Finally, the natural gas conversion technologies course presents alternatives to pipeline transportation, including LNG and CNG, as well as a series of gas-to-liquids technologies. This class looks at the fundamentals, engineering design, strategies, and economics of each of these technologies.
Considering the volatile state of US natural gas markets that most experts foresee during the coming years, the demand for such expertise is likely to remain as strong as it is for gas.