Incoming President’s Message

Peter R. Hartley

 

As incoming President of the USAEE for 2012, I am looking forward to an exciting year for energy economics as a profession and another year of success for our Association. Thanks to the exemplary efforts of immediate past President Charles Rossmann together with his nominating committee, I have an extraordinary Council to work with in 2012. Nevertheless, we will have to work hard to deliver better results than 2011 under the extremely able leadership of President Ben Schlesinger and the 2011 Council.

 

Excitement about new developments in the energy industry should continue to help promote interest in the Association. Technological improvements allowing the commercial exploitation of natural gas and oil from low permeability shale have transformed the North American energy industry in a very short period of time. Along with other unconventional sources such as coal bed methane and the Canadian oil sands, these resources have dramatically changed forecasts of future industry evolution.

Information technology has played no small part in enabling the production of unconventional and deepwater resources. It also is playing a critical role in enabling smarter meters and a smarter electricity grid and the more efficient use of energy in all sectors. Far-reaching institutional changes, such as the development of wholesale electricity markets, also would have been impossible without the IT revolution.

The revolution in materials science associated with nanotechnology also has already affected the energy industry and will continue to do so. From improvements in proppants to potential breakthroughs in batteries, solar cells or electricity transmission lines as a result of the development of new materials, the possibilities are enormous. Improvements in genetic engineering and the understanding of biochemistry could also revolutionize areas such as biofuels production.

Changing geographical locations of energy production and consumption also continue to have dramatic effects. Reduced demand for LNG imports into North America came at a fortuitous time to accommodate increased demand for imports into Japan following the Fukushima disaster. Increased European imports of LNG are also altering perceptions of the longstanding dependence on natural gas supplies from Russia. At the same time, the increasing concentration of oil reserves in nations dominated by national oil companies continues to raise geopolitical and economic issues.

The relationship between energy demand and economic growth, and energy prices and business cycles also continue to attract interest. Links between energy commodity markets and financial markets have also been a focus of attention in recent IAEE/USAEE conferences.

Here in the US, the industry has also been concerned about coping with the looming retirement of many experienced professionals. Issues of training and skill development, and internal and international migration of skilled workers, in the energy industry are of potential interest to labor economists.

A number of energy market regulatory issues in the US have also created much discussion in the popular press. These include the response to the Deepwater Horizon explosion and regulation of off-shore exploration and production, the decision to delay approval of the XL oil pipeline, concern about the environmental impacts of shale gas extraction, increased controls on emissions from coal-fired power stations, and more aggressive renewable portfolio standards for power generation.

Energy market issues thus are providing a fertile ground for the application of a very wide range of economic models and empirical techniques. Students appear to be responding to the opportunities. Courses in energy economics are drawing many students, while the number of PhD dissertations in energy economics also appears to be growing.

It is important for the USAEE to capitalize on these trends and maintain or increase its relevance for students, researchers, industry professionals and policy makers. A major strength of our Association is that it provides a unique forum for these groups to interact. Practitioners obtain access to the latest research results and techniques while researchers obtain extremely valuable information about the issues that are most worth examining.

I am pleased to report that your Association appears to be responding to the challenge. Membership in the USAEE currently stands at 983 compared to 860 this time last year. This is a more than 14% growth in one year.  I congratulate the membership committee, and especially Mike Canes.

The 2011 North American annual conference held in Washington DC was also a great success thanks in no small part to the NCAC, General Conference Chair, Ben Schlesinger, Conference Program Chair, Adam Sieminski, Plenary Session Coordinator, Lori Smith Schell, Concurrent Session Chair, Wumi Iledare, Student Poster Session Competition Coordinator, John Holding, Sponsorship Committee Chair, Troy Thompson and remaining members of the Program Committee. We thank you very much for all your hard work.

We also thank Dave Williams and AMS for once again doing an outstanding job of planning, organizing and staffing the conference while controlling costs. At the same time, Dave received special thanks from the hotel for outstanding performance in helping them make our conference as successful as possible.

The Washington Conference examined a very large number of issues affecting the energy industry, including many that I mentioned above. Personally, I particularly valued the insights presented into the Washington policy-making process in several of the plenary sessions. Peter Kobos, from Sandia National Laboratories, and Braeton Smith, a graduate student at Oregon State University interning at Sandia, have written a terrific summary of the plenary sessions and many of the concurrent sessions. Their piece is printed elsewhere in this Dialogue and I urge you all to read it. I also remind you that copies of presentations delivered at the conference are available at http://www.usaee.org/usaee2011/program.aspx

I also congratulate the people who received various awards at the Washington DC Conference. Alisha R. Fernandez (Pennsylvania State University) won the Dennis J. O’Brien Best Student Paper Award Competition for her paper, “Evaluating Ecosystem and Wind-following Services for Hydroelectric Dams in PJM.”

Other students who received USAEE Paper Awards, with a stipend of either $750 or $500 and complimentary conference registration, were Chi Kong Chyong and Erkan Erdogdu (both from the University of Cambridge), Johannes Mauritzen (Norwegian School of Economics), Mostafa Sahraei-Ardakani and Chen-Hao Tsai (both from Pennsylvania State University), and Jan Schachtele (EBS Universitate).

The winner of the first poster presentation cash prize awarded by USAEE was Lucy Y. Qiu (Stanford University) for her work entitled, “Energy Demand of U.S. Commercial Buildings: An Econometric Approach.”

Mina M. Dioun (Lower Colorado River Authority), Kenneth B. Medlock III (Rice University) and Peter K. Nance (Teknecon Energy Risk Advisors LLC) were given the USAEE Senior Fellow Award. William W. Hogan (Harvard University) received the Adelman-Frankel award for his extraordinary and lasting contributions to the field of energy economics.

Under the leadership of President Ben Schlesinger the Association trialed a new mini-conference format in 2011. The first such event was held on Monday, October 24 at the San Francisco City Club.  Another similar event will be held early in 2012, although the exact date and speaker are unknown as yet. Please be looking for emails on this topic.

Members should also be on the look out for details on the next webinar the Association will hold in conjunction with NABE.

Members should also expect to receive a Salary Survey to be sent early next year and we would be most appreciative if you could complete it in an accurate and timely manner.

Finally, I want to urge members to mark their calendars for the 31st UASEE/IAEE North American Conference, which will be held in Austin, Texas from November 4–7, 2012. The planning committee is working on an exciting program covering the many traditional and renewable energy resources abundant in Texas together with other issues of national and international interest that are especially relevant for the Austin location. These include analysis of the features and performance of ERCOT electricity market, measures to promote energy efficiency, and the many innovations in science and technology relevant for the energy industry that are being pioneered in the state’s universities and private sector energy research centers. Please go to http://www.usaee.org/USAEE2012/ for more information, and don’t forget to submit your abstracts early.

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