The objective of the course is to ensure students learn the techniques used in geo-resource project evaluation, discounted cash flow, interest rate, tax consideration and uncertainty and risks in engineering project evaluation. Some introductory knowledge about mineral reserve estimation, risk management and geostatistics, and mine feasibility will be covered.
Farid Tayari, Department of Energy and Mineral Engineering, The Pennsylvania State University.
E-mail: Please use Canvas for all e-mail communications. I will read and respond to Canvas e-mail and discussion forum posts at least once per day during the work week (Mon - Fri), and during most weekends.
Virtual Office Hours: With appointment
Note: This semester all the meetings and office hours will be virtual and through Zoom. Please send me an email that I get back to you with the exact time and the Zoom link.
Farid Tayari, Assistant Teaching Professor of Energy Business and Finance, Department of Energy and Mineral Engineering, The Pennsylvania State University
Welcome to EME 460:
Geo-resources Evaluation and Investment Analysis! This course is primarily about energy and mineral project evaluation and investment decisions. Your experience within this course will be challenging and productive, which can be very helpful to prepare for a future career in the natural resource and business industries. I strongly encourage you to carefully read the course syllabus, where you find details regarding the course objectives, materials, quizzes, grading policy, schedule, and a short description of me, your lecturer.
Who would not want to be able to assess the value of natural resources, after all! The International Energy Agency released a new report stating that the US is becoming the largest natural gas and oil producer. The increasing production of oil and gas in North America is due to the recent shale gas/oil boom. The US has become energy self-sufficient in the recent years. Then there will be increased incentive to develop accurate and reliable tools to evaluate geo-resources.
Please watch the following videos:
Click for a transcript of "IEA's World Energy Outlook 2018" video.
[ON SCREEN TEXT]: There's no single pathway for how the world will use energy in the coming decades.
Based on the trends and policies that we see today, global energy is set to grow by more than a quarter to 2040 with all growth coming from developing economies, led by India.
Low-carbon technologies and natural gas meet more than 80% of this increase in demand and electricity grows twice as fast as overall energy demand.
But on this pathway, global carbon emissions keep on rising and the world falls short of goals to achieve universal energy access and improve air quality.
The IEA's Sustainable Development Scenario provides a strategy to achieve these goals with more low-carbon power sources, renewables providing the main pathway to universal energy access and an even greater focus on energy efficiency.
Reaching climate goals means wind and solar generation growing further and faster with the share of renewables in the power mix rising to two thirds by 2040 up from a quarter today.
It means almost 1 billion electric cars on the road by 2040, compared to 4 million today.
And requires new technologies such as carbon capture, utilization and storage to enter the scene at scale.
There are multiple energy futures open to us.
Actions by governments will be decisive in determining the path we follow.
Find out more: iea.org/weo2018.
Click here for transcript of The Annual Energy Outlook 2019.
The United States has been a net energy importer since 1953, but continued growth in petroleum and natural gas exports results in the United States becoming a net energy exporter by the early 2020s in the Annual Energy Outlook 2019 Reference case. Here’s our Key Takeaways for the Annual Energy Outlook 2019! The percentage of dry gas production from oil formations increased from 8% in 2013 to 17% in 2018 and remains at about this percentage through 2050 in the Reference case. Net exports of natural gas from the United States continue to grow in the Reference case as liquefied natural gas becomes an increasingly significant export. After liquefied natural gas export facilities currently under construction are completed in 2022, U.S. liquefied natural gas export capacity is projected to increase further as Asian demand growth helps U.S. natural gas to remain competitive there. The continuing decline in natural gas prices and increasing penetration of renewable generation have resulted in lower wholesale electricity prices. The changing generation fuel mix in the electric power sector since the mid-2000s has lowered the overall carbon intensity of the electric power sector. Declining costs and improved performance make wind and solar energy increasingly competitive. Solar investment tax credits phase down after 2024, but solar generation growth continues because costs for solar continue to fall faster than for other sources. The United States continues to be a net exporter of coal (including coal coke) through 2050, but coal exports are not expected to increase because of competition from other global suppliers closer to major markets. Nuclear generation is expected to decline in the midterm in the Reference case, from a 19% share of total generation in 2018 to 12% by 2050. Energy intensity is the amount of energy consumed per unit of potential demand. The steepest decline in energy intensity is in the transportation sector. EIA projects that the amount of energy used per highway vehicle mile traveled will decline by 32% from 2018 to 2050. For more information about EIA’s modeled projections of domestic energy markets through 2050, check out the Annual Energy Outlook 2019!
With these videos, you will have a quick glimpse at the natural resource industry: supply and demand, how big is the natural resource industry, import/export issues related to natural resources, cost of extraction, the importance of technology innovation (fracking), policy and regulation, prices, environmental impact, society dependence on natural resources, etc. Renewable energy is playing a more significant role in the world energy outlook every year. Tools of evaluation that will be covered include compound interest calculation, rate of return analysis, escalated and constant dollars, uncertainty/risk analysis and tax issues. All these aspects enter into geo-resource evaluation and investment decision making, so welcome on board and enjoy the journey we will be taking together.
Another topic I am particularly interested in is the uncertainty embedded in geo-resource projects and the new evaluation method such as real option approach. We will cover this advanced evaluation technique in the second half of the course.
The study of resource evaluation and investment decision making is part art and part science. As such, you will see that the learning comes with reading the textbook and completing the different class activities. You will learn the most from each other and most probably will end up working together in the industry after you graduate. So, take advantage of this opportunity to build long-lasting professional relationships!