Archive for Jonathan Chanis

Energy & Environment Natural Gas Drill Site Field Trip

On April 27 and 28, 2014, a group of SIPA students, led by Dr. Jonathan Chanis, traveled to Pennsylvania and West Virginia to meet with natural gas industry executives and visit a natural gas drill site.   The purpose of the trip was to talk with company officials about natural gas developments in the Marcellus and observe how this development affects the local community and the environment.  The students spent most of the visit with company officials and they were able to ask numerous questions.  The time at the drill site further aided the group’s understanding of natural gas development by allowing everyone to see firsthand the scale and scope of a drilling operation. While at the drill site, the students had the opportunity to talk with the drilling engineer and other workers.

Among the issues discussed in detail during the trip were:

  • The steps necessary to drill a well and produce natural gas in the Marcellus;
  • Average well costs and capital budgeting practices;
  • The impact of “Act 13” being overturned by the Pennsylvania Supreme Court;
  • Lease acquisition practices, especially the complexity of dealing with landowners whose mineral rights have been “severed” by a previous landowner;
  • Drilling location siting practices; The gains in drilling efficiency (and the major decline in surface area footprints);
  • The use and importance of drill casing; issues of methane migration; the importance of base line water testing;
  • Hydraulic fracturing technology and the composition of fracking fluids; industry fracking fluid composition disclosure practices;
  • Water usage and waste disposal; water recycling and “closed-loop systems”;
  • Job creation and work forced management issues; workforce safety issues;
  • Community attitudes toward drilling and natural gas production; industry – community relations; the impact of natural gas development on the local agricultural economy;

One of the clearest impressions many students formed concerned the significant impact natural gas development has on the daily life of the community.  Each student was able to see for him/herself the significant and continual truck traffic and evaluate how disruptive this movement is to daily community life.  Company officials openly discussed this issue and they reviewed how they attempt to minimize disruptions and work with local government and civic leaders to maximize benefits for all community residents, not just for those who have development leases.

drill

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“This visit was a unique experience and it definitely added great value to our course of study at SIPA. As energy professionals, it is important to understand the magnitude of the positive and negative impacts natural gas drilling and production have on host communities.  We can read about this, but sometimes a field trip says more than a thousand words. I was particularly impressed by the openness of company representatives who responded frankly to the multiple questions posed by the group. However, while the company does seem to be making great efforts to minimize disruptions to the local community, one of the main problems I observed was that the state and local government is not conducting health or environmental impact assessments.   In a future visit, it would be interesting to talk to civil society representatives to gain multiple perspectives on the impact shale gas development on the region.”

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“The most significant aspect of the trip was being able to see the scale of the operations in person. It is one thing to participate with the abstract idea of fracking by studying it in the classroom, but seeing how the operations are carried out day to day, in the rolling hills of West Virginia, provides an entirely different context and understanding of the issue.”

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In the future, the Energy and Environment Concentration will encourage more such field trips, especially if it includes visits with community leaders and local government officials.

Post contributed by Professor Jonathan Chanis.  Besides sharing his knowledge and insight at SIPA, Professor Chanis has worked in finance for 25 years — most of this time has been spent trading and investing in the emerging markets and various commodities markets, especially petroleum.  Currently he is Managing Member of New Tide Asset Management, a proprietary vehicle focused on global and resource investing.

Why Study Energy at SIPA?

If you ever wonder when renewables will play a larger role in America’s energy mix? How does fracking impact our social ecological and financial systems? Will the U.S. export Liquefied Natural Gas (LNG) or curtail its oil consumption in the coming years? If you are interested in answering these questions and pursuing a career in the energy industry, then SIPA is the right place for you.

SIPA’s Energy and Environment concentration is shaping up to be one of the most comprehensive energy programs in the country. The concentration is designed to give students a nuanced understanding of global and domestic energy policies and provides a rigorous training on energy fundamentals and global energy markets. Students admitted into the program are required to take a combination of policy and finance classes that provide the necessary training to solve complex energy issues. From professor Travis Bradford’s Energy System Fundamentals course, to Jonathan Chanis’ Geopolitics of Oil and Natural Gas, energy classes at SIPA prepare students for real world challenges. In these classes you learn about the important role finance and economics play in shaping our energy landscape and how policy influences our decision making as consumers. The program’s leadership clearly understands that students need to walk away with a tangible skill set and require that energy concentrators take other classes such as Corporate Finance, The Economics of Energy, Energy Modeling, U.S. Energy Policy, all of which are classes that build on the foundational principles of the energy sector.

As a complement to classroom learning, SIPA recently launched the Center on Global Energy Policy. This center serves a platform for students to exchange ideas with some of the industry’s leading experts. Jason Bordoff, the center’s current director and former Senior Advisor to President Barack Obama, has managed to bring high caliber speakers such as Ernest Moniz, U.S. Secretary of Energy; Ryan Lance, CEO of Conoco Phillips; Mayor Michael Bloomberg, among others. Other prominent speakers such as Carlos Pascual, Special Envoy and Coordinator for International Energy Affairs, U.S. State Department and Irik Wærness, Chief Economist, Statoil are slated to address SIPA’s student body in the coming months.

But the effort to create the nation’s top energy program is not just being led by the SIPA administration. Students also play a critical role in enriching the Energy and Environment program. The student run organization, SEA does an outstanding job at organizing weekly roundtable discussions with industry experts. The hour-long interactions offer students the opportunity to directly engage and network with energy practitioners and better understand how classroom concepts apply to the real world, which adds tremendous value to the student experience.

As the world continues to struggle with global energy issues, many elements tied to the energy sector will remain unclear to us, from policy uncertainties, to technological advancements, to developing responsible business practices. In midst of all this ambiguity, one thing is clear to me, and that is SIPA’s commitment to training tomorrow’s energy leaders and attracting the world’s most talented minds.  The amount of resources and human energy invested in this program will make SIPA the premiere school to study energy issues in the coming years. The question the administration will have to answer, is can SIPA train enough students before major industry decisions are made in the next 10 to 15 years?

"The most global public policy school, where an international community of students and faculty address world challenges."

—Merit E. Janow, Dean, SIPA, Professor of Practice, International and Economic Law and International Affairs

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