Energy Trading and Risk Management: A Practical Approach to Hedging, Trading and Portfolio Diversification

Preface

The Preface presents a preview of what the reader will find if he or she keeps turning the pages of this book. More specifically, I discuss why the book was written and some of the current hot topics in the energy markets. I also give an overview of how this book is organized.

0.1 BACKGROUND

I grew up in New Orleans, which is in a state with a fairly sizable energy industry. Although Louisiana’s energy industry suffered because of Hurricane Katrina and the BP oil spill, it is still thriving. For example, the existence of oil shale in the Gulf of Mexico and advances in fracking technology have opened new possibilities for Louisiana’s energy industry. Hopefully this book will be useful to energy market participants in my home state as they still attempt to recover from the devastation of Hurricane Katrina and the BP oil spill (EIA 2012; Good 2011).

For a substantial part of my academic studies and professional life, I have been involved in energy-related work.

• The mathematics and computer models developed in my Harvard doctoral thesis are utilized to study the transient stability analysis of electrical power systems (Mack 1986).
• I conducted some of my Harvard doctoral thesis research at Sandia National Laboratories. Lockheed Martin manages Sandia for the U.S. Department of Energy’s National Nuclear Security Administration.
• My London Business School MBA thesis included ...