Module 1 - Fundamentals

Topics in Module 1 Include:

Module 1.1 – New Market Realities: Hydrocarbon Markets in a Decarbonizing World

Presenter: Rusty Braziel

As we come out of a crisis where energy demand was slapped down by COVID-19, the markets are lurching into an entirely different kind of crisis, as the push toward decarbonization has crashed headlong into hydrocarbon supply-and-demand realities. Net-zero emissions and renewables may be the end goal, but it’s still going to take a lot of hydrocarbons to power the global economy before we get there. If hydrocarbon supply is cut back before there's enough renewables to make up the difference, the results can be very messy market conditions, translating into higher prices for all energy supplies. But there’s a lot more going on beyond the headlines as demand responds to COVID recovery while supply continues to be held off the market. In the U.S., increased exports have tied the domestic market oil, gas, and NGL markets more closely than ever to the rest of the world. But satiating a growing global appetite requires additional investment and infrastructure, complicated by the challenges coined by Rusty, “The Midstream Conundrum”.

Module 1.2 – Are Renewables Ready for Center Stage?

Presenter: David Braziel

The U.S. has enjoyed an era of hydrocarbon surplus for the past decade but, these days, initiatives like renewable energy, hydrogen, carbon capture, renewable diesel, and others have been cast into the limelight recently by investors and politicians. This isn't the first time that environmental initiatives have been at the forefront of the national conversation but, in previous cycles when we focused on the environment and energy alternatives, it has been at times of energy insecurity. When price stability returned, the fervor was lost. That changed with the signing of the Paris Climate Agreement in 2016, which reinvigorated the conversation about ESG issues at a time when domestic oil and gas was relatively cheap. Now, with global commodity prices rising, the question becomes: Are renewables ready for center stage or will traditional producers be called upon for affordable energy?

Module 1.3 – The Fundamentals of Fundamentals

Presenter: Rusty Braziel

The School of Energy doesn’t just provide a look at current market conditions and how this might play out over months or years, it's a course about energy market fundamentals. What makes prices move? What happens in response to price movements? It’s price that determines what assets get built, what trades get done, and who makes money. We’ll be looking at the fundamentals of oil, gas and natural gas liquids prices, how they differ, and the links between them that make the markets work.

Module 1.4 – North American NGL Fundamentals

Presenter: Rusty Braziel

NGLs can be mind-numbingly complex and blindingly simple. It’s been said that they are affected by everything, but they affect nothing. That was the case for a very long time, but the Shale Revolution changed that. Now, NGLs are still a major factor in the drill-bit hydrocarbon complex. In this module we go into the fundamentals of NGLs, including the processes, flows and prices that make the NGL markets tick.

Module 1.5 – Understanding Energy Fundamentals Models

Presenter: David Braziel

What makes RBN’s School of Energy unique is that attendees are taken beyond the conceptual level down into the nitty-gritty of modeling. Rather than trying to keep our methods secret, we teach you how to use our models with hands-on instruction and explain how we use them for market analysis. This section serves as an introduction to the models that are interwoven throughout the course, plus the special bonus materials. Our goal is to show how models are useful and help you connect the dots to specific business problems.

Module 1.5b – Propane to Crude

Presenter: David Braziel

One metric that we keep our thumb on at RBN is propane’s relationship to crude. Propane traders tend to focus a lot on the relative price of propane; that is, propane as a percentage of crude oil, rather than just the outright price. That's because the cheaper propane is relative to crude oil, the more propane gets absorbed by the petrochemical industry, both here and in markets for U.S. propane exports. In this introductory model, we introduce the propane-to-crude ratio and discuss how RBN lays out our model spreadsheets, as well as some Excel shortcuts.