The List - Energy Reading 2021
How were you introduced to the electricity industry? It can be a difficult industry to wrap your arms around. It can be hard to explain to your friends and family:
Me: You can picture a barrel of oil, right?
Mom: (Nods in Agreement)
Me: Ok, now picture a bunch of electrons being pumped on to the grid by generators and flowing through transmission wires where they are measured at all key points on the system so you know exactly who produced what and who consumed what.
Mom: (Blank Stare)
Me: Ok, and when there is too much supply on the grid, the price can actually go negative. Yes, negative!!! You have to pay to produce energy and you get paid to consume it.
Mom: (Blank Stare). What do you mean … what are negative prices?
Me: Maybe we should head out to dinner now.
The mix of technical details, regulatory complexity, market design nuance, and a rapidly changing state of the industry can make it hard to explain to people. The cocktail party description of what I do has always been a challenge for me. The industry is difficult to explain to newcomers. Energy GPS has a number of interns and new employees starting in the next month. We have to teach these people about the industry. To that end, I put forth the following question on Linked In, and thankfully, received a ton of great recommendations:
“Ok folks. We have some summer interns starting in a month. I'm trying to develop a list of books to recommend to them to supplement their work with us this summer. Any recommendations?”
This blog lists the recommendations that came my way. I’ve grouped them by category in the pages that follow. Where possible, I’ve grabbed a blurb about the book or the author to make it easier to find something you might like.
Before diving into the list, I’ll start by highlighting a few of my favorites. That’s not to say that these favorites are better than others on the list, it’s just that I have read them, and I think they either capture a topic really well or have informed my thinking. There are two authors that stand out in my mind: Vaclav Smil and Daniel Yergin. The have each written a lot of books over a long period of time. Their books are well-written, insightful, and based on sound data and analysis. You can look up either of these authors, find the book that looks the most interesting to you, and read it! I started reading Yergin in the early 1990’s; his writing is largely responsible for my decision to pursue a career in energy. I started reading Vaclav Smil in the last ten years. Picking my favorite Vaclav Smil book is like picking my favorite Rolling Stones song – they are all so good. Of note to me is Energy Transitions (2016). He documents, quantifies, and explains the challenges and opportunities of shifting from one energy form to another over a long period of time (wood to coal, coal to oil, oil to natural gas, renewables supplementing fossil). A little known but excellent book is called Lucky and Good by John Sherriff (2013). I wrote a blog about this book several years ago which premium subscribers can find here (https://www.energygps.com/Newsletter/b/Newsletter-Sherriffs-Rules-872857). I knew John from my days at Enron. While this book is not about Enron or its culture, per se, it describes a way of thinking about value, risk, and capital allocation that underlies the success of many of Enron’s best wholesale electricity and gas traders. The book is not directly about commodity trading. It’s a book about applying trader’s thinking to other business decisions. John died from brain cancer shortly after self-publishing this book. More people should know about it.
I’ve organized the following books by category. There are also some references to blogs and other publications. I appreciate the input from 50+ people on Linked In who responded to my query. Happy reading!
Energy for Future Presidents: The Science Behind the Headlines by Richard Muller (2012)
The near-meltdown of Fukushima, the upheavals in the Middle East, the BP oil rig explosion, and the looming reality of global warming have reminded the president and all U.S. citizens that nothing has more impact on our lives than the supply of and demand for energy. Its procurement dominates our economy and foreign policy more than any other factor. But the “energy question” is more confusing, contentious, and complicated than ever before. We need to know if nuclear power will ever really be safe. We need to know if solar and wind power will ever really be viable. And we desperately need to know if the natural gas deposits in Pennsylvania are a windfall of historic proportions or a false hope that will create more problems than solutions. Richard A. Muller provides all the answers in this must-read guide to our energy priorities now and in the coming years.
Networks of Power: Electrification in Western Society 1880 to 1930 by Thomas Hughes (1993)
Awarded the Dexter Prize by the Society for the History of Technology. A unique comparative history of the evolution of modern electric power systems, Networks of Power not only provides an accurate representation of large-scale technological change but also demonstrates that technology itself cannot be understood or directed unless placed in a cultural context. For Thomas Highes, both the invention of the simplest devices (like the lightbuld itself) and the execution of the grandest schemes (such as harnessing the water power of the Bavarian Alps) fit into an overaching model of technological devleopment. His narrative is an absorbing account of the creative genius, scientific achievements, engineering capabilities, managerial skills, and entrepreneurial risks behind one of the most commonplace amenities of the modern age.
Understanding Today's Electricity Business by Bob Shively and John Ferrare (2019).
This 245-page detailed overview of the North American electric industry presents a clear-cut look at how the industry operates. Topics covered include the major industry players, regulation, the various deregulated market structures, the physical electric system and how it's operated, market dynamics, how industry players make money and manage risk, and much more. The book is ideal for those new to the industry, as well as veterans who need a "big picture" perspective of the electric business. The book is easy-to-read, contains a number of charts and diagrams to help simplify complex industry concepts, and includes a glossary and list of acronyms.
The Energy Switch: How Companies and Customers are Transforming the Electrical Grid and the Future of Power by Peter Kelly-Detwiler (2021)
The way humans produce, distribute and consume power will be cleaner, cheaper, and infinitely more complex within the next decade. In The Energy Switch, leading energy industry expert Peter Kelly-Detwiler looks at all aspects of the transformation: how we got here, where we are going, and the implications for all of us in our daily lives.
The Last Energy War: The Battle over Utility Deregulation by Harvey Wasserman (2000)
A fast-paced, shoot-from-the-hip "people's history," The Last Energy War is an accessible, entertaining, and infuriating narration of how the electric power business started, how it almost bankrupted the nation, and how it is now soaking the public to pay for its trillion-dollar atomic mistake.
From the electric chair to Chernobyl, from Thomas Edison to Cleveland's "boy mayor" Dennis Kucinich, this fascinating little book shows how the mega-utilities squashed solar power, how a military-utility alliance helped force atomic reactors down the public throat without a vote, and how a score of bought state legislatures have already handed corrupt utilities $200 billion in pure pork through a bogus deregulatory process. Merciless in its Robber Baron critique, The Last Energy War also builds on American heroes such as Franklin Roosevelt and George Norris to offer a blueprint for how we can take back out power supply.Relentlessly optimistic, it is the one book you must read to understand what's really happening to you when you turn on your lights—and then get the bill.
Revolutionary Power by Shalanda Baker (2021)
Revolutionary Power is a playbook for the energy transformation complete with a step-by-step analysis of the key energy policy areas that are ripe for intervention. Baker tells the stories of those who have been left behind in our current system and those who are working to be architects of a more just system. She draws from her experience as an energy-justice advocate, a lawyer, and a queer woman of color to inspire activists working to build our new energy system. In Revolutionary Power, Shalanda Baker arms those made most vulnerable by our current energy system with the tools they need to remake the system in the service of their humanity. She argues that people of color, poor people, and indigenous people must engage in the creation of the new energy system in order to upend the unequal power dynamics of the current system.
The Power Brokers: The Struggle to Shape and Control the Power Industry by Jeremiah Lambert (2015)
For more than a century, the interplay between private, investor-owned electric utilities and government regulators has shaped the electric power industry in the United States. Provision of an essential service to largely dependent consumers invited government oversight and ever more sophisticated market intervention. The industry has sought to manage, co-opt, and profit from government regulation. In The Power Brokers, Jeremiah Lambert maps this complex interaction from the late nineteenth century to the present day.
The Grid: The Fraying Wires Between Americans and Our Energy Future by Gretchen Bakke (2016)
America's electrical grid, an engineering triumph of the twentieth century, is turning out to be a poor fit for the present. It's not just that the grid has grown old and is now in dire need of basic repair. Today, as we invest great hope in new energy sources--solar, wind, and other alternatives--the grid is what stands most firmly in the way of a brighter energy future. If we hope to realize this future, we need to reimagine the grid according to twenty-first-century values. It's a project which forces visionaries to work with bureaucrats, legislators with storm-flattened communities, moneymen with hippies, and the left with the right. And though it might not yet be obvious, this revolution is already well under way.
Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States by Leah Cardamore Stokes (2020)
Examining clean energy laws in Texas, Kansas, Arizona, and Ohio over a thirty-year time frame, Stokes argues that organized combat between advocate and opponent interest groups is central to explaining why states are not on track to address the climate crisis. She tells the political history of our energy institutions, explaining how fossil fuel companies and electric utilities have promoted climate denial and delay. Stokes further explains the limits of policy feedback theory, showing the ways that interest groups drive retrenchment through lobbying, public opinion, political parties and the courts. More than a history of renewable energy policy in modern America, Short Circuiting Policy offers a bold new argument about how the policy process works, and why seeming victories can turn into losses when the opposition has enough resources to roll back laws.
Operational Economics of Electric Utilities by Constantine Bary (1963)
Principles of Public Utility Rates by James Bonbright (1961)
Renewable Energy Finance Theory and Practice - Raikar and Adamson;
Energy and Resource Books
Energy: A Beginner's Guide by Vaclav Smil (2017)
In this engaging introduction, renowned author and scientist Vaclav Smil covers a wide range of topics, from the inner workings of the human body to the race for more efficient and eco-friendly fuels. Shedding light on the science behind global warming and efforts to prevent it, and how our daily decisions affect energy consumption, this book highlights the importance of energy in both past and present societies. Whether you’re after insight or dinner table conversation, Energy: A Beginner’s Guide will amaze and inform, uncovering the science behind one of the most important concepts in our universe.
Energy Transitions: Global and National Perspectives by Vaclav Smil (2016)
Based on the best international and national statistical sources, the second edition of Energy Transitions: Global and National Perspectives supplies an in-depth evaluation of how economies and nations around the world are striving to move away from traditional energy sources, the unfolding decarbonization process, and problems with intermittent energies and national transition plans. It supplies readers with a clear introduction to the basic properties of energy systems and key concepts of their appraisal, puts energy transition patterns in long-term historical perspective, and looks at the energy transition in eight of the world’s leading economies. The last chapters focus on the advances in the decarbonization of the global energy supply and consider how the energy transition will continue in the coming decades.
Energy and Civilization: A History by Vaclav Smil (2017)
Energy is the only universal currency; it is necessary for getting anything done. The conversion of energy on Earth ranges from terra-forming forces of plate tectonics to cumulative erosive effects of raindrops. Life on Earth depends on the photosynthetic conversion of solar energy into plant biomass. Humans have come to rely on many more energy flows—ranging from fossil fuels to photovoltaic generation of electricity—for their civilized existence. In this monumental history, Vaclav Smil provides a comprehensive account of how energy has shaped society, from pre-agricultural foraging societies through today's fossil fuel–driven civilization.
The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin (2020)
The world is being shaken by the collision of energy, climate change, and the clashing power of nations in a time of global crisis. Out of this tumult is emerging a new map of energy and geopolitics. The “shale revolution” in oil and gas has transformed the American economy, ending the “era of shortage” but introducing a turbulent new era. Almost overnight, the United States has become the world's number one energy powerhouse. Yet concern about energy's role in climate change is challenging the global economy and way of life, accelerating a second energy revolution in the search for a low-carbon future. All of this has been made starker and more urgent by the coronavirus pandemic and the economic dark age that it has wrought. A master storyteller and global energy expert, Daniel Yergin takes the reader on an utterly riveting and timely journey across the world's new map. He illuminates the great energy and geopolitical questions in an era of rising political turbulence and points to the profound challenges that lie ahead.
The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin (2012)
The Quest tells the inside stories, tackles the tough questions, and reveals surprising insights about coal, electricity, and natural gas. He explains how climate change became a great issue and leads readers through the rebirth of renewable energies, energy independence, and the return of the electric car. Epic in scope and never more timely, The Quest vividly reveals the decisions, technologies, and individuals that are shaping our future.
The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin (2008)
Winner of the Pulitzer Prize. With his far-reaching insight and in-depth research, Yergin is uniquely positioned to address the present battle over energy which undoubtedly ranks as one of the most vital issues of our time. The canvas of his narrative history is enormous—from the drilling of the first well in Pennsylvania through two great world wars to the Iraqi invasion of Kuwait, Operation Desert Storm, and both the Iraq War and current climate change. The definitive work on the subject of oil, The Prize is a book of extraordinary breadth, riveting excitement, and great value—crucial to our understanding of world politics and the economy today—and tomorrow.
Creating Climate Wealth: Unlocking the Impact Economy by Jigar Shah (2013)
Jigar Shah, internationally recognized for revolutionizing the now multi-billion-dollar solar energy industry, outlines how entrepreneurs and investors can unlock the massive potential that climate change represents. Shah argues that, while new technical innovation is valuable, deployment of existing technologies are the key to reaching our near-term climate targets. Rather than waiting for yet to be developed technology, business model innovation is the key to attract mainstream capital and unlock transformational change.
The Extraction State: A History of Natural Gas in America by Charles Blanchard (2021)
The history of the United States of America is also the history of the energy sector. Natural gas provides the fuel that allows us to heat our homes in winter and cool them in summer with the touch of a button or turn of a dial—when the industry runs smoothly. From the oil crisis of the 1970s to the fall of Enron and the California electricity crisis at the turn of the century to contemporary issues of hydraulic fracking, poorly conceived government policies have sometimes left us shivering, stranded, or with significantly lighter wallets. In this expansive narrative, Charles Blanchard traces the rise of natural gas and the regulatory missteps that nearly ruined the market. Beginning in the 1880s, The Extraction State explains how the New Deal regulatory compact came together in the 1920s, even before the Great Depression, and how it fell apart in the 1970s. From there, the book dissects the policies that affect us today, and explores where we might be headed in the near future.
Cadillac Desert: The American West and Its Disappearing Water by Marc Reisner (1993)
The story of the American West is the story of a relentless quest for a precious resource: water. It is a tale of rivers diverted and dammed, of political corruption and intrigue, of billion-dollar battles over water rights, of ecological and economic disaster. In his landmark book, Cadillac Desert, Marc Reisner writes of the earliest settlers, lured by the promise of paradise, and of the ruthless tactics employed by Los Angeles politicians and business interests to ensure the city's growth. He documents the bitter rivalry between two government giants, the Bureau of Reclamation and the U.S. Army Corps of Engineers, in the competition to transform the West. Based on more than a decade of research, Cadillac Desert is a stunning expose and a dramatic, intriguing history of the creation of an Eden--an Eden that may only be a mirage.
Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally (2019)
As OPEC has loosened its grip over the past ten years, the oil market has been rocked by wild price swings, the likes of which haven't been seen for eight decades. Crafting an engrossing journey from the gushing Pennsylvania oil fields of the 1860s to today's fraught and fractious Middle East, Crude Volatility explains how past periods of stability and volatility in oil prices help us understand the new boom-bust era. Oil's notorious volatility has always been considered a scourge afflicting not only the oil industry but also the broader economy and geopolitical landscape; Robert McNally makes sense of how oil became so central to our world and why it is subject to such extreme price fluctuations.
Energy Markets by Vincent Kaminski (2013)
Energy markets represent a network of related physical, financial and credit markets, with very complex interactions and interdependencies. This book enables the reader to come to an understanding of every layer and interaction, learning everything they need to about the realities of working within these markets, in an accessible, straightforward manner. Energy markets are evolving towards a highly integrated, global system, with shocks propagating across specific physical commodities markets and different local markets. The physical and financial markets cannot be examined in isolation from each other and this book brings the two together, providing detailed and comprehensive coverage of these continually evolving areas.
The Domino Effect by Russel Braziel (2016)
The shale revolution triggered The Domino Effect, a cascading series of events that has profoundly transformed energy markets, reshaped major related industries and remodeled the global economic and geopolitical landscape. This book presents a unique, integrated perspective on natural gas, crude oil and natural gas liquids that is vital to understanding energy prices, product flows, infrastructure, equity values and the global energy economy. Innovative analysis provides energy producers, marketers, end users, financiers, and investors with a framework for understanding the tectonic shift in global supply and demand that will continue to drive energy markets for decades to come. The Domino Effect also delivers high-level insights into exploiting the extraordinary investment, trade and career opportunities that will continue to be opened by the shale revolution.
Lucky and Good by John Sherriff (2013)
Trading, poker, investing, gambling, starting a business, baseball, betting on lawsuits, innovation, and one insider’s story about the rise and fall of Enron. In "Lucky and Good," John Sherriff, former Enron Europe CEO, shares his insights about what went right and wrong at Enron, his current business of betting on lawsuits as well as tales from the poker table and the sporting world to provide very useful and entertaining advice for anyone in business. John Sherriff is the former CEO of Enron Europe, based in London, which was one of the largest commodity-trading organizations in the world. For the last 10 years, his business has been investing in commercial lawsuits with Lake Tahoe Financial, in which he buys
Trading Natural Gas: Cash, Futures, Options and Swaps by Fletcher J. Sturm (1997)
This great "how to" book covers the various mechanics of natural gas trading, including the physical (cash) market for natural gas production, transportation, distribution, and consumption. The heart of the text is the definition and demonstration of financial trading tools and techniques. It closes with discussion of more complex structures of trading and the author's philosophy on how a risk management department should function within a natural gas trading company.
The World For Sale: Money, Power, and the Traders Who Barter the Earth's Resources by Javier Blas and Jack Farchy (2021)
The modern world is built on commodities - from the oil that fuels our cars to the metals that power our smartphones. We rarely stop to consider where they have come from. But we should. In The World for Sale, two leading journalists lift the lid on one of the least scrutinised corners of the world economy: the workings of the billionaire commodity traders who buy, hoard and sell the earth's resources. It is the story of how a handful of swashbuckling businessmen became indispensable cogs in global markets: enabling an enormous expansion in international trade, and connecting resource-rich countries - no matter how corrupt or war-torn - with the world's financial centres. And it is the story of how some traders acquired untold political power, right under the noses of western regulators and politicians - helping Saddam Hussein to sell his oil, fuelling the Libyan rebel army during the Arab Spring, and funnelling cash to Vladimir Putin's Kremlin in spite of western sanctions.
The Art of Thinking Clearly by Rolf Dobelli (2014)
Despite the best of intentions, humans are notoriously bad—that is, irrational—when it comes to making decisions and assessing risks and tradeoffs. Psychologists and neuroscientists refer to these distinctly human foibles, biases, and thinking traps as “cognitive errors.” Cognitive errors are systematic deviances from rationality, from optimized, logical, rational thinking and behavior. We make these errors all the time, in all sorts of situations, for problems big and small: whether to choose the apple or the cupcake; whether to keep retirement funds in the stock market when the Dow tanks, or whether to take the advice of a friend over a stranger.vDrawing on this wide body of research, The Art of Thinking Clearly is an entertaining presentation of these known systematic thinking errors--offering guidance and insight into everything why you shouldn’t accept a free drink to why you SHOULD walk out of a movie you don’t like it to why it’s so hard to predict the future to why shouldn’t watch the news.
Reminiscences of a Stock Operator by Edwin Lefevre (1923)
Reminiscences of a Stock Operator is a fictionalized story based on the trading career of Jesse Livermore. It follows his journey from the age of 15 when he made his first $1,000 to becoming a Wall Street legend. Jesse Livermore or “Boy Plunger”—the famous American investor and security analyst who made his millions from the stock market. Edwin Lefèvre tracks the exploits of Livermore as he won and lost tens of millions of dollars playing the stock and commodities markets during the early 1900s. Despite the book's age, it continues to offer insights into the art of trading and speculation.The book is considered an investment classic.
Option Volatility and Pricing: Advanced Trading Strategies and Technique by Sheldon Natenburg (2014)
The bestselling Option Volatility & Pricing has made Sheldon Natenberg a widely recognized authority in the option industry. At firms around the world, the text is often the first book that new professional traders are given to learn the trading strategies and risk management techniques required for success in option markets.
Outliers: The Story of Success by Malcolm Gladwell (2011)
Malcolm Gladwell takes us on an intellectual journey through the world of "outliers"--the best and the brightest, the most famous and the most successful. He asks the question: what makes high-achievers different? His answer is that we pay too much attention to what successful people are like, and too little attention to where they are from: that is, their culture, their family, their generation, and the idiosyncratic experiences of their upbringing. Along the way he explains the secrets of software billionaires, what it takes to be a great soccer player, why Asians are good at math, and what made the Beatles the greatest rock band. Brilliant and entertaining, Outliers is a landmark work that will simultaneously delight and illuminate.
- Energy [R]evolution, Greenpeace, 2009
- World Energy Outlook, IEA 2009
- NREL: Evolution of Wholesale Electricity Market Design with Increasing Levels of Renewable Generation, E. Ela, M. Milligan, A. Bloom, A. Botterud, A. Townsend, and T. Levin, 2014.
- Modeling Loads and Prices (R. Weron, 2006)
- Solar Wakeup Podcast
- Energy Gang Podcast
- RMI: Energy Basics episodes #126 and #128 (good history of US electricity markets).
- Canary Media Newsletter
- FERC Orders 636 and 888 as well as 745, 841 and 2222