Energy Changes: John C. Butler on Energy Offerings at McCombs

Reposted from McCombs Today website. Originally published  on March 16, 2017 here.

Things are changing in the energy sector, and so is energy education at the McCombs School of Business.

John C. Butler is the academic director of the Energy Management and Innovation Center, associate director of the Center for Energy Finance Education and Research, and a clinical associate professor of Finance. He recently discussed new energy initiatives and trends at McCombs.

With all the developments in the energy sector, how is energy education evolving at McCombs? What new energy-related classes are available to students?   

Last spring we created a second valuation course focused on energy called Valuation of Energy Investments. [Clinical Associate Finance Professor] Joe Hahn teaches that. It has a lot of potential, particularly as oil prices start to recover. He’s teaching it to Master of Science in Finance students. It’s a great course and involves people from around campus and Austin.

We’re re-offering a class in the law school called Law, Finance, and Science of Global Energy Transactions. We typically have five MBAs, five to 10 law students, and five to 10 geology students. For the spring semester, student teams bid on a petroleum investment in Kurdistan. We expect them to be at least be partially responsible for everything — there’s this interdisciplinary nature inherent in all energy projects.

There’s also a class in the law school called Energy Development and Policy. In the fall, they’re trying to figure out a hypothetical: If the city of Austin was to stop buying coal-fired power and move towards a greener source, what would be the best way to do that? Our MBAs work with students in law, public affairs, and engineering to tease out which option is best. Then, they present to a hypothetical investor group composed of local business people.

How are new energy classes conceived?

Classes are an iterative process largely driven by industry and then faculty who shape them as the students react. For example, we’ve added solar projects in class because solar is becoming cheaper and cheaper over the last four years. It’s much more viable now.

What energy-related programs are in the works?

We’re doing a demand assessment for a new one-year master’s degree in energy.

The prompt was looking for a way to quickly provide a commercial energy education to students from diverse backgrounds and little if any work experience. MBAs are typically students with work experience, and the Energy and Earth Resources grad program in the Jackson School of Geosciences is focused on research and work experience. This would be the only one-year degree in energy. Industry people like the idea and so do students who are looking for exposure to McCombs and UT.

How is McCombs addressing energy sustainability?

We’re launching a sustainability initiative. We originally had a center under [former] Dean Tom Gilligan that spanned everything in energy. And while everyone, from an intellectual perspective, thinks interdisciplinary means it has to be broad, you can dilute the message with external people.

So the faculty will work behind the scenes to tie everything together, because you can’t think about sustainability without energy, but you can provide a clear message to students and external constituents by having this sustainability initiative. It’s going to be largely led by [Associate Dean for Graduate Programs] Steve Limberg and [Associate Dean for Research] Laura Starks, and a managing director we’ve hired named Meeta Kothare, who teaches Financial innovation for Social Impact at the LBJ School.

Students are increasingly interested in sustainability. Why is that?

It’s something that appeals to younger people and appears to appeal more to women. That’s the evidence I’m seeing. As we try to increase the number of women in the MBA program, this center draws women in.

None us can ignore what’s going on in sustainability. Traditionally we think about firms maximizing shareholder value. There are some people who say we need to change this system that underlies capitalism. I think that if shareholders start to value other things than pure profit or return, companies will have to adapt.

There’s almost a natural way this happens. “What do you care about? OK, that’s what we’ll manage. It could be sustainability, using things more efficiently, or more effectively.”

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