Blackout in America



-581025-965835 ///Entrepreneurs in Action! Developing theEntrepreneurial SpiritLearning in Action!A Cross-disciplinary Problem-Based Learning Environment for EntrepreneurshipUniversity CasesA Question of Power(Oil Related Case)Test Version 1.0(A Work in Progress)R. Wilburn Clouse, PhDWestern Kentucky University Terry Goodin, EdD Middle Tennessee State University TABLE OF CONTENTS TOC \o "1-9" \t "Heading 9;9;Heading 8;8;Heading 7;7;Heading 6;6;Heading 5;5;Heading 4;4;Heading 3;3;Heading 2;2;Heading 1;1" Introduction3Learning Vignette -- A Question of Power4The Challenge5Core Concepts 6Learning Objectives6Guiding Questions7Resources 7Oil History7Oil Pricing7Oil Policy8Sources and Production of Oil8Government9Environmental Issues 10Print Materials – Research Articles, Books and Papers10Research Papers on Fuel Cells11Business Support Materials12Online Experts 14Online Resources and Video Clips14Implementation14Introducing Cases15Student Activities15Products15Phase One – Doing the Research16Phase Two – Find a Solution16Phase Three – Taking it Public16Assessments16Formative16Summative17References17-571500-457200A Question of Power(Oil Related Case)IntroductionLike all developed nations, the United States is heavily dependant upon oil as a major source of energy. Indeed, it can be said that the U.S. economy “runs on oil.” Oil provides power for transportation and manufacturing systems and raw materials for plastics, building and road-paving industries, to name a few. The United States is a leader in both oil production and consumption, with U.S. companies providing technical knowledge for producing high-grade oil products and the American public leading in the consumption of such products. Without a dependable supply of oil, at reasonable prices, we could face a major economic upheaval in this country. While some argue that there really is no looming oil shortage (Maugeri, 2004), it cannot be argued that oil prices are steadily rising, which is in itself a cause for concern. As demand for oil has increased we have seen crude oil prices rise from a few dollars per barrel to forty dollars and more. Gasoline at the pumps now hovers at about two dollars per gallon (Energy Information Administration, 2004). This phenomenon drags at the economy because it results in the average American family having less disposable income to spend on other goods and services.Many believe that we are on the brink of a global oil crisis brought about by a world-wide increase in demand as developing countries like China and India begin to tap into the global oil supply. The obvious answer seems to be to increase production. However, that decision is no longer ours to make. During the 1930s, 40s and 50s, much of the U.S. oil supply was produced and refined in the United States, especially Texas. Gasoline refined from this oil was sold at the pumps for 20-35 cents per gallon during this time period. During the 1960s and in succeeding decades, the Middle East gradually replaced the U.S. as the primary source of oil supply (Skinner, 1995). It was discovered that oil could be extracted, refined and shipped from the Middle East cheaper than it could be developed from U.S. sources. Now, the United States, like other developed countries, is heavily dependant upon oil from the Middle East. In fact, at present the U.S. imports an average of 56.2% of its total oil from Middle Eastern sources (Energy Information Administration, 2004). This “oil addiction” has resulted in some rather disturbing consequences, including the transfer of some 7 trillion dollars of assets from America to potentially unfriendly states in the Middle East (Economist, 2003). This political reality shows no sign of change in the near-term, as the Middle East maintains a chokehold on supply. For example, between them, Saudi Arabia and Iraq account for some 35% of the world’s known oil reserves. Given the geopolitical uncertainty of this region of the world a stable and reliable supply of oil remains a constant concern. Solutions for this problem run the gamut from demand reduction via discovery and development of alternative fuels to supply increases via drilling in such areas as the Arctic National Wildlife Refuge (Bishop, 2004). Alternatives such as hydrogen fuel cells and electric (battery) powered engines are being explored as options for automobiles (Dunn, 2002; McLean & Lave, 2003). So-called “hybrid” engines are being offered as a transition from gasoline-powered to hydrogen-powered vehicles and still other engine options are being investigated (Ogden, Williams, & Larson, 2004). Finally, there are efforts underway to find ways to produce new fuels from plants and waste products. These fuels would power existing engines with few, if any, modifications (Zhang, Dubé, McLean, & Kates, 2003).Whatever the solution, whether a single new technological breakthrough or a series of innovations and policies that result in a change in the balance of supply and demand forces, it seems clear that America must find a way to solve the problem of oil dependence. Not to do so seems to be fundamentally shortsighted and will leave our nation truly teetering “on the brink.”Learning Vignette -- A Question of PowerJason, a senior football player at Tech University, pulled into the local Exxon Service station and minimarket. His gasoline tank on his SUV was at “empty.” Jason carefully selected the gasoline grade and began to fill his gas tank. The dollar meter flew by rapidly. For the past several months Jason had watched the price of gasoline move up rapidly from just over a dollar a gallon to close to two dollars a gallon. In a history class, Jason had just been reading about the Gulf War of 1992 where Iraq invaded Kuwait and took over and destroyed many of the oil fields. Jason had learned that much of the oil consumed in the United States comes from Middle Eastern countries such as Saudi Arabia, Iraq, Iran and Kuwait.His research and study in this area made him realize that we could be on a path to disaster in this country. In order to drive his SUV, Jason had already found it necessary to make some changes in his spending habits. Since a tank of gas now cost almost fifty dollars, this increase in fuel costs was forcing him to change his economic standards.Jason goes into the minimarket to pay his bill and sees the headlines of the USA Today concerning a terrorist plot uncovered at a oil refinery. Jason had been following the current Iraqi War and began to wonder about his future.Later that day, Jason was sitting around the table with some friends at the student center. They were discussing the world situation which had been the subject of an interdisciplinary project that they were taking this semester. The students had been assigned to teams, the purpose of which was to come up with ideas that could be used to address America’s dependence on oil, specifically on foreign oil suppliers. The conversation had turned to the latest developments in the Middle East. Alex, a political science major, was talking about the balance of power and the problems associated with attempting to establish a democracy in a Muslim world like Iraq. She pulled out the same newspaper article that Jason had seen at the minimart. Heads really began to spin when these students realized the potential impact of oil on their life and on their future. If another country should attempt to take over yet another country with heavy oil resources, this could be devastating to the United States and the world oil industry. Even if terrorists develop a systematic approach to destroying large number of oil refineries this also could have a devastating attack on the world economy.In addition to Alex, the political science major, and Jason, the engineering major, other students at the table included Jared, an economics major, Donna, a business major, and Mary, an education major. All of a sudden, this group of students realized that what they were studying was not history and was not static, but was dynamic and would have a tremendous impact on their future. Jason spoke up and said, “Listen, we’ve got to think of something – some way of reducing our need for oil. Now, let’s put our heads together and make it happen!”The ChallengeEntrepreneurs in Action! cases are written to be open-ended, flexible learning experiences for students. The case provides an introduction and a learning vignette to set the stage for the students. The student groups should carefully read the introduction and the learning vignette. After reading these areas, students should discuss the major issues outlined in the introduction and learning vignette. The students are then faced with the opportunity to develop possible solutions to the problems and opportunities outlined in the case. In some cases, students may find it necessary to seek information from some of the resources listed in the case and are to contact Online Experts early in the opportunity identification. There are no right or wrong answers in these exercises and it is expected that multiple solutions will be developed by different groups. It is also suggested that students not only look at the political, economic and social issues, but to dream about future inventions and/or business opportunities that can derive from the case. The challenge begins with the following questions:What do you think? What solutions would you recommend if you were a member of this student team? What new business ventures can be developed from this case?After raising these questions, the students are free to begin deliberations on possible solutions to the case.Core Concepts Some of the concepts to be covered in this case are as follows:History of the oil businessSources of oil throughout the worldRate of oil consumptionPolitics of oilPrice and allocation of oilOil and world politicsPower and influenceEconomic impactOil and transportationOil and warOther sources of energyLearning ObjectivesStudents will develop an understanding of the early history and development of the oil discovery and development process.Students will be able to identify major sources of oil reserves.Students will compare and contrast the economics of the oil production process.Students will investigate and study the political ramifications of oil and the role it plays in the world.Students will investigate and understand the role of oil as a power negotiator.Students will understand the social, political and economic impact of offshore drilling and of drilling in environmentally sensitive areas.Students will display an understanding of the business planning model, including market research, product or service development, industry analysis, organizational mission and vision, financial, and entrepreneurial thinking.Students will see the need to develop new sources of energy.Guiding QuestionsWhat would be in impact of a reduction in foreign oil supply in the United States?What are the current sources of oil?What factors play a part in the price of oil?Are there alternatives to the use of oil in our economy? What are they, and what are the economic, social and political impacts associated with each?What types of products and services would lower our consumption of oil?What is involved in bringing a new product or service to market?Resources The following resources are provided to help the student develop solutions to the case. The student may also find it necessary to supplement these resources with additional sources. The resources help connect the learning to the latest established research literature.Oil History – Petroleum History InstituteThe Institute was founded in 2003 as a not-for-profit organization 501(c)(3). It is the successor to the Drake Well Foundation which in its past was a successor in 1951 to an earlier operating committee formed by the American Petroleum Institute at the Drake Well Museum. The Institute is dedicated to furthering public awareness of the history of the oil industry through research, documentation, archival activities, presentations and other outreach activities. The Institute publishes an annual journal, Oil-Industry History and reprints old and rare books on the industry. The Institute also holds symposiums on oil history, conducts field trips and prepares guidebooks. – Blake MalkamakiThis index is a link to early petroleum history sites. It is an excellent resource for historical review and impact and covers oil development in several states and foreign countries.Oil Pricing – Bloomberg This site provides regular updates of energy prices, along with instant access to real-time and historical financial data. Bloomberg clients include the world's central banks, investment institutions, commercial banks, government offices and agencies, corporations and news organizations. – WTRG EconomicsThis site presents analysis, planning, forecast and data services for energy producers and consumers. – Conoco Crude Oil price tables are presented.Oil Policy – American Petroleum InstituteThe API was established on March 20, 1919, with the following stated goals:to afford a means of cooperation with the government in all matters of national concern; to foster foreign and domestic trade in American petroleum products; to promote in general the interests of the petroleum industry in all its branches; to promote the mutual improvement of its members and the study of the arts and sciences connected with the oil and natural gas industry.With information about oil and natural gas for the general public, researchers, newspersons and policy-makers, this is a good general starting point for research that can go in multiple directions. – Petroleum History Institute (See description above.) – Center for Strategic andInternational StudiesFor four decades, CSIS has been dedicated to providing world leaders with strategic insights on – and policy solutions to – current and emerging global issues.Sources and Production of Oil –Petroleum & Geosystems Engineering Reading Room at the University of Texas (Austin) College of EngineeringThis is a collection of links and references from a broad range of petroleum-related topics. – Chevron USA All aspects of oil exploration and production are clearly explained at this learning site (excellent information). – Chevron/Texaco OilThe many facets of oil production are explained here.Oil Production in Other Countries – Offshore Management CentreThe Offshore Management Centre is part of the Aberdeen Business School at the Robert Gordon University in Aberdeen, UK. The Centre was established in 1993, to create a knowledge-based resource for managers in the oil and gas industry. – Australian Petroleum Cooperative Research Centre The APCRC is a consortium of industry, government and universities that provides the Australian oil and gas industry with ready access to cost effective problem solving in key sectors of exploration and production.Middle East Oil Production – Arab Petroleum Research CenterThe APRC, founded in 1965, is an independent center for studies and publications on the oil and gas industry covering the Middle East, North Africa, Sub-Saharan Africa and the Caspian Sea region. APRC acts as consultant to Arab oil producing countries and international oil and gas ernment – The Mineral Management ServiceMMS-Gulf of Mexico (Gulf of Mexico)MMS-Alaska (Alaska)Environmental Issues – GreenpeaceThis site contains information about the environmental effect of oil spills, such as that of an oil platform that sank in deep water off the coast of Brazil. – GreenpeaceThis article about drilling in the Arctic lays out the environmental consequences of such actions. – Greenpeace (see above).Print Materials – Research Articles, Books and PapersCampbell, C. J. (2000). The coming oil crisis. Brentwood, England: Multi-sciencePublishing Co. - This source provides the history and current status of the important oil industry and reviews the geological origins of oil and gas. Assessments of how much oil and gas have been produced and what remains are also discussed. Middle East impact is also discussed.Lerche, I. (). Economics of petroleum production, vol.1. Brentwood, England: Multi-science Publishing Co. - This source is concerned with hydrocarbon production economics and explores how risk should be managed so that desired levels of profits can be maximized.Odell, P. (1999). Fossil fuel resources for the 21st century. London: Financial Times Energy. - This text provides a survey of the energy resources for the foreseeable future and argues that there is not a supply crisis.Odell, P. (2001). Oil and gas: Crisis and controversies 1961-2001, vol. 1. (Global Issues). Brentwood, England: Multi-science Publishing Co. - This volume of collected papers and essays charts the sequence of significant developments over the past 40 years of gas and oil. The book also explores the economic and political inputs to the global oil and gas industry’s organization and markets.Odell, P. (2001). Oil and gas: Crisis and controversies 1961-2001, vol. 2. (Europe’sEntanglement). Brentwood, England: Multi-science Publishing Co. - This second volume looks at issues surrounding oil and gas and a succession of fundamental changes in European energy economy during the last 40 years. Reasons are examined for why imported oil replaced indigenous coal as the primary energy source in the early post World War II period.Research Papers on Fuel CellsSome of the following are available on the Internet, as noted.Haile, S. M., (November 25, 2003). Fuel cell materials and components. Acta Materialia, 51(19), pp. 5981-6000. AVAILABLE AT: . Doran, P., Robeson, S., Wright, D., et. al. (July, 2003). Finance and the fuel cell industry: A review of the current financing climate. International Journal of Hydrogen Energy, 28(7), pp. 713-715. AVAILABLE AT: , V & Cooper, J. S., (February 25, 2003). Review and analysis of PEM fuel cell design and manufacturing. Journal of Power Sources, 114(1), pp. 32-53. AVAILABLE AT: , R. M. (January, 2003). Solid oxide fuel cells. Chemical Society Reviews,32(1), pp. 17-28. AVAILABLE AT: , A. B., Traversa, E., (October, 2002). Solid oxide fuel cells (SOFCs): A review of an environmentally clean and efficient source of energy. Renewable and Sustainable Energy Reviews, 6(5), pp. 433-455. AVAILABLE AT: , G. J. K., (NOV 30, 2001). Recent advances in fuel cell technology and itsapplications. Journal Of Power Sources, 100(1-2), pp. 60-66. AVAILABLE AT: , L., Friedrich, K. A., & Stimming, U. (December 15, 2000). Fuel cells: Principles, types, fuels, and applications. Chemphyschem 1 (4), pp. 162-193. AVAILABLE AT: . Business Support MaterialsThese sources are non-technical and will provide the student with information about how to build a business plan around their ideas for case solutions. – of the most comprehensive sites on the Web for small and growing businesses, this site offers over 2000 articles, “how-to’s,” forms, agreements, questions-and-answers, solutions, and services useful to those starting a new business venture. – of the leading sites for breaking financial news, investor tools and data, gives access to business information, including the latest data and analytical tools. – offers a large collection of free sample business plans online and helpful tools and know-how for managing a business. The site includes practical advice on planning, interactive tools, and a panel of experts available to answer specific questions.The Business Forum Online – service springs from a weekly newspaper column addressing issues and questions of specific interest to entrepreneurs and emerging businesses. Each column focuses on the immediate consequences?of the issue to the owner/manager of the emerging business. – , a comprehensive resource for small businesses, contains tips, articles, ideas, templates, worksheets, sample business plans, tools, financial benchmarks, sample contracts, and websites.These business sites may offer some ideas and provide some review articles. Some sites may require a fee. Or you may wish to use the Library for paper copies of current and past articles.Wall Street Journal- Fortune- Harvard Business Review- - website of the weekly business magazine, this site offers news and related information for the entrepreneur. An archive of articles is also provided. Some services may require subscription. -Patent and Trademark OfficeADVO/stats- SBA Office of Advocacy---Economic Statistics and Research -SBA Small Business Administration---SBA Support in starting, financing and managing a -Small and Home Based Business LinksProvides support services for home-based companies.sbaer.uca.edu- Small Business Advancement National Center---Resources include newsletters, archives, SBA and other Government sites and related affiliates.- Strategic Business Planning Co.---The mission of the Strategic Business Planning Co. is to help organizations define their mission and achieve their objectives by developing business and strategic plans and by periodically conducting a comprehensive review of the environment in which they operate.- U.S. Business Advisor---U.S. Business Advisor – a one-stop electronic link to the information and services government provides for the business community—Laws and regulations, forms and support services.- U.S. Census Bureau---Resources include population census, economic data, Business surveys, and other related Bureau statistics. - Dow Jones – Latest financial information about stock market performance. - The Entrepreneur's MindThe Entrepreneur's Mind is a Web-based resource that presents an array of real-life stories and advice from successful entrepreneurs and industry experts on the many different facets of entrepreneurship and emerging business.- Entrepreneur Magazine--- Provides solutions for growing businesses- Engineering projectsProvides information about new products and ideas (some student developed).Online Experts The Online Experts play an important part in the PBL model, because they connect the learner with an experienced person in the field related to the case. Selecting these individuals is critical to the success of the program, in that they must be willing to respond to students’ e-mails, telephone calls, and/or have meetings with students. Online Experts will be selected at the time the case is implemented in order to be current and to connect to the local environment.Professors of EngineeringMarketing ProfessionalLegal AdvisorAccountantGovernment Environmental OfficialsMayor of Anchorage, AKOil Company RepresentativeOak Ridge National LabsOnline Resources and Video Clips(Under development) Available at: ImplementationUsually the class is divided up into teams of 4-5 people, who are given an opportunity to review the Entrepreneurs in Action! exercise and to develop strategies for solving the situation or to see new ventures. Thus, students work together in small groups and learn a wide variety of skills related to teamwork development, problem identification, resource analysis and synthesis, product or process identification, potential market development, the application of cross-disciplinary thinking, product and process cost analysis, and written and verbal presentation skills. In this model, the case presents the students with an unresolved issue, provides some resources and permits the students to take charge of their own learning and to develop a new business venture out of the given situation.Introducing CasesSeveral methods may be used to introduce the Entrepreneurs in Action! cases to the class, as follows: Divide the class into groups and to present the case to each group and permit limited discussions between groups. Permit a selected number of students to role-play the scenario as a way of introducing the case.Fishbowl. A small group of students may be requested to sit in the middle of the room and to discuss topics related to the case. The other students would observe and would synthesize the events afterwards.Students may also be shown selected video clips to start the entrepreneurial thinking process. Some video clips are “The Triumph of the Nerds” series, the “Apprentice” show, the “October Sky” movie, “Pirates of Silicon Valley” movie, the “Seabiscuit” movie, or the Public TV version.Student ActivitiesStudents are expected to participate actively in their groups and to contribute to developing creative ideas for possible business ventures. In doing so, students may be required to learn through reflections. Students can be required to keep a journal of the activities of each group meeting and to record his or her thoughts and comments about the process. Students may also use concept mapping to study the issues and track progress development. IHMConcept Map Software is available free at final products to the cases are usually a written business plan and a final oral presentation. The final oral presentation can be given to different groups, such as the local Chamber of Commerce, other business and civic groups, a panel of Online Experts and/or to the class. A rubric is used to judge the creative and entrepreneurial ventures and grades are assigned based on the rubric evaluation. The development of the final product usually follows the outline below.Phase One – Doing the ResearchWrite a position paper on the role of oil in energy policy, with particular emphasis on the current national and international problems of shortages and rising prices. Discuss the societal and market forces that have an effect upon the issue. Identify a certain area of the problem space that interests you.Phase Two – Find a SolutionWorking in groups, brainstorm the development of a range of products, services and policies that would contribute to the solution of the problem issue. Your group should then choose one product or service for further development as a contributor to the overall solution of the problem. Fully expand upon the product or service, explaining in detail its design rationale, creation and implementation. Keep in mind that the project must be marketable and must be financially self-sustaining. Develop your group’s business plan and presentation format.Phase Three – Taking it PublicPresent your group’s solution to a team of peers, educators and experts in the field. You will submit to their evaluation, just as you would do in actual practice. You should employ a variety of presentation techniques, including a written business plan, handouts, and computer-based presentation.AssessmentsFormative1. Weekly logsStudents will submit a summary of their activities on a regular basis, the frequency of which will be decided by the instructor. The students should include a concise description of the activities and an analysis of their effectiveness. It is suggested that the summary of activities be part of a computer managed instructional program such as Prometheus, Blackboard or others. This allows the instructor and student groups to monitor their weekly progress.2. In-class observationsInstructors will observe group work and interact in the role of facilitator as needed.3. Position PaperThe paper required in Phase One will be graded for critical thinking and analytical substance. Instructors will also use the papers to assist in forming like student groups.4. Teams of peers and visiting experts will evaluate the final presentation for content and appearance of the final product.Summative1. Business Plan EvaluationsInstructors will evaluate the completed business plans for accuracy, content, breadth, depth, and professional appearance. 2. Presentation EvaluationInstructors will assess the professionalism of the final presentation, taking into account the content and appearance of the final product. ReferencesBishop, S. (June 17, 2004). ANWR has left the house. Fairbanks News-Miner. AVAILABLE AT: Economist. (October 25, 2003). The end of the oil age; The future of energy. Economist, v. 369, p. 12.Energy Information Administration (May, 2004). Monthly Energy Review. AVAILABLE AT: , S. (2002). Hydrogen futures: Toward a sustainable energy system. International Journal of Hydrogen Energy, 27, pp. 235–264.MacLean, H. L.& Lave, L. B. (2003). Evaluating automobile fuel/propulsion system technologies. Progress in Energy and Combustion Science, 29, pp. 1–69.Maugeri, L. (May 21, 2004). Oil: Never cry wolf – why the petroleum age is far from over. Science, v. 304, pp. 1114–1115.Ogden, J. M., Williams, R. H. & Larson E. D. (2004). Societal lifecycle costs of cars with alternative fuels/engines. Energy Policy, 32, pp. 7–27.Skinner, C. W. (August, 1995). Measuring dependence on imported oil. Monthly Energy Review, August, 1995, pp. ii –iii. Zhang, Y., Dubé, M.A., McLean, D.D. & Kates, M. (2003). Biodiesel production from waste cooking oil: 1. Process design and technological assessment. Bioresource Technology 89, pp.1–16.This work is part of the Forum for Entrepreneurship Education at Vanderbilt University and was support in part by The Coleman Foundation Inc.-- Grant number 4446-- Entrepreneurs in Action!, and The National Science Foundation under Grant No. 0091632 and other related funds. (Any opinions, findings, and conclusions or recommendations expressed in this presentation are those of the author(s) and do not necessarily reflect the views of the National Science Foundation). wil.clouse@vanderbilt.edu ................
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