chapter  1
8 Pages

Introduction

WithAlfred Petrick

Management of an energy program requires expertise and confidence in assessing the economic feasibility of development of internal as well as external energy sources. Such assessment is interdisciplinary in nature, requiring expertise in geology, geophysics, exploration management, resource engineering, and marketing. The evaluator must develop a physical description of the exploration, extraction and processing necessary for the energy source. The petroleum case study is also used to introduce the expected monetary value concept and its use in drilling decisions by petroleum explorationists. The analytical studies of petroleum, uranium, and coal development rely on professsional estimates of project costs. Cost engineering has developed rapidly, especially in the development of computer models that make the computer and microcomputer extremely useful cost forecasting tools. Knowledge of how cost forecasts are made is necessary for an understanding of the economic analysis of new energy sources. The chapter also presents an overview of the key concepts discussed in this book.