Changes in2012 ERP®

ExaminationStudy Guide

Changes in ERP® Study Guide for 2012

© 2012 Global Association of Risk Professionals. All rights reserved. 2© 2012 Global Association of Risk Professionals. All rights reserved. 2

NEW READINGS

New Readings for Hydrocarbon Resources

1. Charlotte Wright and Rebecca Gallun. Fundamentals of Oil & Gas Accounting, 5th Edition (Tulsa, OK: PennWell, 2008).

• Chapter 15 ....................Accounting for International Petroleum Operations

2. Bunkerworld. D2 and No.2 Diesel Fuel: An Introduction. (Online reading)

3. Vivek Chandra. Fundamentals of Natural Gas: An International Perspective (Tulsa, OK: PennWell Books, 2006).

• Chapter 1.......................The Basics

• Chapter 2......................Transport and Storage

• Chapter 3 .....................Gas Usage

• Chapter 4 .....................Contracts and Project Development

4. PriceWaterhouseCoopers: Today’s LNG Market Dynamics. (Online reading)

5. Kenneth Medlock. Impact of Shale Gas Development on Global Gas Markets (Wiley Periodicals, Inc., 2011).

(Online reading)

6. James Speight. Handbook of Coal Analysis (Wiley-Interscience, 2005).

• Chapter 1.......................Coal Analysis

• Chapter 2......................Sampling and Sample Preparation

New Readings for Electricity

7. Sally Hunt. Making Competition Work in Electricity (New York: John Wiley & Sons, Inc., 2002).

• Chapter 7......................Trading Arrangements

8. David Schlissel and Bruce Biewald. Nuclear Power Plant Construction Costs. (Online reading)

9. Peter Coy. The Prospect for Safe Nuclear (Bloomberg Businessweek)

New Readings for Renewable Energy

10. Geoffrey Heal. The Economics of Renewable Energy.

11. Chris Grobey, John Pierce, Michael Faber and Greg Broome. Project Finance Primer for Renewable Energy and

Clean Tech Projects. (Online reading)

12. Bloomberg New Energy Finance. Global Trends in Renewable Energy Investment. (Online reading)

3 © 2012 Global Association of Risk Professionals. All rights reserved.

Changes in ERP® Study Guide for 2012

13. Govinda Timilsina and Ashish Shrestha. Biofuels: Markets, Targets and Impacts (The World Bank, July 2010).

(Online reading)

14. State and Trends of the Carbon Market (The World Bank, 2011). (Online reading)

New Readings for Financial Products

15. Dragana Pilipovic. Energy Risk: Valuing and Managing Energy Derivatives, 2nd Edition (New York: McGraw Hill, 2007).

• Chapter 9 .....................Overview of Option Pricing for Energies

• Chapter 10....................Option Valuation

16. Alexander Triantis. Handbook of Modern Finance (New York: Research Institute of America, 2003).

• Chapter 7......................Real Option Valuation

17. William Bailey, Benoit Couet, Ashish Bhandari, Soussan Faiz, Sunaram Srinivasan and Helen Weeds. Unlocking the

Value of Real Options (Oilfield Review Winter 2003/2004). (Online reading)

18. Geoffrey Considine, Ph.D. Introduction to Weather Derivatives. (Online reading)

19. Kevin Baumert and Mindy Selman. Data Note: Heating and Cooling Degree Days. (World Resources Institute, 2003).

(Online reading)

New Readings for Modeling Energy Prices

20. Les Clewlow and Chris Strickland. Energy Derivatives: Pricing and Risk Management (London: Lacima Publications, 2000).

• Chapter 2......................Understanding and Analyzing Spot Prices

• Chapter 4 .....................Energy Forward Curves

• Chapter 8 .....................Forward Model Curves

• Chapter 10....................Value-at-Risk

New Readings for Risk Management Fundamentals

21. Jose Ramon Aragones, Carlos Blanco, and Kevin Dowd. Incorporating Stress Tests Into Market Risk Modeling.

(Online reading)

22. Jon Gregory. Counterparty Credit Risk (West Sussex, England: John Wiley & Sons, 2010).

• Chapter 2......................Defining Counterparty Credit Risk

• Chapter 3 .....................Mitigating Counterparty Credit Risk

23. Craig Pirrong. The Economics of Central Counterparty Clearing: Theory and Practice. (ISDA Working Paper).

(Online reading)

Changes in ERP® Study Guide for 2012

© 2012 Global Association of Risk Professionals. All rights reserved. 4

24. Casualty Actuarial Society, Enterprise Risk Management Committee. Overview of Enterprise Risk Management.

(Online reading)

25. Ludwig Chincarini. The Amaranth Debacle: A Failure of Risk Measures or a Failure of Risk Management?

26. Connecticut Law Review. Risk Management and Corporate Governance: The Case of Enron. (Online reading)

New Readings for Current Issues in Energy

1. NERA Economic Consulting. “Lessons from the BP Deepwater Horizon Oil Spill” (September 2010).

2. Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates. “CFTC Adopts Final Position Limit Rules at October 18

Open Meeting.”

3. Mark A. Cohen, Madeline Gottlieb, Joshua Linn, and Nathan Richardson. “Deepwater Drilling: Law, Policy and

Economics of Firm Organization and Safety.”

4. Richard Morse and Gang He. “The World's Greatest Coal Arbitrage: China's Coal Import Behavior and Implications for

the Global Coal Market.”

5. Ivan Diaz-Rainey, Mathias Siems and John Ashton. “The Financial Regulation of European Wholesale Energy and

Environmental Markets.”

6. International Monetary Fund. “Oil Scarcity, Growth and Global Imbalances.”

DELETED READINGS

Deleted Readings for Hydrocarbon Resources

1. Charles F. Conaway. The Petroleum Industry: A Nontechnical Guide (Tulsa, OK: PennWell Books, 1999).

• Chapter 2......................Petroleum Origins and Accumulation

2. Thomas O. Miesner and William L. Leffler. Oil and Gas Pipelines in Nontechnical Language (Tulsa, OK: PennWell Books, 2006).

• Chapter 1.......................How Pipelines Differ

4. Samuel Van Vactor. Introduction to the Global Oil and Gas Pipelines Business (Tulsa, OK: PennWell Books, 2010).

• Chapter 1.......................Oil and Gas Pricing

5. James H. Gary, Glenn E. Handwerk and Mark. J Kaiser. Petroleum Refining: Technology and Economics, 5th Edition

(New York: CRC Press, 2007).

• Chapter 1.......................Introduction (through section 1.8)

• Chapter 14.3 ................Economics and Planning Applications

5 © 2012 Global Association of Risk Professionals. All rights reserved.

Changes in ERP® Study Guide for 2012

6. Rebecca L. Busby. Natural Gas in Nontechnical Language (Tulsa, OK: PennWell Books, 1999).

• Chapter 8 .....................Regulatory History of the Gas Industry

7. Arthur J. Kidnay and William R. Parrish. Fundamentals of Natural Gas Processing (Boca Raton, FL: Taylor and Francis, 2006).

• Chapter 12 ....................Transportation and Storage

8. Michael D. Tusiani and Gordon Shearer. LNG: A Nontechnical Guide (Tulsa, OK: PennWell Books, 1999).

• Chapter 1.......................The Liquefied Natural Gas Industry

• Chapter 3 .....................The LNG Chain: The Project Nature of the LNG Business

• Chapter 11 .....................The Economics of an LNG Project

Deleted Readings for Electricity

9. Chris Harris. Electricity Markets: Pricing, Structures and Economics (West Sussex, England: John Wiley & Sons, 2006).

• Chapter 6 .....................Power Capacity

11. Richard Baxter. Energy Storage: A Nontechnical Guide (Tulsa, OK: PennWell Books, 2006).

• Chapter 4 .....................Applications

13. Fisher Investments. Fisher Investments on Energy (Hoboken, NJ: John Wiley & Sons, 2009).

• Chapter 6 .....................Alternative Energy

14. Roy L. Nersesian. Energy for the 21st Century: A Comprehensive Guide to Conventional and Alternative Sources

(Armonk, NY: M.E. Sharpe, Inc., 2007).

• Chapter 3 .....................Biomass

15. Tom James and Peter Fusaro. Energy and Emissions Markets: Collision or Convergence? (Singapore. John Wiley & Sons

(Asia) Pte Ltd., 2006).

• Chapter 3 .....................Green Trading Schemes

Deleted Readings for Renewable Energy

16. Steven Errera and Stewart L. Brown. Fundamentals of Trading Energy Futures & Options, 2nd Edition

(Tulsa, OK: PennWell Books, 2002).

• Chapter 7......................Energy Options Strategies

17. Fletcher J. Sturm. Trading Natural Gas: A Nontechnical Guide (Tulsa, OK: PennWell Books, 1997).

• Chapter 4 .....................Hedging and Trading Instruments

18. Tom James. Energy Markets: Price Risk Management and Trading (Singapore: John Wiley & Sons, 2008).

• Chapter 6 .....................Options Trading and Hedging Application Strategies

19. Alexander Eydeland and Krzysztof Wolyniec. Energy and Power Risk Management: New Developments in Modeling,

Pricing, and Hedging (Hoboken, NJ: John Wiley & Sons, 2003).

• Chapter 8 .....................Structured Products: Fuels and Other Commodities

Changes in ERP® Study Guide for 2012

© 2012 Global Association of Risk Professionals. All rights reserved. 6

Deleted Readings for Financial Products

20. Dragana Pilipovic. Energy Risk: Valuing and Managing Energy Derivatives, 2nd Edition (New York: McGraw Hill, 2007).

• Chapter 3 .....................Modeling Principles and Market Behavior

• Chapter 6 .....................The Forward Price Curve

• Chapter 7......................Building Marked-to-Market Forward Price Curves

21. Alexander Eydeland and Krzysztof Wolyniec. Energy and Power Risk Management: New Developments in Modeling,

Pricing, and Hedging (Hoboken, NJ: John Wiley & Sons, 2003).

• Chapter 4 .....................Reduced-form Processes

Deleted Readings for Modeling Energy Prices

22. John Wengler. Managing Energy Risk: A Nontechnical Guide to Markets and Trading (Tulsa, OK: PennWell Books, 2001).

• Chapter 6 .....................Energy Risk Boot Camp: “Must Know” Concepts for Managers and Directors

23. Tom James and Peter Fusaro. Energy and Emissions Markets: Collision or Convergence? (Singapore. John Wiley & Sons

(Asia) Pte Ltd., 2006).

• Chapter 10....................What Risk? An Introduction to Managing Risk

• Chapter 11 .....................Risk-Policy Guidelines

24. Steve Leppard. Energy Risk Management: A Non-technical Introduction to Energy Derivatives (London: Risk Books, 2005).

• Chapter 8 .....................Wider Risk Management Questions

25. Vincent Kaminski (ed). Energy Modeling: Advances in the Management of Uncertainty (London: Risk Books, 2005).

• Chapter 12 ....................Credit Risk Management for the Energy Industry—Some Perspectives

26. Eduardo Canabarro and Darrell Duffie. ALM of Financial Institutions, ed. Leo Tilman (London: Euromoney, 2003).

• Chapter 9 .....................Measuring and Marking Counterparty Risk

Deleted Readings for Current Issues in Energy

1. Skadden, “Energy Derivatives Under the Dodd-Frank Act,” (July 2010).

2. Sidley Austin, “The Dodd-Frank Act’s Effect on Hedging Activities of Energy Companies and Large Energy Consumers.”

3. US Department of Energy, “The Smart Grid: An Introduction.”

4. Global Public Policy Institute, “The 2008 Oil Price Shock.”

5. ALL Consulting Report, “An Overview of Modern Shale Gas Development in the United States.”

Overall the study guide was reduced by approximately 300 pages to a total of just under 2,000 pages of reading. The study guide was

also reorganized into seven sections from the eight used in 2011. Finally, the ERP Exam in 2012 will be reduced from 180 questions to 160.

2012 Energy Oversight Committee (EOC) Members

Ken Abbott ..................................Managing Director, Morgan Stanley & Company

Richard Apostolik .....................President and CEO, Global Association of Risk Professionals

Mark Galicia .................................Commercial Manager, BP North America, Inc.

Gordon E. Goodman ................Trading Control Officer, Occidental Petroleum Corporation

James Brown...............................Managing Director, Morgan Stanley & Company

Mark Jenner .................................Director, Credit Risk, BG Group

Jeff Jewell ....................................Chief Risk Officer, DTE Energy

Glenn Labhart, EOC Chair .....Partner, Labhart Risk Advisors, Inc.

Spyros Maragos ............................VP, Refined Products Analytics, Louis Dreyfus Energy Services, LP

Alessandro Mauro .....................Director of Risk Management, Litasco SA

Mark D. May ......................................Manager, Regional Risk Supply & Trading, Americas, ConocoPhillips

Jeff Parke .....................................Senior Director, Risk Management, Koch Industries, Inc.

Jonathan C. Stein ......................Chief Risk Officer, Vice President, Hess Corporation

Andrew D. Sunderman ............Managing Director, JP Morgan

Glen Swindle ...............................Managing Director, Energy Trade & Marketing, Credit Suisse

John Wengler .............................Director of Market Risk Controls, Hess Corporation

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About GARP | The Global Association of Risk Professionals (GARP) is a not-for-profit global membership organization dedicated topreparing professionals and organizations to make better informed risk decisions. Membership represents over 150,000 risk manage-ment practitioners and researchers from banks, investment management firms, government agencies, academic institutions, and corporations from more than 195 countries and territories. GARP administers the Financial Risk Manager (FRM®) and the Energy Risk Professional (ERP®) Exams; certifications recognized by risk professionals worldwide. GARP also helps advance the role of riskmanagement via comprehensive professional education and training for professionals of all levels. www.garp.org.