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Fundamentals of
Global Energy Business
Michael J. Orlando
University of Colorado - Denver

week 5: Political Factors in Energy Business

video 5: Political Issue Assessment Summary
Literature on political issues:
•  Lasswell & Kaplan (1950) Power & Society
•  Douglass North (various), on institutions
•  Rational Choice Political Economy:
–  collective action problems from business perspective
– e.g. David Baron (2010) Business and Its
Environment
–  expected utility theory applied to political bargains –
e.g. Bruce Bueno de Mesquita (various)

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Issue Life Cycle:

political
concerns issue
decision

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Decision making in political forums:
•  formal political forums
e.g. channel of
e.g. decision public influence
legislative: law election
executive: regulation lobbying
judicial: court decision testimony

•  informal political forum

e.g. channel of
e.g. decision public influence
court of public opinion: boycott direct

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Stakeholders influence political
decisions:
•  stakeholder preference = issue position

•  influence per mix of intensity and capacity

–  intensity of impact => demand for political action
•  relevance
•  resolve
–  capacity to influence => supply of political action
•  resources – financial, organizational
•  authority – formal and informal
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e.g. Keystone XL Pipeline:
•  TransCanada proposed pipeline to transport oil
from Canada and US northern plains states to
Gulf Coast

•  Requires Presidential permit (from US Dept. of

State) per crossing international boundary

•  Issue is ‘approve’ or ‘deny’

(source: Congressional Research Service report R41668, December 2, 2013)

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e.g. Keystone XL Pipeline:

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e.g. Keystone XL Pipeline:
•  Concerns:
–  GHG emissions / climate change (CC)
–  local environmental impact (Ecol)
•  sensitive Sand Hills ecology
•  water
–  jobs / economy (Econ)
–  energy security (ES)
–  public safety, compared to rail transit (PS)

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e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  

concerns  

issue  position  
demand:  
 -­‐  relevance  
 -­‐  resolve  
supply:  
 -­‐  resources  
 -­‐  authority  
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e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position  
demand:  
 -­‐  relevance  
 -­‐  resolve  
supply:  
 -­‐  resources  
 -­‐  authority  
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e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position   N   N   ?   Y   Y  
demand:  
 -­‐  relevance  
 -­‐  resolve  
supply:  
 -­‐  resources  
 -­‐  authority  
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e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position   N   N   ?   Y   Y  
demand:  
 -­‐  relevance   +   ++   +   0/+   ++  
 -­‐  resolve  
supply:  
 -­‐  resources  
 -­‐  authority  
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Business School .
e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position   N   N   ?   Y   Y  
demand:  
 -­‐  relevance   +   ++   +   0/+   ++  
 -­‐  resolve   ++   0/+   0   0/+   ++  
supply:  
 -­‐  resources  
 -­‐  authority  
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Business School .
e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position   N   N   ?   Y   Y  
demand:  
 -­‐  relevance   +   ++   +   0/+   ++  
 -­‐  resolve   ++   0/+   0   0/+   ++  
supply:  
 -­‐  resources   +   0/+   ++   +   ++  
 -­‐  authority  
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e.g. Keystone XL Pipeline:
nat’l   local  
enviro   enviro   nat’l  
stakeholders:   group   group   POTUS   security   industry  
CC,  
concerns   Econ,  
CC   Ecol,  PS   ES,  …   ES,  PS   Econ  
issue  position   N   N   ?   Y   Y  
demand:  
 -­‐  relevance   +   ++   +   0/+   ++  
 -­‐  resolve   ++   0/+   0   0/+   ++  
supply:  
 -­‐  resources   +   0/+   ++   +   ++  
 -­‐  authority   +   +   ++   ++   +  
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