Reminiscences of an Energy-Met: Products, Process and Professionalism Stephen Bennett, Stephen Bennett, Scripps Director of Business Development Scripps Director of Business Development April 2009
Reminiscences of an Energy-Met: Products, Process and Professionalism Stephen Bennett, Scripps Director of Business Development April 2009.
Dec 21, 2015
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Reminiscences of an Energy-Met: Products, Process and
Professionalism
Stephen Bennett,Stephen Bennett,Scripps Director of Business DevelopmentScripps Director of Business Development
April 2009
Ramblings of a Wx Weenie
Much of this presentation is "soft science," comprised of observations I've made while working as a proprietary operational meteorologist and while managing "weather research" teams for energy trading and reinsurance underwriting. I'm also weaving in even "softer science" by discussing some philosophy gleamed from recent bestselling business publications, communication training and leadership theory. While I consider myself to be a “hard” scientist - I believe the “soft stuff” is where we stand to make the quickest improvements in our daily jobs. Those improvements also lead to some of the greatest return on our time in professional development.
Disclaimer #1
Ramblings of a Wx Weenie
There are many who say the world has changed. Markets may not currently act/react to weather as they used to. I begin with the basic assumption that market fundamentals (i.e. weather driven energy demand) will return as a market driver.
Now is the time to prepare. Exploit the opportunity to learn and improve your techniques while the intensity/focus on weather is diminished.
Disclaimer #2
• Operational Met: Standard Route– Basic Education– Basic Experience
• Transition to Trading Support– Leadership Roles– Professional Degree
• Recent Moves– Academic Universe– Bridge to Business
Quick Introduction
Starting Exercise…Please Stand if your primary job involves:
Forecasting the Weather
Informing and Advising Decision Makers
Starting Exercise…Sit down and become anonymous…
From the list below: Please note your most significant regular-working challenge
A: Time to Complete Tasks
B: Time to Fully Analyze Data
C: The Forecast Itself
D: If They’d Only Listen!
E: None of the Above
Starting Exercise…Please Stand if your primary job involves:
Utilizing Forecast Information from Meteorologists
Making Decisions and Deploying Capital
Starting Exercise…Sit down and become anonymous…
From the list below: Your most significant challenge re: weather information
F: Difficult to Understand
G: Difficult to Apply
H: Confidence Issues (Over/Under Confident Met)
I: Difficult to Value
J: None of the Above
Cross Cutting Themes
Time Management
Time to Complete
• Workload• Organization• Distraction
• Time Bombs• Style
Forecast & Analysis Process
Time to Fully AnalyzeThe Forecast Itself
Difficult to ApplyDifficult to Value
• Efficiency• Heuristic Pitfalls
• Scientific Limitations• Area of Expertise
• Remaining Current
Communication
If They’d Only Listen!Difficult to Understand
Confidence Issues
• Style• Culture
• Recognize Limitations• Recognize Value
• Flexibility
Know your customer!!
Cross Cutting Themes
Time Management
Time to Complete
• Workload• Organization• Distraction
• Time Bombs• Style
Forecast & Analysis Process
Time to Fully AnalyzeThe Forecast Itself
Difficult to ApplyDifficult to Value
• Efficiency• Heuristic Pitfalls
• Scientific Limitations• Area of Expertise
• Remaining Current
Communication
If They’d Only Listen!Difficult to Understand
Confidence Issues
• Style• Culture
• Recognize Limitations• Recognize Value
• Flexibility
Know yourself!!
Cross Cutting Themes
Time Management
Time to Complete
• Workload• Organization• Distraction
• Time Bombs• Style
Forecast & Analysis Process
Time to Fully AnalyzeThe Forecast Itself
Difficult to ApplyDifficult to Value
• Efficiency• Heuristic Pitfalls
• Scientific Limitations• Area of Expertise
• Remaining Current
Communication
If They’d Only Listen!Difficult to Understand
Confidence Issues
• Style• Culture
• Recognize Limitations• Recognize Value
• Flexibility
Time Management Issues
1) Workload: Are you doing too much??• What are you doing?? Look at your products…
• Create a “time inventory.”• Categorize the Inventory. (ex - Short Range Fcst; Demand Model; Seasonal; etc) .• Quantify Perceived Value per Category - Simple Survey• Quantify Skill Per Product• Calculate Actual Value per Product
• Perceived Value x Skill = Actual Value• Calculate Time Value Per Product
• Actual Value x Total Time = Time Value• Sort and Review!!
Adjust if Necessary• Do it… Outsource it… Kill it…
I struggle just to complete all of the products my traders require!!
Time Management Issues I struggle just to complete all of the products my traders
require!!
2) How Are You Organized?• Incoming Information Streams - Technology Solutions?• Product Queue - Maximize Parallel Processes?
3) Tips from Doctor Phil• Keep a fully accurate (and totally private) “time log” • Time analyzing data?• Time producing products, reports, briefings, etc?• Time interacting with other mets and traders?
• Data gathering versus “other”…• Time spent on “other?”
Minimize Collateral Damage
Forecast and Analysis Process Give me more time with the models!! It’s a hard forecast!! Great weather forecast - what do I do with it?? Great weather forecast - but how important is it??
Forecast and Analysis Process Give me more time with the models!!
1) How efficient are you??• Time spent on “monkey work” vs. “intellect”• Technology solutions?• What’s your “starting point”?
Forecast and Analysis Process Give me more time with the models!!
1) How efficient are you??• Time spent on “monkey work” vs. “intellect”• Technology solutions?• What’s your “starting point”?
2) Recognize Heuristic Pitfalls• Heur-whaaaat???
It’s a hard forecast!!
Heuristic Analysis
Observe Current and Recent Weather
Analyze Model Output
Additional Research
Forecast• Observe Reality
• Experience
• Review the Models
• Experience
• Write the Forecast
Forecast and Analysis Process It’s a hard forecast!!
2) Recognize Heuristic Pitfalls• Limited number of observations• Limited View / Limited Scope• Subjective Unanticipated Biases• Taleb’s “Narration Fallacy”• Correlation versus Causation• Human Factor• Put simply - It works well until it doesn’t work at all
Forecast and Analysis Process It’s a hard forecast!!
2) Recognize Heuristic Pitfalls• Limited number of observations• Limited View / Limited Scope• Subjective Unanticipated Biases• Taleb’s “Narration Fallacy”• Correlation versus Causation• Human Factor• Put simply - It works well until it doesn’t work at all
3) Control Heuristic Pitfalls (as much as you can)• Beware the “boundaries” of the analysis• Bounce your conclusions off people you trust• Quantify as much as you can• Engage “pure” R&D• Admit the stability of the ground beneath you• Dr. Phil diagnosis - KNOW yourself - Human days versus Computer Days
Forecast and Analysis Process It’s a hard forecast!!
4) Recognize and Acknowledge Scientific Limitation• Spot “the line” between scientific analysis and science fiction• Don’t cross it!!• Stay current to understand where the line is moving
5) Assess your own Expertise and Knowledge Base• Spot “the line” where your expertise ends• Cross with caution
• Learning Curves Take Time• Learning & Error: Package Deal• Customer Awareness/Reliance
Forecast and Analysis Process
1) Quantify Forecast Skill• Beyond the standard metrics
2) Quantify/Qualify Confidence• Be consistent and meaningful
3) Team-Up to Work with Market Data• Quantify Market Impact
Great weather forecast - what do I do with it?? Great weather forecast - but how important is it??
Communication I’m a great forecaster - if they’d only LISTEN to me!! What the heck are the weather-folk talking about?!? Overconfidence - the met never verifies… Under-confidence - we miss the big moves!
Communication I’m a great forecaster - if they’d only LISTEN to me!! What the heck are the weather-folk talking about?!? Overconfidence - the met never verifies… Under-confidence - we miss the big moves!
1) Dr. Phil Moment - Think about Your Communication Style• “The Screamer”• “The Quant”• “The Hedger”
Think about style…
A strong trough will dig into the West during the period bringing exceptional late season cold weather from the Rockies to California while a new ridge expands into the Midwest. This resembles the recent “Omega Block” pattern with troughing remaining in the Northeast along with unseasonably cool weather. The Northeast could get a taste of late winter if today’s operational runs verify.
The Screamer
Think about style…
The general pattern implies that a trough-west / ridge-central / trough-east scenario will emerge during the forecast period. The 00z operational run appears overdone with cold in the East. 50% of model solutions are below normal in the NYC to DCA corridor while 20% indicate much below normal. 20% of the solutions offer a normal scenario and 10% show above normal.
The Quant
Think about style…It is possible that a new trough will develop in
the West causing a Ridge to pop in the Central U.S. but keeping a trough in the East during the forecast period. This scenario would lead to B or MB in the West and A to MA in the Rockies and Plains. It’s important to note, however, that operational models tend to overamplify the pattern and ensemble runs are not as cool in the East. Additionally, there is some indication that the pattern could progress more quickly than expected which would favor a burst of warmer weather in Midwest and the East.
The Hedger
Communication I’m a great forecaster - if they’d only LISTEN to me!! What the heck are the weather-folk talking about?!? Overconfidence - the met never verifies… Under-confidence - we miss the big moves!
2) Be Honest About Your Limitations and Be FIRM About It.• “I don’t know.”• “The science just isn’t solid enough to answer that question.”• “Use ‘all paths’”
3) Recognize the Floor’s Culture - Adapt• When in Rome…• Gradually Educate
4) Be Open Minded and Flexible
Finally - ProfessionalismProfessional Standards in the Legal
Profession
Every state in the United States has a regulatory body (usually called a state bar association) that polices lawyer conduct. When lawyers are licensed to practice in a state, those lawyers subject themselves to this authority.
Lawyers who fail to comply with local rules of ethics may be subjected to discipline ranging from … reprimand to disbarment.
In the United States, the American Bar Association has promulgated model rules that have been influential in many jurisdictions. The model rules address [many things including] maintaining the integrity of the profession.
American law schools are required to offer a course in professional responsibility, which encompasses both legal ethics and matters of professionalism that do not present ethical concerns.
Finally - ProfessionalismProfessional Excellence for Meteorologists
Private sector (and broadcast) meteorologists are often the primary “science communicators” for professional and
public audiences. We owe it to ourselves, our customers, and our profession to achieve a level of professional excellence.
Finally - Professionalism1) For Information Within Your Area of Expertise
• Use Your Experience Base• Use Operational Research• Remain Current
2) For Information Outside Your Area of Expertise• Provide “Informed” Opinions Based on Your Research
• Engage Experts• Access Fields of Research• Learn It Before you Teach It• Realize - This is a TIME CONSUMING PROCESS!!
--OR--• Acknowledge “State of the Science”
• Access research summaries• Look to professional associations• Identify experts and compile/communicate consensus
--OR--• Decline Comment
• “I don’t know…”
In Conclusion - Main Points• Time Management
– Big Calls vs. Forecast Details– Real Value vs. Gotta Get Done
• Forecast Analytics– Met Intellect vs. Monkey Work– Correlation, Causality and Scientific Limits
• Communication– Know Yourself– Know Your Customer
• Professionalism– Learn It, Accept It, or Shut It
Thank You
The newly created "Office of Business Development" at Scripps has three primary initiatives: (1) Executive education, focused on the link from earth sciences to business (including weather, climate, natural hazards and biological applications); (2) Research partnerships, including the Scripps Partnership for Hazards and Environmental Applied Research (SPHEAR); and (3) Scripps innovation, invention, and new venture creation. http://sio.ucsd.edu/business/
Scripps is one of the world’s oldest, largest, and preeminent centers for ocean, earth and atmosphere research. Scripps science ranges from seminal work in Global Climate Change (including the Keeling Curve and a share of the Nobel Prize as part of the IPCC) to understanding El Nino's impact on North American weather to new discoveries in biofuels and biopharmaceuticals from the ocean. Scripps is also at the forefront of geophysical research ranging from studies geared toward oil/gas exploration to gaining a better understand catastrophic earthquakes. www.sio.ucsd.edu
Stephen Bennett, SPHEAR Executive DirectorDirect: (858) 246-0065Mobile: (312) 590-6360
In the first quarter of 2009, a group of SPHEAR corporate partners teamed with Scripps researchers to launch a pilot project that will deliver insights on weather extremes as applied to energy trading. Scripps is proud to be working with Chesapeake Energy, Susquehanna International Group, and Citadel Investment Group on our first project that focuses on cold weather outbreaks and predicting their impact to the energy complex. The project: (1) uses a comprehensive definition to examine the variability of regional cold extremes; (2) uses powerful statistical tools to investigate causality and demonstrate skillful seasonal-to-interannual predictability of the seasonal probability and other features of regional cold outbreaks; (3) examines synoptic causes and precursors of individual regional cold events; and (4) expects to use this information to improve the lead-time and skill of their extended range weather forecasts by tapping into relevant precursor weather information and conditioning the weather forecast on contemporaneous large-scale climate information.
The Scripps Partnership for Hazards and Environmental Applied Research (SPHEAR) is designed to provide member companies an opportunity to work directly with today’s leading scientific minds. Corporate partners expect a return-on-investment and academic partners expect to break new scientific ground. Both sides work closely together to set a research direction then, in return for their capital contribution, corporate partners interact directly with teams of earth, ocean, and atmospheric scientists throughout the entire scientific process. Corporate partners seek to enhance their risk management practices, investing strategies, product lines, product pipelines, and corporate governance practices by applying Scripps research findings. http://sio.ucsd.edu/special/sphear/
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