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Shannon B. Burchett, strategic management Risk Limited, has been involved in three start-ups in the energy industry.
He also was also involved from the beginning with one of the first power traders and marketers, Duke Louis Dreyfus.
Louis Dreyfus hired Burchett from Chase Manhattan Bank.
He managed marketing and management sales for energy products and
services at Duke Louis and helped develop strategies
and products for the emerging electricity market.
He also had a big role in changing the firm from a proprietary trading firm into a risk management provider.
Electric Clearing House – part of investment bank Morgan
Stanley – and Enron were the only others to have power-trading
operations, but Duke Louis was the first with strong electricity market
Burchett set up a regional trading arm for major energy provider as president, he came up with the strategic plan for the business and also
managed the design and construction of the 100-desk company’s trading
It was a timely move, says Burchett – started setting up the
floor, just in time for a big electricity price spike.
Indeed, given that such volatility is part and parcel of the energy sector,
Burchett feels his experience of finance has been crucial.
He created innovative structured-note and hybrid-derivative contracts for clients while at Chase and, more recently, the concept for companies and lenders to assess risk profiles post-Enron.
Burchett has to take a long view of the markets, as a strategist – and he
clearly has the background to do so. Oil and natural gas prices and
extreme price volatility may be early indications of things to come over the next decade, he says.
Assuming the current situation continues, he feels the need for energy consultancies will grow.
Demand for expertise will be strong in specialised areas such as risk
management strategy and quantitative analysis, he says, especially if new energy legislation is finally passed after the US election.
He points to possible developments for the electricity grid and for restructuring in the electricity sector if the Public Utilities Holding Company Act is repealed.