What Is an Energy Risk Professional (ERP)?
Let me explain what an Energy Risk Professional (ERP) is. It's a professional designation that the Global Association of Risk Professionals (GARP) awards to people working in the oil, coal, natural gas, and alternative energy industries. As of 2021, though, this designation is no longer being offered.
Key Takeaways
You should know that the ERP comes from GARP and is aimed at those in energy sectors like oil, coal, natural gas, and alternatives. It equates to advanced degrees, such as a master's in the United States, and tests your ability to manage physical and financial risks in energy. GARP decided in 2020 to stop offering it, with 2021 as the last year for exams, but only for those who've already passed Part I.
Understanding an Energy Risk Professional (ERP)
If you're pursuing this, you need to complete a rigorous self-study program, pass an eight-hour exam with 180 questions, have at least two years of qualifying work experience, and agree to GARP's professional code of conduct. Once you succeed, you can use the ERP designation with your name, which can boost your job opportunities, reputation, and pay. The program is built by experienced energy pros to cover real-world scenarios. But keep in mind, GARP announced in 2020 that 2021 is the final year for the exam due to dropping interest, so you can't get the designation anymore after that.
Attributes of an Energy Risk Professional (ERP)
The study program for becoming an ERP covers physical energy markets, financial trading instruments, valuation and structuring of energy transactions, risk management in financial trading, financial disclosure, accounting, and compliance. With this designation, you might work for banks, academic institutions, consulting firms, asset management firms, or other organizations dealing with energy risk. It equates to specific degree levels, like a master's in the US, Level 7 in the UK's Regulated Qualifications Framework, Level 12 in Canada's Ontario Qualifications Framework, and Level 6 in Hong Kong's framework, with equivalents in the EU, Singapore, Australia, India, UAE, and South Africa. To keep the designation, you have to participate in the Continuing Professional Development program, which includes podcasts, training courses, and articles to stay updated on industry trends.
The Energy Risk Professional (ERP) Exam
The ERP exam is what you take to earn the designation, and it's designed to test your knowledge of major energy markets and your ability to manage physical and financial risks in energy. It gives a comprehensive overview of energy markets, including upstream and downstream processes, trading and structuring of energy commodities, and identifying, measuring, and managing risks. You must pass two multiple-choice exams: Part I with 80 questions in four hours, focusing on physical energy commodity markets, and Part II with 60 questions in four hours, focusing on energy derivatives and risk mitigation.
Additional Exam Details
Since the exam is no longer offered, only Part II was available in 2021 for those who completed Part I, costing $475 or $350 for early registration. There are no prerequisites, it's pass/fail, you need two years of relevant work experience after passing, the last exam date was May 15, 2021, results come in about six weeks, and the official site is http://www.garp.org/erp/.
What the Energy Risk Professional (ERP) Exam Covers
Part I of the exam focuses on crude oil and refined product markets, natural gas and coal markets, and electricity markets and power generation. Part II covers financial energy products, risk assessment and energy price modeling, and risk management tools.
