Energy Forecasting in Volatile Times Federal Forecasters Conference The Value of Government Forecasts September 27, 2012 Washington, D.C. Adam Sieminski, Administrator U.S. Energy Information Administration Independent…
About EIA The U.S. Energy Information Administration (EIA) collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its…
Short-Term Energy Outlook: U.S. retail gasoline and crude oil prices dollars per gallon 4.50 forecast 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 price difference gasoline crude…
Energy price forecasts are inherently volatile West Texas Intermediate crude oil price dollars per barrel 180 160 140 120 100 80 60 40 20 0 Jan 2011 Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 historic price forecast price NYMEX…
Probability of December 2012 WTI contract expiring above different price levels 100% Average of the 5 trading days ending on 80% 1-Oct-2011 1-Aug-2011 60% 40% 20% 0% 50 75 100 125 150 Price (dollars per barrel) Source:…
Domestic production of shale gas and tight oil has grown dramatically over the past few years shale gas production (dry) tight oil production for select plays billion cubic feet per day million barrels of oil per day 30 1.0 Rest of US…
Speed of development raises new data collection issues Texas oil production million barrels per day 2.0 1.8 Differences indicate lags in reporting and processing data 1.6 at the State level 1.4 1.2 Estimated Oil Prod 1.0…
Increased natural gas production lowered prices power plants paid for this fuel South delivered fuel prices dollars per megawatthour 90 80 70 A 60 50 40 30 20 10 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Appalachian Imported Coal…
Lower natural gas prices at power plants lead to increased natural gas use for power generation Monthly generation from major fuels thousand megawatthours 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000…
Challenges in providing official forecasts and projections to policymakers: Focus on the near-term Complicated models Uncertainties in the impact of policy changes Adam Sieminski September 27, 2012 10
Accurate forecasts in global markets require global inputs OPEC surplus capacity and historic average million barrels per day 6 forecast 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2001-2011…
Correlations (+ or -) between daily returns on crude oil futures and financial investments have also strengthened 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 S&P 500 U.S. Dollar* U.S. Treasury** WTI crude oil price…
Accurate forecasts also require monitoring of events outside of model inputs 10 year bond yield (spread above German yields) dollars per barrel 8 140 7 120 6 100 5 80 4 60 3 40 2 1 20 0 0 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12…
Long-term Projections Adam Sieminski September 27, 2012 14
The shale gas & tight oil technology story is only beginning, with much yet to be written Technology is creating new resources out of source rocks Production data provides a rearview mirror perspective see the changes, but with a…
Changing understanding of geology, technology and economics Theory Experiment Commercial Practice Geology Engineering / Technology Economics Gas in Place Technically Recoverable Resources Drilling Data Adam Sieminski…
Shale gas resource potential and related costs remain highly uncertain Shale gas production trillion cubic feet Three alternate cases 25 High Technically Recoverable Resource (TRR) case High TRR assumes High EUR case with wells…
Annual Energy Outlook 2012: U.S. dependence on imported petroleum declines U.S. liquid fuel supply million barrels per day History 2005 2010 Projections 25 20 Consumption Extended Policies 14% 36% High TRR 15 60% 49% Net…
Framing outcomes is an important consideration for forecasters Economic impact of greenhouse gas reduction between 2010 and 2025 Change in Real GDP (billion 2000 dollars) Real GDP (billion 2000 dollars) 0 200,000 186,423 185,881…
For more information U.S. Energy Information Administration home page www.eia.gov Short-Term Energy Outlook www.eia.gov/steo Annual Energy Outlook www.eia.gov/aeo International Energy Outlook www.eia.gov/ieo Monthly Energy Review…
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