A trio of researchers with Carnegie Mellon University has found that the U.S. energy market has become more unstable over the past decade, and because of that, expert predictions have become more error prone.
In their paper published in the journal Nature Energy, Evan Sherwin, Max Henrion and Inês Azevedo describe their study of the volatility of the U.S. energy sector, what they found, and suggest that some of the instability may be due to structural changes in the U.S. and world energy systems.
Steven Davis with the University of California offers a News & Views piece on the work done by the team in the same journal issue.
Predicting coal production, gasoline imports, and natural gas production in the United States has become more challenging in recent years, the researchers claim, due partly to known and unknown factors—and that, they claim, is important, because world energy systems are such a major part of world economics in general.
The trio came to this conclusion after conducting a study of the energy system in the U.S.
More specifically, they looked at energy statistics from 1952 to 2015, such as production numbers and prices.
As part of their study, they looked at volatility for each year, which was calculated by factoring in the amount of change and how large it was.
They also compared predictions made by energy experts with actual outcomes to see how well they fared over the same time period.
The researchers report that the most recent decade was the most volatile.
They also found that the most recent decade proved to be the most challenging for experts to predict, as well, as they were wrong more often than in previous decades.
The researchers note that the rise in fracking, which led to an increased supply of natural gas and plummeting prices, most certainly played a major role in some of the volatility seen in the last decade, but insist it does not account for all of it—the volatility began before the increase in fracking.
They point out that at this time, it is not clear what other factors might be involved, but suggest that cultural shifts in the U.S. and world economy may be a factor.
More information: Estimation of the year-on-year volatility and the unpredictability of the United States energy system, Nature Energy (2018) DOI: 10.1038/s41560-018-0121-4 , https://www.nature.com/articles/s41560-018-0121-4