Looking Back on Accuracy of Past Forecasts
Daniel Klein is president of Twenty-First Strategies, with forty years of experience in energy, environmental, and economic analysis. After many years as a senior vice president and director of ICF Resources Inc., he founded Twenty-First Strategies in 1995 to offer energy and environmental consulting services to energy companies, government agencies, and others. His work in recent years has focused primarily on climate change, energy security, strategic planning for electric power, sustainability, energy supply and usage, and related policies and strategies. Mr. Klein earned a Bachelor’s degree from the Massachusetts Institute of Technology and an MBA from the Stanford Graduate School of Business.
In May, the Energy Department's Energy Information Administration, EIA, released the first results from its Annual Energy Outlook 2016, AEO.
Figure 1 - U.S. GDP
The AEO Reference Case is the business-as-usual trend estimate. This is given known technology and technological and demographic trends, and includes one possible implementation of the Clean Power Plan, CPP. EIA also prepared a No CPP case that assumes that the CPP is not implemented.
The AEO is a yearly publication for EIA, presenting the latest thinking on future trends. There's a good reason we don't call it the once-and-forever Energy Outlook.
Our thinking about the future changes over time with respect to economic conditions, policies and regulations, technology performance, and market conditions. These in turn shape the AEO projections, and the AEO published this year may look quite different from the AEO projections made in years past.
Rather than just looking at the current AEO in isolation, we can gain additional valuable insights by comparing AEOs published over time. As one example, earlier AEOs projected the U.S. to dramatically increase natural gas imports, but now AEO2016 projects the U.S. to soon become a net exporter.