But what if the boom is just a bubble?
Revisiting the U.S. Department of Energy Play-by-Play Forecasts through 2040
from Annual Energy Outlook 2016
In 2014, Earth Scientist David Hughes took a hard look at the EIA’s existing Annual Energy Outlook shale gas and tight oil forecasts and conducted his own play-by-play, in-depth analysis to create the groundbreaking report, Drilling Deeper. In Drilling Deeper, as in the follow-up report 2015 Shale Gas Reality Check, he found that EIA projections for shale gas production and prices were consistently and greatly overstated.
In September 2016, the EIA released its Annual Energy Outlook 2016. Consequently, David Hughes applied the same scrutiny to AEO2016 as he has in the past to explore how the EIA’s projections and assumptions regarding shale gas have changed over the last two years, as well as assessed the AEO2016 against both Drilling Deeper and up-to-date production data from key shale gas plays.
The findings in this year’s analysis are consistent with previous assessments of the EIA’s shale gas projections – they trend toward a very high optimism bias, with increasingly unexplained volatility. The EIA’s yearly AEO has enormous influence with policymakers, the media, and through them the general public. The AEO influences government policy and industry investment.
After closely reviewing the AEO2016, David Hughes raises some urgent questions about EIA’s U.S. shale gas forecasts, such as:
Hughes’ findings point to not only increasingly overstated forecasts by the EIA, but also increasingly volatile assessments – both of which are highly troubling. The report raises critical questions about the veracity and volatility of the EIA’s estimates, questions that are especially important as the Trump Administration sets its domestic energy policy.