THE EIA Thread pt 2 (merged)

[FreddyH]

IPM quarterlies plus today's new IEA world record of 87.2-mbd:

[TonyPrep]

IPM quarterlies plus today's new IEA world record of 87.2-mbd

Mmm, I seem to remember that they also posted world records in December and January (for the previous months), which turned out to be rather premature, with sharp downward revisions for both months (November and December). Isn't sharp downward revisions becoming a trend?

[Graeme]

EIA Gas Projections to 2030 Identify Market Changes

This energy outlook for natural gas to 2030 was developed by the US Energy Information Administration and focuses on a short-term reference case, Annual Energy Outlook 2008 (AEO2008), which it compares with the Annual Energy Outlook 2007 (AEO2007) reference case.

Meanwhile, this reference case assumes that current policies affecting the energy sector remain unchanged throughout the projection period. Policy changes-such as the adoption of policies to reduce greenhouse gas emissions-could change the projections.

Trends in energy supply and demand are affected by difficult-to- predict factors: energy prices, US and worldwide economic growth, advances in technologies, and future public policy decisions in the US and in other countries.

Key energy market changes EIA analysts have identified include:

* Higher oil and gas prices.

* Higher delivered energy prices, reflecting both higher wellhead prices and transportation and distribution costs.

* Slower projected growth in energy demand, especially for gas.

* Faster projected growth in the use of (nonhydroelectric) renewable energy forms.

* Higher domestic oil production in the near term.

* Slower projected growth in gas imports.

* Slower projected growth in energy-related emissions of carbon dioxide.

These important adjustments, however, have limited implications for some parts of the overall energy outlook, and US energy consumption will continue to be met predominantly by traditional fossil fuels, with coal, liquid fuel (excluding biofuels included in liquids), and natural gas meeting 83% of total US primary energy supply requirements in 2030-down only slightly from an 85% share in 2006 despite higher energy prices, lower total energy demand, and increased use of renewable energy compared with AEO2007.

redorbit

[pup55]

Here is a link to the pricing assumptions that went into the "reference case" so to speak:

EIA

They have converted all of the pricing to "dollars per million BTU's. For the common good, I have converted the unleaded gasoline estimate back to "dollars per gallon": Actually, this is "cents per gallon" but their decimal point (not mine) was off.

2005 154.7456734
2006 169.831921
2007 177.5272994
2008 177.3966381
2009 168.3629161
2010 163.8043886
2011 159.8307295
2012 156.7138976
2013 154.9307555
2014 152.2346038
2015 149.889226
2016 147.9224267
2017 149.4976868
2018 151.0735676
2019 151.8906677


So I am thinking I will start flirting online or something instead of this, because if the government is right, after this next couple of years, everything will be wonderful.

Seriously, do they not think anyone will do the work to check into this?

Their estimate of the "current price" is only about 40% off at the moment.

(shakes head)

[joewp]

(shakes head)

If I recall correctly, they were reamed by Congress back in the late 70's for completely missing the impending peak of US oil extraction and being too optimistic then. Are they being instructed to sugar coat their estimates so that can be the whipping boy again and the politicians can claim they were just following the projections of the "experts"?

Am I terminally cynical?

[eastbay]

This is 2008. Gasoline is 177 cents per gallon? Where?

A very good way to go broke fast is to make your energy sector investments based on EIA projections.

[pup55]

2005 2.199531211
2006 2.418243564
2007 2.524997946
2008 2.51630709
2009 2.381962133
2010 2.317564115
2011 2.26140612
2012 2.217345415
2013 2.192156479
2014 2.154051573
2015 2.120889864
2016 2.093078266
2017 2.11539978
2018 2.137723861
2019 2.149314667
2020 2.182018632

My bad, I am out of whack this evening. Here is the slightly more reasonable corrected version.

So they are only about 60 cents off for the moment.

When this stuff happens, I always say the same thing: Don't believe everything you see on the internet.

[Oil-Finder]

I'm not sure why people are so skeptical of this. Demand for natural gas in the US has been flat for over 10 years.
http://tonto.eia.doe.gov/dnav/ng/hist/n9140us2A.htm

[Mechler]

Demand for natural gas in the US has been flat for over 10 years.

Um, dude, that's what happens when you relocate almost all of your manufacturing base overseas. I'm not so sure the US public is ready to outsource their driving, much to the dismay of billions of Chinese and Indians.

[eastbay]

With the wholesale exporting of America's manufacturing base over the past 20 years, or so, it's a miracle we're holding steady on NG usage.

Yeah, outsourcing soccer for soccer moms. Good idea. Let the little rascals get driven around in China. I've had enough of them hogging the roads in their monster SUV's anyhow. Good riddance.

[Oil-Finder]

Demand for natural gas in the US has been flat for over 10 years.

Um, dude, that's what happens when you relocate almost all of your manufacturing base overseas. I'm not so sure the US public is ready to outsource their driving, much to the dismay of billions of Chinese and Indians.

People don't drive their cars with natural gas.

I don't believe outsourcing of manufacturing has much to do with flat demand for natural gas. Increased efficiency is almost certainly the main reason for this. After all, there have been tons of natural gas power plants built in the past 10 years. And yet, demand still remains flat.

[Oil-Finder]

Here is an EIA chart showing natural gas demand by end user since 2001:
http://tonto.eia.doe.gov/dnav/ng/ng_con ... _nus_a.htm

- Residential consumption has declined
- Commercial consumption has declined
- Industrial consumption has declined
- Electric power consumption has gone up
- Vehicle fuel consumption has also gone up, but that's a very small percentage of total use

So it's not just industrial use which has declined. Aside from electric power generation, it's been a broad-based decline.

[Mechler]

Here are the numbers comparing 1997 to 2006:

Residential -12.3%
Commercial -11.8%
Industrial -23.6%
Electric power +53.1%

Efficiency may be a part, substituting electrical energy for gas energy may be a factor, as well as climate change (hotter summers and milder winters = more A/C (electricity) and less gas heating). It would be nice to see the data, but I'm sure the decrease in industry is a factor.

[Frank]

I've been trying to find information about historical EIA forecasts versus what really happened. There's an op-ed type article in our local paper talking about their 2008 forecast for 2030 which calls for crude at $71 barrel. (This can be seen from the EIA website.) This particular writers perspective is that conservation and renewables aren't worth the bother and that everything will be all right because the EIA says so.

I know that they've been wildly inaccurate before and want to have my ducks-in-a-row before writing to correct the impression this article may have left. The writer is a locally-recognized, retired, college prof. with some sort of credibility. Can anyone help me with some numbers?

many thanks

[pup55]

We did this awhile back. I will check the archives

http://peakoil.com/fortopic25481.html

Here is one that we did in 2006 but I think there is an even better one.

Edit:

If you click to the link of the EIA archives, you can click around on there to find some really entertaining forecasts.

I happen to particularly like this one, from the 2005 AEO, only three years ago:



which says that by 2025, the oil price will soar to the shocking price of $50 per barrel!

[Frank]

thanks Pup, I'll check these out.

[Aotearoa]

At the risk of sounding like a conspiracy theorist, can I ask if (anyone knows if) it is in EIA's charter to make realistic or even honest forecasts? Having noted the sharp contrast between EIA's forecasts and those of others like ASPO, Energy Watch Group, or the IEA, despite using the same data, I wonder whether they have a different purpose. The acronym is suspiciously similar to IEA, but then also to CIA, the erstwhile employer of its head. The name, Energy Information Administration, should perhaps be interpreted as those who administer energy information, and are selective and deliberate in who knows what.

Perhaps this is only the thinking of a non-US national, but there are plenty of reasons why the US might want to convince others that there is oil aplenty. We are not only unsure of the exact reserves, or resources, of oil-producing countries; they are unsure of each other. If they all had accurate knowledge, they might realise it was time to push up prices, secure in the knowledge that others wouldn't or even couldn't undercut them. The US has nothing to gain from OPEC, Venezuela, Nigeria, or most other oil-exporters charging more for the same oil. At the risk of misrepresenting the true state of affairs to their own populace, and a few allies who could be entrusted with the truth, the US might just have an agency whose task is to convince everyone else that oil prices can stay down for another year, and then one more.

Or is this just paranoia?

[pup55]

Hello, Aotearoam, welcome to PO.com

The Energy Information Administration (EIA), created by Congress in 1977, is a statistical agency of the U.S. Department of Energy. Our mission is to provide policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy and its interaction with the economy and the environment.

EIA

The Department of Energy Organization Act (Public Law 95-91) allows EIA's processes and products to be independent from review by Executive Branch officials; specifically Section 205(d) says:

"The Administrator shall not be required to obtain the approval of any other officer or employee of the Department in connection with the collection or analysis of any information; nor shall the Administrator be required, prior to publication, to obtain the approval of any other officer or employee of the United States with respect to the substance of any statistical or forecasting technical reports which he has prepared in accordance with law."

Here are some snippets from the EIA's "about eia" page and section about independence. It's supposed to be a non-political actvity. I believe the data gathering function that they do is quite valuable, and gives the public an abundance of data that is useful in making all sorts of business and economic decisions.

However, the notion that this organization is "independent" from the political system in any way is silly, particularly in this administration. One only need look at the justice department, which is also supposed to be independent, for an example of this. Of course, there is no accountability whatsoever, so they can put out what they want to and nothing is going to happen to them.

All of this forecasting is based on a number of fundamental assumptions, such as: the USGS survey is correct, we should believe what OPEC says about their reserves, and a few others, and so it is pretty easy, given these, to arrive at a nice sunny forecast.

The administrators of the EIA are fully aware of the PO theory, but for whatever reason, this has obviously not permeated into its public forecasts. The "official view", as determined by the bosses, cannot deviate too much from the cornucopian viewpoint, particularly in an election year.

So, until the consensus within the EIA changes, we are going to get more forecasts exactly like this one, which shows declining energy costs for the next few years, the ability to consume as much as we want, and all will be well forever.

No amount of confronting them with their old forecasts will do any good, since the accountability is all at the top level, and those people think they are immune to accountability.

It's a pity, really. People use these forecasts to do their capital budgeting and forecasting in businesses, and to have it be that far off is terrible. That is why consultants like CERA and IHS and OPIS have jobs: People no longer trust the government forecasts and want to hire someone better to give them one for real.

So, I think probably it is best to use the data for what it is, and draw whatever conclusions you can, and clearly, and not pay too much attention to the government forecasts.

[DantesPeak]

US Energy Information Administration Chief Guy Caruso at first said that speculators were driving up the price of oil by $10 to $50, but later clarified that by saying they had pushed up prices by $12 a barrel. [How did he know that?]

He also said that the price of oil would be $57 in 2016. Anyone who wants to contract to sell oil at $57 in 2016 can contact me.

US Official: Speculation Fuels Oil Price
16 minutes ago

WASHINGTON (AP) — A top Energy Department official says market speculation may be adding as much as $12 to the price of crude oil and that prices may not yet have peaked.
The head of the federal Energy Information Administration, Guy Caruso, told a Senate hearing that supply and demand would suggest a price of about $90 a barrel. Prices fluctuated around $102 a barrel Tuesday after surging to a record $104 a barrel on Monday.
Caruso told a Senate hearing that market speculation, the decline of the dollar and money moving into commodities have added to the upward pressure on crude oil prices.

AP

EIA's Caruso Suggests Speculators Having Oil-Price Effect

DOW JONES NEWSWIRES
March 4, 2008 11:02 a.m.


By Siobhan Hughes
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--The Energy Information Administration's top official on Tuesday said that speculators were having an effect on oil prices, though the effect was difficult to quantify.
"There's clearly been a surge in moneys coming in to commodities markets, including energy, which has had some upward effect on the price above the trendline," EIA Administrator Guy Caruso said in response to a question during a Senate Energy and Natural Resources Committee hearing.
"Something's clearly going on," he said. "It's difficult to say whether that number is $5 or $10," he said, but said he would "strongly disagree" that it is $50.

WSJ

EIA Projects 'Real-World Crude' At $57/Bbl In 2016

DOW JONES NEWSWIRES
March 4, 2008 10:19 a.m.


By Siobhan Hughes
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--The Energy Information Administration on Tuesday projected that the price of so-called "real-world crude" oil would decline to $57 a barrel in 2016 as expanded investment in exploration and development brings new supplies to the market.
Guy Caruso, the administrator of the EIA, provided the estimate in testimony before the Senate Energy and Natural Resources Committee.
He said that the price of natural gas would decline through 2016, also as new supplies enter the market. After 2016, he projects that real natural gas prices would rise to $6.56 per thousand cubic feet in 2030.
He also said that the consumption of biofuels would rise to 29.7 billion gallons in 2030, or about 11.3% of total motor vehicle fuel, following the enactment last year of a law that mandated more ethanol be blended into the fuel supply.

WSJ

[emersonbiggins]

I don't remember whether it was DantesPeak or perhaps Pup55 that mentioned that rampant speculation on crude futures was improbable or impossible , if only because somebody, somewhere must eventually take physical delivery of that crude, and the price they pay is set by the law of supply and demand.

Does anyone recall that conversation?