Exploring Hydrocarbon Depletion
Page added on December 15, 2016
Every year, the U.S. Department of Energy’s Energy Information Administration (EIA), publishes its Annual Energy Outlook (AEO) in which U.S. energy supply is forecast through 2040. 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.
In 2014, Earth Scientist David Hughes took a hard look at the EIA’s existing forecasts in a groundbreaking report, Drilling Deeper, and found that its projections for future production and prices suffered from a troubling degree of optimism. He followed this analysis the next year with 2015 Tight Oil Reality Check and 2015 Shale Gas Reality Check, with the same trends in highly overstated forecasts from the EIA continuing.
In September 2016, the EIA released its Annual Energy Outlook 2016. We were very interested in how lower prices and declining production influenced the EIA’s projections. David Hughes applied the same scrutiny to AEO2016 as he has in the past to assess the AEO2016 against both Drilling Deeper and up-to-date production data from key tight oil plays.
Questions for the EIA
After closely reviewing the AEO2016, David Hughes raises some important questions about EIA’s U.S. tight oil forecasts, such as:
Hughes’ recent findings point to not only increasingly overstated forecasts by the EIA, but also increasingly volatile assessments – both of which are highly troubling. As the pro-fracking Trump Administration sets its domestic energy policy, addressing the serious doubt this discovery raises now is critical. It’s more important than ever to have an independent Energy Information Administration that is providing grounded, realistic, and transparent analysis.
Oil well image via shutterstock. Reproduced on Resilience.org with permission.