The energy market in the United States has become increasingly unpredictable and volatile in recent decades — posing a challenge to lawmakers and companies faced with making policy and investment decisions that “influence the cost” and “environmental and health impacts of the U.S. energy system for decades,” according to a new study published in the journal Nature Energy.
The study’s authors, energy and policy experts at Carnegie Mellon University, examined data on U.S. electricity prices and demand, production and costs of oil, gas, and coal, transportation, and more than a dozen other energy-related trends from 1952 to 2015.
They compared the accuracy of forecasts by groups like the U.S. Energy Information Administration against actual energy trends, finding that annual forecasts have become increasingly wrong in the last decade. This is in part due to the 2007-2008 financial crisis, as well as to the hydraulic fracturing, or fracking, boom that has boosted U.S. oil and gas production and lowered energy costs. In addition, Americans started driving fewer miles, industrial energy consumption declined, and energy efficiency increased.
They did not look at how the increase in renewable energy, or the Paris Climate Agreement and international climate policy, affected the U.S. energy market.
“The observed increase in the volatility and unpredictability of key energy-related quantities may suggest complex structural shifts in the U.S. and world economies and energy systems,” the study says.