Consumer Energy Report is now Energy Trends Insider -- Read More »

By Robert Rapier on Aug 13, 2012 with 4 responses

How to Acquire Accurate Energy Data and Statistics

Note: I am back in Hawaii after a long road trip, so my posting frequency will return to normal. I intend to record new R-Squared Energy TVs in the near future as well.

In last week’s Energy Trends Insider our featured stories were How to Acquire Accurate Energy Data and StatisticsInvestment Opportunities in Indian Energy Infrastructure, and a Subscriber Question on Cheap Natural Gas — A Threat to Chemical and Biofuels Producers. As we have done previously, we would like to share one of those stories with regular readers of this column. Interested readers can find more information on the newsletter and subscribe at Energy Trends Insider.

How to Acquire Accurate Energy Data and Statistics

Making good investment decisions requires access to timely, reliable data. There are a number of good sources of data, each with particular strengths and weaknesses. Here I discuss three that I frequently use.

The Energy Information Administration (EIA) is the statistical agency of the U.S. Department of Energy (DOE). They have been providing data and forecasts since they were established in 1977. They have about 370 federal employees and their 2012 budget is $105 million. Popular products from the EIA include This Week in Petroleum (something I read every week), Short and Long Term Energy Outlooks, Annual Energy Outlooks, numerous weekly reports on inventories, pricing, refinery utilization, etc. Their reports have the ability to move markets, and their data — particularly around U.S. energy consumption — is timely and hard to beat.

In recent years the EIA reported on a significant amount of international data as well, and I did use them for information on oil production in other countries. However, in 2011 budget cuts forced them to scale back some of their offerings, including data on international production and consumption. One casualty for 2012 was the International Energy Outlook, although they indicate that it will be published in 2013.

In recent years, the biggest weakness of the EIA has been their forecasts. If you look back at the energy outlooks from 5 or 10 years ago, you will find that they are consistently too optimistic. They overestimated oil production and underestimated oil prices by a large amount. Sometimes you see them adapting their answers to politics. For example, in 2007 EIA Administrator Guy Caruso testified before Congress that he did not see even 1 billion gallons of cellulosic ethanol being produced by 2030. When it was pointed out that this was in direct contrast to what President Bush thought about the matter, he did some backtracking on the issue. Following his testimony, future reports from the EIA were much more bullish on the topic of cellulosic ethanol.

As a result of the EIA cutbacks, a better source of international energy statistics is the International Energy Agency (IEA). The IEA is based in Paris, and their mission is to “ensure reliable, affordable and clean energy for its 28 member countries and beyond.” Some would argue that it was always a better source of international data than the EIA, but some of the IEA’s more useful publications are only available for purchase (in contrast to EIA publications). Others, such as their very useful Oil Market Report which tracks global oil supply and demand, are available for free after a two-week delay.

One data source that I eagerly anticipate each year is the annual BP Statistical Review. This report is less useful than EIA and IEA offerings for investors looking to make decisions on breaking data, but it is invaluable in helping to provide a big picture understanding of trends in the energy sector.

BP’s report covers global, regional, and in many cases country-specific energy production and consumption data for oil, gas, coal, nuclear power, and a wide range of renewables. As an example of how I use this data, you can refer to one of the five recent articles I published on the basis of BP’s recently-released 2012 report (e.g., Renewable Energy Facts and Figures).

Access to reliable data is crucial for investors, and these three sources are but a sampling of many sources that I utilize. But in my opinion they are three of the more important sources of energy information, and active investors in the energy sector should familiarize themselves with their offerings.

Link to Original Article: How to Acquire Accurate Energy Data and Statistics

By Robert Rapier

  1. By Ian on August 14, 2012 at 11:11 am

    Mr. Rapier,

    Do you have any reliable online sources for information about EROEI for oil, gas or coal over time? 

    Regards,

    Ian

    [link]      
    • By Robert Rapier on August 14, 2012 at 12:46 pm

      Ian, I am not sure about coal or natural gas, but quite a bit has been published about oil’s EROEI, as well as that of oil sands. I also have a paper somewhere that discusses the EROEI of just the refining step. That ranges from 8 to 1 to about 12 to 1, and I can confirm that is accurate from my work in a refinery. The EROEI of oil itself has declined over the years, and still varies greatly. But I think Charles Hall’s paper said that the EROEI 100 years ago was 100 to 1, and now the global average is 17 to 1. The EROEI of oil sands is in the 6/1 range I believe. 

      I could dig all of these references up if you really need, but it would be a few days. I am pressed for time just now.

      [link]      
  2. By Benjamin Cole on August 15, 2012 at 12:11 am

    In his modesty, RR forgot to mention the key source for energy information: R Squared.

    I second RR on all these sources of information, and I also especially love the BP report.  The trend for oil consumption in Europe and Japan, going back 30 years, are remarkable. (Going down the whole time, btw).

     

    BTW, RR recently posted he thought we had reached some sort of breakpoint in oil prices, and oil prices may not be higher in five years than today.  This may the the most important observation made by anyone in the energy sector in the last several years. 

    Also, there are meaningful improvements coming down the pike in lithium batteries. 

    The future could be both more prosperous and cleaner than some thought only a few years back.

     

     

    [link]      
  3. By ben on August 15, 2012 at 9:35 am

    Tend to agree with the other Benjamin about the future looking more promising than the doom & gloom crowd’s prognosis.  Yet, the specter of RR’s ”Long Recession” are not easily dismissd out of hand without some evidence of improvement bearing on energy supply/demand dynamics.   I’m mindful that high energy prices will enhance prospects for continued progress on alternative sources AND conservation (very much under-appreciated).  

     I can’t say that I recall RR’s prediction that oil prices won’t be higher in five years–I suspect he thinks they’ll experience upward pressure given supply constraints and unyielding demand principally out of Asia in the absence of global recession.   One might make even make a reasoned argument for sustainable increases, as they support steady improvement in rebalancing supply and demand while aiming toward a more sensible strategy for enhancing regional energy security arrangements.  On that note, North America may find itself on a more favorable path, if we embrace policymaking that resists the “Just Say No” crowd who are bent on eliminating the use of fossil fuels regardless of economic consequences–something that is ill-advised and will surely prove counter-productive to environmental protection.    

    I’ve been reading Prof. Hall’s recent contribution to the debate about energy economics.  I can’t say that there’s a whole lot of revelation in some of the methodological repackaging of economic calculation, but the emphasis on EROI is never unwelcome and, to the contrary, is something that will prove the primary driver for energy policy and executive decsion-making in the days ahead.  So, on that note, Dr. Hall would appear to offer some contribution to a constructive focus worthy of our collective efforts.  We surely need plenty of that, eh.

    Ben

     

     

     

     

     

      

    [link]      
Register or log in now to save your comments and get priority moderation!