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Power lines in California. Photo: George Rose / Getty Images

Oil, gas and electricity markets in the U.S. showed more yearly volatility and proved tougher for Energy Department analysts to predict from 2005 to 2014 compared to preceding decades, new research published in the journal Nature Energy shows.

Why it matters: The results underscore the challenges facing policymakers, and companies making investment decisions that "influence the cost, and environmental and health impacts of the US energy system for decades," the paper states.

  • "Understanding historical changes in the projected and actual values of key energy quantities can help decision-makers create robust strategies for a deeply uncertain future," write the three Carnegie Mellon University authors.
  • "This turbulence may or may not continue. However, this analysis should serve as a stark reminder of the importance of considering the possibility of further surprises when planning for the future," they conclude.

What they did: The paper explores decades of U.S. data on prices, production and use of oil, gas and coal; electricity prices and demand; transportation fuels and more, totaling 17 separate categories.

  • Their analyses looked at two types of "extreme" changes in these categories. One was the largest cases of year-over-year volatility. The other was the biggest misses in annual Energy Information Administration long-term outlooks — in which the errors were outside of the 95 percent range of prior errors for a given topic.

What they found: "Both volatility and unpredictability have increased in the past decade, compared to the three and two decades before it."

  • In terms of volatility, data since the mid-20th century shows there were nine extreme changes between 2005 and 2014, compared to just seven from 1975 to 2004.
  • On the unpredictability front, 2005-2014 showed major forecasting errors that included over-projections of coal production; under-projections of oil production toward the end of the study period; and over-projection of total electricity sales.

To be sure: Some of the findings can be traced to a single, if broad, seismic change — the oil and gas fracking boom over the last decade. It has, for instance, led to much more production than forecast as well as much lower natural gas prices. And the 2007-2008 financial crisis also shook things up.

  • But that's not enough to explain the results. "[H]igh concentrations of extreme errors begin before both the massive expansion of hydraulic fracturing and the great recession," the authors write.

Their bottom line: "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 paper's authors are Inês Azevedo, a professor of engineering and public policy; Evan Sherwin, a grad student in that program; and Max Henrion, the CEO of Lumina Decision Systems who is also an adjunct professor at Carnegie Mellon.

Go deeper

UN poll: Most see climate change as global emergency during pandemic

Swedish climate activist Greta Thunberg (C) fronts a Fridays For Future protest at the Swedish Parliament in Stockholm in September. Photo: Jonathan Nacksrtrand/AFP via Getty Images

64% of people from around the world say climate change is a global emergency, a United Nations poll published Wednesday finds.

Why it matters: It's the biggest global survey on climate change ever conducted, with some 1.2 million participants from 50 countries — including the U.S., where 65% of those surveyed view climate change as an emergency.

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

How cutting GOP corporate cash could backfire

Illustration: Aïda Amer/Axios

Companies pulling back on political donations, particularly to members of Congress who voted against certifying President Biden's election win, could inadvertently push Republicans to embrace their party's rightward fringe.

Why it matters: Scores of corporate PACs have paused, scaled back or entirely abandoned their political giving programs. While designed to distance those companies from events that coincided with this month's deadly siege on the U.S. Capitol, research suggests the moves could actually empower the far-right.