Abstract
How well do our energy models answer our questions -- do they provide frameworks to analyze our energy challenges? What price, how much supply/demand imbalance, and where should we invest? Over the past fifty years, our energy models have evolved and become more sophisticated, however, the question remains, how well have they predicted prices and answered our changing energy (and climate) challenges?
In this slide podcast, I will briefly describe five energy models that have attempted to answer different questions at different points in time.
Hoteling and Hubbert: resource supply curve and decline/peaks
Adelman and oligopoly market structure: influence and impact of major players
Partial and general equilibrium: regional supply mix, market demand, and supply chains
VAR, price volatility, and complex oil market: supply and demand surprises with swing producers
Heterogeneous energy markets: Agent actions/behavior, game theory strategies
Of course, along with these models/frameworks, we have market analysts trying to pick the winning players. Looking back we know that none of these models have been able to fully capture the boom-bust cycles of our energy markets, nor predict prices in two to three years. Nonetheless, over the past fifty years, our models have been able to suggest new approaches. They have framed our thinking and helped some plan/invest in our changing energy landscape.