The sequester hits home for Energy Policy researchers

By now, everyone is probably thankful that the sequester is no longer on the front page of every media outlet in the U.S. Out of sight is, after all, out of mind. Unfortunately, the impacts of government action are often not felt until months or years after the votes have been cast. One action that flew under the radar of anyone not in the energy policy field is the suspension of the U.S. Department of Energy’s Annual Energy Outlook. The AEO was the definitive source for numbers on energy consumption, prices, trading and carbon emissions in the U.S. Compiling the AEO was not a supremely expensive affair, the numbers are generally collected as a matter of routine business in the U.S., you just need someone to collect them, make sure there aren’t any obvious errors and curate them into a standard format. Still, the cost was high enough that it was eliminated in sequester-related cuts.

This is a real problematic loss for energy researchers, particularly those who don’t have a ton of institutional resources behind them. Half of research, or more, is finding the data you need and compiling it into a form that’s amenable to the type of tools at your disposal. Taking available numbers from a variety of agencies and turning them into a useful dataset isn’t an impossible task, just a time-consuming one. The AEO put decades of U.S. energy information at a researchers fingertips and, more importantly, standardized it into one form with one set of measurement assumptions. For example, if a researcher five years from now wanted to test a new method for modelling natural gas markets, they might go to the AEO for data from 1990-2013, but then some other source for 2013-2018. The post-AEO data might measure prices in a slightly different way (price at the well-head instead of price at delivery) or use a different assumption on the energy content of the gas (not all natural gas is the same). The researcher would have to figure out the measurement assumptions of each report (which are usually not as transparent as one would think) and then manually correct them.

This may not sound like much, but having spent a ton of time doing similar research, you often find that research projects get bogged down in data collection and relatively simple questions go unanswered because it would take too long to find the data and there are other deadlines looming. Having a comprehensive and consistent data source like the AEO is invaluable for anyone who wants to understand energy markets. This is a prime example of penny-wise, pound-foolish behaviour.   (h/t to Adam H. Goldstein for the original post on this)


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