There is growing uncertainty in energy sector growth forecasts

7 december 2018

In the latest energy bulletin, the Analytical Center experts reviewed the new autumn set of forecasts regarding the global energy sector which suggests the mood in the forecasting community is changing.
The authors of the bulletin write that consumption of energy resources is projected to grow until 2040 (by about 25-35% over the 2016 level).

These assessments co-exist with pretty radical scenarios in the EU where they envision drastic cuts to the fuel consumption, on the one hand, and the obviously higher than expected resistance of coal in the energy balances of China and India, on the other hand.

The oil processing state policy in Russia aims at solving a number of problems that are quite complex and have cross-effect making forecasting an extremely difficult task, the Analytical Center experts conclude. In the long term, the goals for keeping the population supplied with fuel and improving environmental standards must go hand in hand with keeping the prices at a level that consumers can handle while also meeting the country's fiscal interests. The set of methods and tools used must be revised when oil prices change significantly: there is no such thing as a mechanism or method that can work in any situation. Meanwhile, the more manual mode management is used, the more uncertainty there is for investment projects.

Digitization is slowly but surely getting traction in oil and gas. There is no doubt that the introduction of digital technologies will expand the capabilities of the economy and boost its efficiency.

The experts are, however, concerned by how soon industry expects to see digital technologies generate huge revenues. In addition, forecasting revenue from digitization by simply multiplying local savings by all the projects around the world seem optimistic only if ignoring the required investments amount, the experimental character of available digitization technologies, and difficult management in this field.

For more, see the energy bulletin "New Energy Forecasts".

For other issues of the Energy Bulletin, see Publications.