This article will explain how data analysis and modeling can be used in planning in the volatile environment in which the energy industries currently operate. The discussion will be quantitative and systematic in terms of trying to integrate the various components of the energy picture, i.e., OPEC supply and demand in developed and developing countries.
In this discussion we will use oil price forecasting as an interesting lens from which to view this process of using data analysis to analyze important issues. There are many diverse opinions regarding the oil price trend over the next decade. The energy modeling theory presented here has as a basic premise that much can be learned from comparing different projections.
Ideas on how industry can utilize analysis by using a scenario approach will be presented. In addition, this article will illustrate how to incorporate and quantify uncertainty in the planning process.
Reprinted in 1985 from Petroleum Management, Vol. 7, No. 7, July 1985, pp 35-37