IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v165y2018ipbp1320-1331.html
   My bibliography  Save this article

A novel hybridization of nonlinear grey model and linear ARIMA residual correction for forecasting U.S. shale oil production

Author

Listed:
  • Wang, Qiang
  • Song, Xiaoxing
  • Li, Rongrong

Abstract

Given that the booming U.S. shale oil has reshaped the global oil landscape, better forecasting output of U.S. shale oil can facilitate to better understanding the global oil trend. To more accurately forecasting U.S. shale oil production, we hybridize the nonlinear- and linear-forecasting model to a new forecasting technique in two step: (i) combining a nonlinear grey model with the mentalism idea to develop nonlinear metabolism grey model (NMGM), (ii) combining the proposed NMGM with Auto Regressive Integrated Moving Average (ARIMA) to develop NMGM-ARIMA technique. The sliding validation experiments with the previous U.S. shale oil quarterly output dataset of 2003–2008 and 2008–2013 are adopted to verify the feasibility of the proposed NMGM-ARIMA technique. The empirical results show that this novel NMGM-ARIMA technique can significantly improve forecasting effectiveness and outperform other related four forecasting models. We therefore believe that the proposed forecasting technique can service researchers, policymaker, analysists and others stakeholders to more timely and accurately forecasting U.S. shale oil output and thus better understanding global oil market.

Suggested Citation

  • Wang, Qiang & Song, Xiaoxing & Li, Rongrong, 2018. "A novel hybridization of nonlinear grey model and linear ARIMA residual correction for forecasting U.S. shale oil production," Energy, Elsevier, vol. 165(PB), pages 1320-1331.
    • Handle: RePEc:eee:energy:v:165:y:2018:i:pb:p:1320-1331
    DOI: 10.1016/j.energy.2018.10.032
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544218320206
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2018.10.032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lutz Kilian, 2016. "The Impact of the Shale Oil Revolution on U.S. Oil and Gasoline Prices," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 185-205.
    2. Wang, Qiang & Li, Rongrong, 2017. "Research status of shale gas: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 715-720.
    3. Zeng, Bo & Li, Chuan, 2016. "Forecasting the natural gas demand in China using a self-adapting intelligent grey model," Energy, Elsevier, vol. 112(C), pages 810-825.
    4. Zhao, Huiru & Guo, Sen, 2016. "An optimized grey model for annual power load forecasting," Energy, Elsevier, vol. 107(C), pages 272-286.
    5. Zhao, Weigang & Wei, Yi-Ming & Su, Zhongyue, 2016. "One day ahead wind speed forecasting: A resampling-based approach," Applied Energy, Elsevier, vol. 178(C), pages 886-901.
    6. Wang, Qiang & Chen, Xi & Jha, Awadhesh N. & Rogers, Howard, 2014. "Natural gas from shale formation – The evolution, evidences and challenges of shale gas revolution in United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 1-28.
    7. Kumar, Ujjwal & Jain, V.K., 2010. "Time series models (Grey-Markov, Grey Model with rolling mechanism and singular spectrum analysis) to forecast energy consumption in India," Energy, Elsevier, vol. 35(4), pages 1709-1716.
    8. Ma, Weimin & Zhu, Xiaoxi & Wang, Miaomiao, 2013. "Forecasting iron ore import and consumption of China using grey model optimized by particle swarm optimization algorithm," Resources Policy, Elsevier, vol. 38(4), pages 613-620.
    9. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2018. "China's dependency on foreign oil will exceed 80% by 2030: Developing a novel NMGM-ARIMA to forecast China's foreign oil dependence from two dimensions," Energy, Elsevier, vol. 163(C), pages 151-167.
    10. Chen, Lin & Lin, Weilong & Li, Junzi & Tian, Binbin & Pan, Haihong, 2016. "Prediction of lithium-ion battery capacity with metabolic grey model," Energy, Elsevier, vol. 106(C), pages 662-672.
    11. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2018. "Forecasting energy demand in China and India: Using single-linear, hybrid-linear, and non-linear time series forecast techniques," Energy, Elsevier, vol. 161(C), pages 821-831.
    12. Shuyu Li & Rongrong Li, 2017. "Comparison of Forecasting Energy Consumption in Shandong, China Using the ARIMA Model, GM Model, and ARIMA-GM Model," Sustainability, MDPI, vol. 9(7), pages 1-19, July.
    13. Barzin, Reza & Chen, John J.J. & Young, Brent R. & Farid, Mohammed M, 2016. "Application of weather forecast in conjunction with price-based method for PCM solar passive buildings – An experimental study," Applied Energy, Elsevier, vol. 163(C), pages 9-18.
    14. Li, Song & Goel, Lalit & Wang, Peng, 2016. "An ensemble approach for short-term load forecasting by extreme learning machine," Applied Energy, Elsevier, vol. 170(C), pages 22-29.
    15. Wang, Jianzhou & Jiang, Haiyan & Zhou, Qingping & Wu, Jie & Qin, Shanshan, 2016. "China’s natural gas production and consumption analysis based on the multicycle Hubbert model and rolling Grey model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1149-1167.
    16. Ghasemi, A. & Shayeghi, H. & Moradzadeh, M. & Nooshyar, M., 2016. "A novel hybrid algorithm for electricity price and load forecasting in smart grids with demand-side management," Applied Energy, Elsevier, vol. 177(C), pages 40-59.
    17. Lee, Yi-Shian & Tong, Lee-Ing, 2012. "Forecasting nonlinear time series of energy consumption using a hybrid dynamic model," Applied Energy, Elsevier, vol. 94(C), pages 251-256.
    18. J. David Hughes, 2013. "A reality check on the shale revolution," Nature, Nature, vol. 494(7437), pages 307-308, February.
    19. Liu, Liwei & Zong, Haijing & Zhao, Erdong & Chen, Chuxiang & Wang, Jianzhou, 2014. "Can China realize its carbon emission reduction goal in 2020: From the perspective of thermal power development," Applied Energy, Elsevier, vol. 124(C), pages 199-212.
    20. Yuan, Chaoqing & Liu, Sifeng & Fang, Zhigeng, 2016. "Comparison of China's primary energy consumption forecasting by using ARIMA (the autoregressive integrated moving average) model and GM(1,1) model," Energy, Elsevier, vol. 100(C), pages 384-390.
    21. Lusis, Peter & Khalilpour, Kaveh Rajab & Andrew, Lachlan & Liebman, Ariel, 2017. "Short-term residential load forecasting: Impact of calendar effects and forecast granularity," Applied Energy, Elsevier, vol. 205(C), pages 654-669.
    22. Wang, Qiang & Li, Rongrong, 2016. "Natural gas from shale formation: A research profile," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1-6.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Yong & Yang, Zhongsen & Wang, Li & Ma, Xin & Wu, Wenqing & Ye, Lingling & Zhou, Ying & Luo, Yongxian, 2022. "Forecasting China's energy production and consumption based on a novel structural adaptive Caputo fractional grey prediction model," Energy, Elsevier, vol. 259(C).
    2. Wang, Enze & Li, Changrong & Feng, Yue & Song, Yanchen & Guo, Tonglou & Li, Maowen & Chen, Zhuoheng, 2022. "Novel method for determining the oil moveable threshold and an innovative model for evaluating the oil content in shales," Energy, Elsevier, vol. 239(PA).
    3. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2019. "Will Trump's coal revival plan work? - Comparison of results based on the optimal combined forecasting technique and an extended IPAT forecasting technique," Energy, Elsevier, vol. 169(C), pages 762-775.
    4. Shuyu Li & Xuan Yang & Rongrong Li, 2019. "Forecasting Coal Consumption in India by 2030: Using Linear Modified Linear (MGM-ARIMA) and Linear Modified Nonlinear (BP-ARIMA) Combined Models," Sustainability, MDPI, vol. 11(3), pages 1-19, January.
    5. Wang, Qiang & Zhan, Lina, 2019. "Assessing the sustainability of the shale gas industry by combining DPSIRM model and RAGA-PP techniques: An empirical analysis of Sichuan and Chongqing, China," Energy, Elsevier, vol. 176(C), pages 353-364.
    6. Peng, Cheng & Chen, Heng & Lin, Chaoran & Guo, Shuang & Yang, Zhi & Chen, Ke, 2021. "A framework for evaluating energy security in China: Empirical analysis of forecasting and assessment based on energy consumption," Energy, Elsevier, vol. 234(C).
    7. Ding, Song & Tao, Zui & Zhang, Huahan & Li, Yao, 2022. "Forecasting nuclear energy consumption in China and America: An optimized structure-adaptative grey model," Energy, Elsevier, vol. 239(PA).
    8. Zhou, Wei & Li, Xiangchengzhen & Qi, ZhongLi & Zhao, HaiHang & Yi, Jun, 2024. "A shale gas production prediction model based on masked convolutional neural network," Applied Energy, Elsevier, vol. 353(PA).
    9. Wen, Kai & Jiao, Jianfeng & Zhao, Kang & Yin, Xiong & Liu, Yuan & Gong, Jing & Li, Cuicui & Hong, Bingyuan, 2023. "Rapid transient operation control method of natural gas pipeline networks based on user demand prediction," Energy, Elsevier, vol. 264(C).
    10. Jiang, Hongyan & Cheng, Feng & Wu, Cong & Fang, Dianjun & Zeng, Yuhai, 2024. "A multi-period-sequential-index combination method for short-term prediction of small sample data," Reliability Engineering and System Safety, Elsevier, vol. 242(C).
    11. Niu, Hongli & Xu, Kunliang & Liu, Cheng, 2021. "A decomposition-ensemble model with regrouping method and attention-based gated recurrent unit network for energy price prediction," Energy, Elsevier, vol. 231(C).
    12. Ding, Song & Li, Ruojin & Wu, Shu & Zhou, Weijie, 2021. "Application of a novel structure-adaptative grey model with adjustable time power item for nuclear energy consumption forecasting," Applied Energy, Elsevier, vol. 298(C).
    13. Zhineng Hu & Jing Ma & Liangwei Yang & Liming Yao & Meng Pang, 2019. "Monthly electricity demand forecasting using empirical mode decomposition-based state space model," Energy & Environment, , vol. 30(7), pages 1236-1254, November.
    14. Yeqi An & Yulin Zhou & Rongrong Li, 2019. "Forecasting India’s Electricity Demand Using a Range of Probabilistic Methods," Energies, MDPI, vol. 12(13), pages 1-24, July.
    15. Lili Wang & Lina Zhan & Rongrong Li, 2019. "Prediction of the Energy Demand Trend in Middle Africa—A Comparison of MGM, MECM, ARIMA and BP Models," Sustainability, MDPI, vol. 11(8), pages 1-16, April.
    16. Yang, Run & Liu, Xiangui & Yu, Rongze & Hu, Zhiming & Duan, Xianggang, 2022. "Long short-term memory suggests a model for predicting shale gas production," Applied Energy, Elsevier, vol. 322(C).
    17. Xu, Ning & Ding, Song & Gong, Yande & Bai, Ju, 2019. "Forecasting Chinese greenhouse gas emissions from energy consumption using a novel grey rolling model," Energy, Elsevier, vol. 175(C), pages 218-227.
    18. Xinyu Han & Rongrong Li, 2019. "Comparison of Forecasting Energy Consumption in East Africa Using the MGM, NMGM, MGM-ARIMA, and NMGM-ARIMA Model," Energies, MDPI, vol. 12(17), pages 1-24, August.
    19. Pan, Shaowei & Yang, Bo & Wang, Shukai & Guo, Zhi & Wang, Lin & Liu, Jinhua & Wu, Siyu, 2023. "Oil well production prediction based on CNN-LSTM model with self-attention mechanism," Energy, Elsevier, vol. 284(C).
    20. E, Jianwei & Ye, Jimin & He, Lulu & Jin, Haihong, 2019. "Energy price prediction based on independent component analysis and gated recurrent unit neural network," Energy, Elsevier, vol. 189(C).
    21. Wang, Qiang & Song, Xiaoxin, 2019. "Forecasting China's oil consumption: A comparison of novel nonlinear-dynamic grey model (GM), linear GM, nonlinear GM and metabolism GM," Energy, Elsevier, vol. 183(C), pages 160-171.
    22. Bouteska, Ahmed & Hajek, Petr & Fisher, Ben & Abedin, Mohammad Zoynul, 2023. "Nonlinearity in forecasting energy commodity prices: Evidence from a focused time-delayed neural network," Research in International Business and Finance, Elsevier, vol. 64(C).
    23. Wang, Qiang & Jiang, Feng, 2019. "Integrating linear and nonlinear forecasting techniques based on grey theory and artificial intelligence to forecast shale gas monthly production in Pennsylvania and Texas of the United States," Energy, Elsevier, vol. 178(C), pages 781-803.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Qiang & Song, Xiaoxin, 2019. "Forecasting China's oil consumption: A comparison of novel nonlinear-dynamic grey model (GM), linear GM, nonlinear GM and metabolism GM," Energy, Elsevier, vol. 183(C), pages 160-171.
    2. Wang, Qiang & Jiang, Feng, 2019. "Integrating linear and nonlinear forecasting techniques based on grey theory and artificial intelligence to forecast shale gas monthly production in Pennsylvania and Texas of the United States," Energy, Elsevier, vol. 178(C), pages 781-803.
    3. Wang, Qiang & Li, Shuyu & Li, Rongrong & Ma, Minglu, 2018. "Forecasting U.S. shale gas monthly production using a hybrid ARIMA and metabolic nonlinear grey model," Energy, Elsevier, vol. 160(C), pages 378-387.
    4. Wenting Zhao & Juanjuan Zhao & Xilong Yao & Zhixin Jin & Pan Wang, 2019. "A Novel Adaptive Intelligent Ensemble Model for Forecasting Primary Energy Demand," Energies, MDPI, vol. 12(7), pages 1-28, April.
    5. Minglu Ma & Zhuangzhuang Wang, 2019. "Prediction of the Energy Consumption Variation Trend in South Africa based on ARIMA, NGM and NGM-ARIMA Models," Energies, MDPI, vol. 13(1), pages 1-15, December.
    6. Ding, Song, 2018. "A novel self-adapting intelligent grey model for forecasting China's natural-gas demand," Energy, Elsevier, vol. 162(C), pages 393-407.
    7. Lili Wang & Lina Zhan & Rongrong Li, 2019. "Prediction of the Energy Demand Trend in Middle Africa—A Comparison of MGM, MECM, ARIMA and BP Models," Sustainability, MDPI, vol. 11(8), pages 1-16, April.
    8. Yuqi Dong & Xuejiao Ma & Chenchen Ma & Jianzhou Wang, 2016. "Research and Application of a Hybrid Forecasting Model Based on Data Decomposition for Electrical Load Forecasting," Energies, MDPI, vol. 9(12), pages 1-30, December.
    9. Shuyu Li & Rongrong Li, 2019. "Evaluating Energy Sustainability Using the Pressure-State-Response and Improved Matter-Element Extension Models: Case Study of China," Sustainability, MDPI, vol. 11(1), pages 1-20, January.
    10. Qian, Wuyong & Wang, Jue, 2020. "An improved seasonal GM(1,1) model based on the HP filter for forecasting wind power generation in China," Energy, Elsevier, vol. 209(C).
    11. Rongrong Li & Min Su, 2017. "The Role of Natural Gas and Renewable Energy in Curbing Carbon Emission: Case Study of the United States," Sustainability, MDPI, vol. 9(4), pages 1-18, April.
    12. Shuyu Li & Rongrong Li, 2017. "Comparison of Forecasting Energy Consumption in Shandong, China Using the ARIMA Model, GM Model, and ARIMA-GM Model," Sustainability, MDPI, vol. 9(7), pages 1-19, July.
    13. Huang, Liqiao & Liao, Qi & Qiu, Rui & Liang, Yongtu & Long, Yin, 2021. "Prediction-based analysis on power consumption gap under long-term emergency: A case in China under COVID-19," Applied Energy, Elsevier, vol. 283(C).
    14. Xue-Ting Jiang & Rongrong Li, 2017. "Decoupling and Decomposition Analysis of Carbon Emissions from Electric Output in the United States," Sustainability, MDPI, vol. 9(6), pages 1-13, May.
    15. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2018. "China's dependency on foreign oil will exceed 80% by 2030: Developing a novel NMGM-ARIMA to forecast China's foreign oil dependence from two dimensions," Energy, Elsevier, vol. 163(C), pages 151-167.
    16. Sharafian, Amir & Talebian, Hoda & Blomerus, Paul & Herrera, Omar & Mérida, Walter, 2017. "A review of liquefied natural gas refueling station designs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 503-513.
    17. Rao, Congjun & Zhang, Yue & Wen, Jianghui & Xiao, Xinping & Goh, Mark, 2023. "Energy demand forecasting in China: A support vector regression-compositional data second exponential smoothing model," Energy, Elsevier, vol. 263(PC).
    18. Xinyu Han & Rongrong Li, 2019. "Comparison of Forecasting Energy Consumption in East Africa Using the MGM, NMGM, MGM-ARIMA, and NMGM-ARIMA Model," Energies, MDPI, vol. 12(17), pages 1-24, August.
    19. Rongrong Li & Xue-Ting Jiang, 2017. "Inequality of Carbon Intensity: Empirical Analysis of China 2000–2014," Sustainability, MDPI, vol. 9(5), pages 1-12, April.
    20. Zhineng Hu & Jing Ma & Liangwei Yang & Liming Yao & Meng Pang, 2019. "Monthly electricity demand forecasting using empirical mode decomposition-based state space model," Energy & Environment, , vol. 30(7), pages 1236-1254, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:165:y:2018:i:pb:p:1320-1331. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.