[ROCKMAN]

pstarr - Close enough. Or you could say a rich man ought a bunch of black marbles and snuck them into the bag. But then he lost his ass in tyhe stock market and stole a bunch of black marbles to save for some laterr date.

Bottom line: as the population is altered then so is the statistic.

[hvacman]

RM - WOW. A brilliantly-clear and rational concept reflecting the futility of predicting either price or available resource amount in isolation from the real-world dynamics. I hereby designate your dynamic oil resource/reserve/price interconnectedness principle the "Rockman Uncertainty Principle", the guiding principle in the post-Hubbard PO field of petro-economic-mechanics.

[aldente]

$this->bbcode_second_pass_quote('AdamB', '')$this->bbcode_second_pass_quote('aldente', 'a')pparently Mr. Hubbards rock oil shortage as predicted in the 1950's did not take place in time - leaves us all with one specific conclusion:

oil is not the remnant of "Sinclair Oil" dinosaur left over -semi plastic- indigestible somemthn` somethn..

the theory in itself is correct !

[ROCKMAN]

aldente - "...apparently Mr. Hubbards rock oil shortage as predicted in the 1950's did not take place in time..." Hubbert DID NOT predict a shortage of oil. What he predicted was the ultimate cumulative oil production of the known producing trends he used in his analysis. If you read his actual report he states that his model does not include new plays such as the shales and offshore trends. Common sense should tell one that a prediction of recover from trends not yet discovered cannot be made. Which is exactly why no one in the late 1800's (during the oil production boom in PA) could have predicted the huge oil trends in Texas (which Hubbert used in his model) simply because they had not been discovered yet.

Folks do understand that PA was the oil producing capital of the US long before Texas earned that title, right? Here's a little history of the PA oil patch:

Annual domestic output of crude swelled from 2,000 barrels in 1859, the year of Drake’s “discovery,” to 4,000,000 barrels in 1869 and 10,000,000 barrels in 1873. The ongoing industrial development of Europe spurred this rapid expansion. European, and especially British, factories began importing large quantities of cheap American oil during the 1860s. By 1866, United States petroleum exports far surpassed petroleum distributed to domestic markets and the value of these exports nearly doubled from $16 million in 1865 to $30 million in 1869. Petroleum jumped from the sixth most valuable U.S. export to the second most valuable during this period. At the peak of the oil boom, Pennsylvania wells were producing one third of the world’s oil.

Pay attention now...I don't want to have to explain it again: US oil production PEAKED in the late 1800's. And then it PEAKED again in the 1970's. And then it almost PEAKED again a couple of years ago. And no one could have predicted those moments in time decades before they happened. So again during the late 1800's no one could have predicted the US PO in the 70's because those trends had not been known at the time. Just as Hubbert was not aware of the trends that almost led to a new US PO. And as far as global PO the prolific ME oil trends weren't even fantasized about when Hubbert built his model.

Folks really need to give up this bumper sticker mentality when trying to characterize the petroleum business... It just don't work. LOL

[ROCKMAN]

Aldente - Let me address the supposed Hubbert prediction of a "rock oil shortage" more directly. In the 1950's a shortage of oil in the US was the last thing on his mind when he made his prediction of our PO in 1971. At the time of his report the US was THE global oil exporter. IOW the US was THE Saudi Arabia. In fact Texas was THE single member country of the "OPEC" of the time when Hubbert wrote his report. The Texas Rail Road Commission controlled the global price of oil via its "allowable" regulation: by law it set what percentage of a Texas oil well's production capability could actually be produced. If oil prices started the slide it would lower the allowable to restrict production and thus decrease exports. It wasn't until the 70's that the allowable was set at 100%...where it has been ever since. BTW the Texas allowable law is still in effect: the TRRC meets every month and sets the allowable for the next 30 days. If it wanted to reduce our production, let's say 30%, it has the legal authority to do so.

Why would Hubbert be thinking about a "rock oil shortage" in the US when we had so much to export that Texas could control the global price? IOW in his time the US was the only truly effective oil cartel that has ever existed. I'm pretty sure you perception that Hubbert was focused on a "rock oil shortage" came from the main stream media and others who really don't know a f*cking thing about our oil production history. LOL.

In reality a "rock oil shortage" is a difficult concept to define. This site discusses "peak oil" but how dies that relate to a "shortage"? The world is currently producing more oil the ever before in history. IOW is there a shortage today? The US consumes more oil then we produce and has since the 70's. So is there a "shortage" of oil here? But if the answer is yes then how have we EXPORTED more then 1.5 BILLION BBLS OF OIL since the 1970's? Yes: since the US "oil export ban" was passed in 1977 we've exported that much oil. Forget a "shortage" of oil when we peaked in 1971: was there a shortage of oil in almost 3 decades laterr in 1998 when the price fell to $17/bbl? Was there a shortage of oil in 2008 when it hit $146/bbl? But no shortage 6 months later when it was selling for $39/bbl?

This again emphasizes the point about the silliness of the bumper sticker mentality. Like when they include such nebulous phrases such as "oil shortage". But having made that point I still like my " Let the Yankees freeze in the dark" bumper sticker...shortage or not. LOL.

[ROCKMAN]

And speaking of what was unpredictable in the 50's those thinking the recent production uptick is from the "miracle" shale plays will be disappointed by the latest analysis from Oilprice.com:

One of the key items to our view that oil is a buy below $40 is our belief that U.S. production data has falsely compounded bearish oil market sentiment with three consecutive weeks of output gains and five straight weeks of rig increases. At first glance these numbers suggest a signal of health and happiness amongst U.S. frackers. A closer look, however, reveals that Alaska’s output rebound from June disruptions - not frackers in major shale plays - is generating the production gains in the U.S. Crude oil production in the Lower 48 states has declined for 25 straight weeks and overall U.S. output still has significant work to do before finding a bottom. According to their July Short Term Energy Outlook the EIA sees U.S. production averaging 8.6m bpd in 2016 which implies a forecast of about 8.25m bpd in 2H’16. Given the current level of U.S. production at 8.5m bpd this suggests traders should be prepared to see significant supply declines in the coming months unless the EIA is massively wrong in their short-term forecasting.

[aldente]

$this->bbcode_second_pass_quote('ROCKMAN', '
')Why would Hubbert be thinking about a "rock oil shortage" in the US when we had so much to export that Texas could control the global price? LOL.

[ROCKMAN]

Aldente - Apparently another sad case of a little bit of knowledge is more dangerous then complete ignorance. LOL.

"...because he understood the statistical mathematics of Carl Gauss' bell curve and apparently had the brains to extrapolate - the original theorem developed in the end 1700's - onto which you - Rockman - apparently still have to arrive to..."

I'll use simple words so everyone can understand. A bell shaped curve is generated by plotting a DESCRETE AND WELL DEFINED population. In Hubbert's case the population his projection was built from the known (and rather mature) US oil trends AT THAT TIME. Which is why his projection proved so accurate because no population of NEW trends were developed prior to 1971. Had the shales or Deep Water trends had been developed shortly after his report his projection of US PO date would APPEAR TO BE INCORRECT. But only to folks with limited understanding of the analysis.

If you actually read his report he specifically says his bell shaped curve DOES NOT INCLUDE yet to be developed oil trends. Trends he acknowledges might be developed some day. For instance if one looks at the US oil production curve it doesn't look at all like the classic bell shaped curve, does it? And for good reason: it is a composite of MULTIPLE BELL SHAPED CURVES of very DIFFERENT POPULATIONS. Any statistics expert will tell you that one of the most common errors is not understanding the population assumptions used to develop a stat. The technical term is data bias.

And again just so it's very clear: Hubbert's analysis, by OWN WORDS, represents the projection of only the trends that made up his POPULATION STATISTIC. IOW he bell shaped curve COULD NOT PREDICT yet to be discovered oil production from trends that WERE NOT A PORTION of his statistical model.

It's no different then a bell shaped curve one could begin plotting today for the US shale plays now that their decline side is beginning to kick in. Since this statistic does not include any yet to be discovered new oil trends it isn't able to predict future from those trends. Same reason Hubbert's model could not predict the shale or Deep Water trends.

And once more: Hubbert wasn't warning of a future oil shortage when he wrote his report in the 50's because the US was THE world's oil EXPORTER at that time. OTOH by 70's those in the oil patch, such as the Rockman's first mentor in 1975, could see the future PO problems written on the wall. Which we referred to as the "reserve replacement problem" and not PO. And for good reason: during the 25 years since Hubbert's original projection no new significant oil trends were developed. Fortunately for the US the NEW offshore GOM shelf (less then 600' water depth) oil trends were just beginning to be developed. Which is exactly why Hubbert's original bell shaped curve is obscured because a NEW bell shaped curve from a different population (offshore shelf oil) is superimposed upon the US oil production curve. An aberration seen later with the development of the GOM Deep Water oil trends. Which is exactly what we see to a much greater effect with the superimposed bell shaped curve of the NEW oil producing shale trends. And all three trends (shelf, Deep Water and shale) which were not in Hubbert's studied population and as such could not be predicted

There has never been a unified bell shaped oil production curve for US or global production and never will be: one has never been able to build a statistical model of any trend until such a trend has developed a sufficient population to analyze.

Or more simply for the logic challenged: you don't know what you don't know until you discover what you don't know. LOL. Such as US oil production is an amalgamation of different bell shaped curves and not just one population set.

[AdamB]

$this->bbcode_second_pass_quote('ROCKMAN', ' ')In Hubbert's case the population his projection was built from the known (and rather mature) US oil trends AT THAT TIME.

[AdamB]

$this->bbcode_second_pass_quote('aldente', '
')Meaning - we all made a fool of ourselves by believing in Peak Oil in the first place - the Gauss bell equation obviously stays stable but the darn parameters that were fed in the specific equation were faulty-

[AdamB]

$this->bbcode_second_pass_quote('ROCKMAN', 'A')ldente - Let me address the supposed Hubbert prediction of a "rock oil shortage" more directly. In the 1950's a shortage of oil in the US was the last thing on his mind when he made his prediction of our PO in 1971.

[aldente]

$this->bbcode_second_pass_quote('ROCKMAN', 'y')ou don't know what you don't know until you discover what you don't know.

[aldente]

seriously:

the "discrete and well defined population" analogue does not help at all in your case, Rockman.

You must have a lot at stake, meaning you are being payed for to post here, or - you are being bored.

Define the Gauss Curve in five sentences- this is my challenge.

If you manage to do so, you shall be free of this accusation.

(I'll define the curve upon request - in five sentences)

Your turn!

[ROCKMAN]

In probability theory, the normal (or Gaussian) distribution is a very common continuous probability distribution. The normal distribution is a subclass of the elliptical distributions. The normal distribution is symmetric about its mean.

There you go...needed only three. LOL. And does a good job of explaining how the term "bell-shaped curve" is misused since a symetrtical curve of natural data is rarely symmetric. Especially in the world of hydrocarbon reservoir size and production rates. Not sure if tghat addresses your issues since you really didn't make it clear what they might be.

[aldente]

$this->bbcode_second_pass_quote('ROCKMAN', 'I')n probability theory, the normal (or Gaussian) distribution is a very common continuous probability distribution. The normal distribution is a subclass of the elliptical distributions. The normal distribution is symmetric about its mean.

There you go...needed only three. LOL. And does a good job of explaining how the term "bell-shaped curve" is misused since a symetrtical curve of natural data is rarely symmetric. Especially in the world of hydrocarbon reservoir size and production rates. Not sure if tghat addresses your issues since you really didn't make it clear what they might be.

[aldente]

why did Peak Oil not occur as projected

Answer: Carl Gauss, the youngster in Germany ( 1780's or so) did introduce "reason" .

all form of statistics are based on the Gauss curve (Normalverteilung)

since there is no effect of PO there must be a flaw in the base parameters - certainly not in the math!

Oil - not based on dinosaur remains ? Rock oil - not the reason for prohibition in the US of A ??

[aldente]

you guys must be based back East,
All chibberish to me what you write.
Over here in Los Angeles the situation is critical but not stupid !

[aldente]

Rockman - there is darn magic in the "normal distribution" bell curve -all government derives its authority from statistics, So please do not act as if you "have got it all down" - a-hole !

[aldente]

I like you anyways