by WebHubbleTelescope » Sun 22 Jan 2006, 22:40:33
$this->bbcode_second_pass_quote('ReserveGrowthRulz', '
')"Attanasi, E.D., and Root, D.H., 1994, The enigma of oil and gas field growth: American Association of Petroleum Geologists Bulletin, v. 78, no. 3, p. 321-332."
Note the above paper. The authors are from the USGS. I am about to do a complete deconstruction of the paper based on my knowledge of how people can misuse statistical methods.
First of all, the authors put the following curve front and center. This shows how "reserve growth" mutiplies from an initial estimate to some huge correction that seems absurd on the face of it. But 15X ?
Second, the estimates only start in the year 1977, so all the data points prior to this are extrapolations (for example, when they go back anywhere from 20 to 90 years, no discovery estimates are supplied for that year).
Third, the data that they extrapolate from, discoveries made since 1977, only account for around 3% of the data (around 4500 mbls). You may be able to estimate an election from exit polls of 3% of the population (maybe not with Bush

) but the authors did not make the argument that discovery estimation follows a stationary process. Just like exit polling, the sampling has to be evenly distributed, in this case over a 100 year span, for them to extrapolate like this.
Fourth, of the discoveries made between 1977 and 1991, the bulk of the estimation correction occurred within 2 years of the initial estimate. Why not wait 2 years to establish the initial estimate for that year? For all we know, discoveries could be made in the month of December, a quick note entered, while within a few months,
but in the next calendar year, an update was made that doubles the estimate. I say so what, wait a year or two. These corrections are amplified by bad intial estimates, much like a chaotic system. Filter, I say, filter.
Of the discoveries starting in 1977, most of the big estimation errors are corrected within the first two years. If you look at the year 1983 in fact, the reserve correction
went down from 1985 to 1991. I suppose you can call this a statistical artifact but I would come back and say the extrapolated curves are statistical
artifices arriving from just plain bad assumptions on sample size and stationarity.
Above all, nowhere in the data do I see reserve growths of 15X occurring in any data. Perhaps extrapolated in some weird way the math comes out like that (their "model" amounts to a strict monotonic increase but at a reduced rate of increase of reserve growth per year), but I see only estimates going up by a factor of between 1 and 2, after settling within the first few years. It really seems odd that the discovery estimate has this kind of priority to be made in a year or two. Like I said before, I would think that the initial estimate is conservative to allow the decision for business profits to be made objectively. After that, when rigs are constructed within the next five years (at the late end for offshore in particular), a much better estimate can be made. However, if you look at the discoveries between 1975 and 1991 with this viewpoint, the "reserve growth" is much less dramatic. Which is what the update to the "enigma" paper made by Canadian authors showed
here.
The sad thing about this, is that these are US scientists and engineers (presumably) employed by the USGS. The rest of the world looks up to these guys as the best that a good education can buy. So what does a country like Saudi Arabia or Kuwait do? They see what the US geologists say about the possibilities of reserve growth. And then apply it to their own reserves. So they multiply their numbers by the Anastassi and Root correction factor. The good old USA can't be wrong? Can they?
If we did this out of some political agenda, shame on us. I guess we are getting the payback we deserve.