Ugo Bardi: Strahan demolishes Maugeri

David Strahan is a British journalist, known among peak-oilers for his book “The Last Oil Shock“. He doesn’t mince words in his attack to Leonardo Maugeri’s recent, very optimistic report titled “Oil: the next revolution.”

Whereas most commenters have criticized the report for its general approach and conclusions, Strahan has been more aggressive and has looked for the details, finding a true mathematical howler in it. At first, I didn’t want to believe it, but I went to check and Strahan is right. At page 20 of the report, you can read:

From 2000 on, for example, crude oil depletion rates gauged by most forecasters have ranged between 6 and 10 percent: yet even the lower end of this range would involve the almost complete loss of the world’s “old” production in 10 years (2000 crude production capacity = about 70 mbd). By converse, crude oil production capacity in 2010 was more than 80 mbd. To make up for that figure, a new production of 80 mbd or so would have come on-stream over that decade. This is clearly untrue: in 2010, 70 percent of crude oil production came from oilfields that have been producing oil for
decades.

Nearly unbelievable: Maugeri tries to demonstrate that most forecasters have been wrong in the past by noting that a 6% depletion rate would lead to the complete loss of the world’s production in 10 years. How can that be? As Strahan correctly says, the loss would be 46%, definitely not “nearly complete” as Maugeri says. Even with a 10% yearly decline, after ten years you would still have more than 30% of the original production.

Strahan then rubs salt into the wound by reporting that:

When I put this to him, Mr Maugeri seemed genuinely confused, and tried briefly to persuade me the loss was much larger. “If you have a 6% decline each year over a 10 year period, the loss of production is close to 80%”, he said, but then the penny dropped. It looks to me as if he compounded 6% in the wrong direction – for growth, not decline. “Maybe on this you are right”, he conceded sheepishly. 

Strahan’s post highlights how vulnerable most people are to fell victim of their own entrenched beliefs. It is called “confirmation bias”, it is what happens when people gather or remember information selectively, or when they interpret it accordingly to their biased view. Here, Maugeri clearly fell for the idea that “past forecaster have always been wrong,” something deeply entrenched within most cornucopian views of the future.

Of course, it is not a single mistake that can demolish a study and, apart from this misinterpretation of the decline rates, Maugeri’s report contains valid data and valuable insights. However, it is also true that there exists something that I call the “Bailey Effect” which consists in destroying a whole study by finding a single mistake in it, no matter how minor or marginal it may be. It is because of this effect that “The Limits to Growth” 1972 study was demolished, as I described here.

Will Maugeri’s study survive Strahan’s demolition? Probably not, but it is what it deserves for plenty of other reasons (see e.g. here, here, and here,).

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Here are some excerpts from Strahan’s article

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