With that, I present a bit more witch-craft.
Rembrandt completed his 3 part series on reserve growth at TOD. He has zeroed in on the enigma of reserve growth that I have blogged on recently:
The problem with this method is the way how crude oil reserves are reported in the US which has been described in detail in part 2. Because of the practice of reporting only proven reserves, the amount of reserve growth is very high in the US when compared to other regions. In addition several heavy/extra heavy oil fields such as the kern river oil field are included in the assessment, which showed huge reserve growth due to the advancement in steam technology necessary to dilute the oil to produce it in the middle of the 20th century. It is erroneous to apply reserve growth in such heavy/extra heavy oil fields with medium and light crude oil fields.This fits in with the censored data issue I raised. So the historically censored data can either arise from shut-in fields or can get a spurt of new technology such as what happened with heavy oil in California (the Kern River oil field as Rembrandt mentioned). It could also stem from earlier quota restrictions or lower throughput during some stretches of time. In general, any throughput lower than extrapolated would lead to speculative predictions, which would imply the reserve growth predictions would be remain low during those times. This makes sense, since reserve estimates proportionally track the production rates, as the US oil companies have historically used this mapping as the proverbial "carrot before the horse" to lure the investment community.
I could find a bunch more analogies to this misuse of censored data. A fairly intriguing one that overlaps pretty nicely with a 15 year time frame, concerns the similarity to investment return rate prior to the year 2000. For example, say you didn't know how much an original stock investment was from the early part of last century. But you had the data that showed significant growth rates from the period from mid-1980's through the 1990's. This period in fact showed huge growth rates in investments, usually above 20% per year. If you would have used A&R's technique of not considering censored data, you would have heaped an incredible investment growth from investments originally made in 1900 (much, much more than the actual growth and much greater than reserve growth of oil, AAMOF). If then you hypothetically worked as an investment advisor and tried to pull this creative bookkeeping using the A&R technique on your clients, the SEC would put your sorry ass in jail in no time. This eerily parallels the equivalent of the standard financial disclaimer of "past performance is no guarantee on future returns", yet it looks as if A&R got away with it! They basically say instead that "current performance is indicative of past growth rates". Do you realize what kind of suckers that makes us?
Not showing the pessimistic growth rates also makes the USGS look really bad, and probably speculatively fraudulent if the SEC decided to look into it. Unfortunately, the USGS does not exist as a corporation and therefore immune to prosecution. The shills have participated as useful tools of the oil industry's game of 3-card Monte. And we fell for a sucker bet.
And the 3-card geologist at peakoil.com said essentially the same thing, not realizing that he buttressed up my argument.
And of course better extraction techniques have an effect on reserve growth, the problem with R&A's method is WHERE those changes fall, based primarily on the age of the fields where better extraction techniques have had the biggest effect ( heavy oil in California springs to mind ).(my emphasis) Thank you, now get off my street corner.