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THE International Energy Agency (IEA) Thread pt 3 (merged)

Discuss research and forecasts regarding hydrocarbon depletion.

Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Sun 20 Feb 2011, 18:10:53

Xenophobe wrote:The economic issues of the 70's were not created by the discovery profile 40 years earlier. Observe his Figure 12-2. All of the nonsense he used to lead up to HOW those little gold dots follow the red line is a complicated way of saying, "I knew there was a dip here which has nothing to do with the censored data I used to create a discovery profile so I have to make up something else KNOWING WHAT THE ANSWER IS AND THAT THE DISCOVERY PROFILE HAS NOTHING TO DO WITH IT". Whatever he calls this fudge factor doesn't matter...the only thing which allows him to fit the line is knowing AFTER THE FACT that it happened. There is a reason Stuart wanted residuals. Web certainly isn't going to tell you why.

Like I said...let Excel do it, and skip his bad philosophical interludes.


Am I apparently the only person in the oil world that has figured out that production is the convolution of an extraction profile with a discovery stimulus?
Discovery plods along in the background (everyone wants to get rich and establish dominance) while the actual production levels is sensitive to geopolitics (everyone wants to play the other guy).

The USA peak oil situation coupled with the OPEC oil embargo did put a shock in production during the 70's and 80's. The Oil Shock Model accounts for the varying production levels by convolving the discovery against extraction levels.

Since you are so insistent on this point, show me another technique that is able to sensitively detect proportional extraction from the production data? This is about as easy in principle to understand as determining the impedance from an current versus voltage (IV) curve. Do you want residuals for that? Not necessarily, you want to have the best guess at the impedance. Unless you have the calibrated gold standard for what you are measuring against, you won't get residuals with a standard instrument.
No one has another technique for determining extraction levels, therefore you won't get residuals, as you have unobservable data to compare against. So it is worse than not having a calibration, a sample calibration doesn't even exist.

Extraction levels are proportional to reserve across the spectrum. An average always exists that essentially describes the R/P (reserve over production) ratio. So say someone gives you R/P numbers. Do you insist on demanding residuals knowing full well that there is no direct measurement of R/P available in the first place? Of course not. That's why conventional Hubbert Logistic analysis is misguided, in that Stuart and company plot residuals without realizing that the difference is somehow related to sensitive changes in the extraction level. So no one has figured this out because they haven't figured out how to do convolution. I take that back because Sam Foucher did a commendable job by introducing the Hybrid Shock Model, which reconciled the Oil Shock Model with the Hubbert Logistic model.

And of course this is all described in my book http://TheOilConunDrum.com.

So keep the criticisms coming and you can shout all you want.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby Xenophobe » Sun 20 Feb 2011, 18:29:35

WebHubbleTelescope wrote:Since you are so insistent on this point, show me another technique that is able to sensitively detect proportional extraction from the production data?


I'm not even sure I understand what you mean by this. The world produced....oh...say...85 million barrels a day of various liquids we humans use last year. Approximately. What is "sensitively detecting proportional extraction" from it? Will production be offended if you don't do whatever this is...sensitively?

WHT wrote:I take that back because Sam Foucher did a commendable job by introducing the Hybrid Shock Model, which reconciled the Oil Shock Model with the Hubbert Logistic model.

And of course this is all described in my book http://TheOilConunDrum.com.

So keep the criticisms coming and you can shout all you want.


I'm not shouting. I'm noting that I can use Excel with the same predictive ability that your method has, and it won't drop stupid philosophical quotes in front of my eyes while it does it.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Sun 20 Feb 2011, 18:30:52

Xenophobe wrote:I don't need a list of what Excel does, or does not have, to fit time series data with the identical level of predictive ability you have demonstrated.

Afraid you are wrong on that account. If you want to do time-series analysis of a response function against an impulse, you need to learn how to do a convolution. I take it you are not an engineer. Enough people reading this thread are engineers and they would switch over to Matlab to do this kind of work. You can do a convolution in Excel and I describe it briefly in the book, but it is painful.

Xenophobe wrote:Any time you want to show us how predictive this method is, knock yourself out. The day long movement of the DJIA sits there, no more than a day or two in the future, ready to test your trendology on.

Let us know how it goes.

Movements of the DJIA are pretty much a random walk with a long-term shifting bias. Statistically the big boys make the money by executing trades faster than the next guy. Long term I have modeled this with a dispersion formulation.

Consider a typical stock market. It consists of a number of stocks that show various rates of growth, R. Say that these have an average growth rate, r. Then by the Maximum Entropy Principle, the probability distribution function is:

pr(R) = 1/r*exp(-R/r)

We can solve this for an expected valuation, x, of some arbitrary stock after time, t.

n(x|t) = ∫ pr(R) δ(x-Rt) dR

This reduces to the marginal distribution:

n(x|t) = 1/(rt) * exp(-x/(rt))

In general, the growth of a stock only occurs over some average time, τ, which has its own Maximum Entropy probability distribution:

p(t) = 1/τ *exp(-t/τ)

So when the expected growth is averaged over expected times we get this integral:

n(x) = ∫ n(x|t) p(t) dt

We have almost solved our problem, but this integration reduces to an ugly transcendental function K0 otherwise known as a modified Bessel function of the second kind and order 0.

n(x) = 2/(rτ) * K0(2*sqrt(x/(rτ) ))

Fortunately, the K0 function is available on any spreadsheet program (Excel, OpenOffice, etc) as the function BESSELK(X;0).

Let us try it out. I took 3500 stocks over the last decade (since 1999), and plotted the histogram of all rates of return below.
Image

Like I said, I interpreted this more completely here:
http://mobjectivist.blogspot.com/2010/1 ... s-toy.html

Now if you want me to confirm that I can predict the movement of the DJIA a day or two in advance, you would have to be insane. I understand exactly how the stock market works and know that it is a sucker's bet. The random walk component is much bigger than anything else and I can only suggest a statistical ensemble movement long-term.

Incidentally, the kind of analysis I presented falls under the umbrella of Econophysics. This isn't the quant stuff that ruined Wall Street but straightforward applications of statistical mechanics formulations from the physics world. Like my work on oil depetion, this stuff will eventually take over mainstream economics thought. It essentially explains and helps us understand what is going on. As a benefit, with a constrained resource, it actually allows you to peek into the future.

Next question please?
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Sun 20 Feb 2011, 18:46:13

Xenophobe wrote:What is "sensitively detecting proportional extraction" from it? Will production be offended if you don't do whatever this is...sensitively?

It is sensitive because all the other techniques are what is known as swags. They are just rough approximations. Since I carry the reserves forward from discovery and create a self-consistent model, the sensitivity to extraction levels improves over the other techniques.

I'm not shouting. I'm noting that I can use Excel with the same predictive ability that your method has, and it won't drop stupid philosophical quotes in front of my eyes while it does it.

It likely is not as good as my predictive ability. What can I say?

I am having a lot more fun arguing over this stuff than during my previous sessions on PO because I have most of my arguments in the can and can let the work speak for itself. Xenophobe, if you have a go-to place for your Excel work, I have plenty of time to look it over and give a more measured opinion.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby Xenophobe » Sun 20 Feb 2011, 18:50:33

WebHubbleTelescope wrote:Next question please?


Sure. How about answering the first question? Anytime during this coming week, before the market opens, lay out of the value of the DJIA over the hours it is in motion. 15 minute intervals seem fair? Do that, and I will reconsider my opinion on the non predictive nature of your trendology.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Sun 20 Feb 2011, 19:04:47

Xenophobe wrote:
WebHubbleTelescope wrote:Next question please?


Sure. How about answering the first question? Anytime during this coming week, before the market opens, lay out of the value of the DJIA over the hours it is in motion. 15 minute intervals seem fair? Do that, and I will reconsider my opinion on the non predictive nature of your trendology.


It can't be done for the DJIA. The other analysis on oil can be done because it is a finite resource and you know the constraints and the endpoints. It is still stochastic but you have a much better chance because of the physical constraints.

It is abundantly clear that you are using a fallacious line of reasoning. Listen, I wasn't born yesterday and know all the tricks.
http://www.don-lindsay-archive.org/skep ... #goalposts
Moving The Goalposts (Raising The Bar, Argument By Demanding Impossible Perfection):
if your opponent successfully addresses some point, then say he must also address some further point. If you can make these points more and more difficult (or diverse) then eventually your opponent must fail. If nothing else, you will eventually find a subject that your opponent isn't up on.
This is related to Argument By Question. Asking questions is easy: it's answering them that's hard.
If each new goal causes a new question, this may get to be Infinite Regression.

By prompting you with "Next question please", I realize that I am just egging you on. But since I know it is coming and call it, you get to see my excellent predictive ability in action.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby dsula » Sun 20 Feb 2011, 19:07:41

WebHubbleTelescope wrote:I take it you are not an engineer.

:-D :-D :-D . Of course he's not, he's a retired newspaper editor, who'd rather cutoff his tongue than admit he's wrong. Hahaha. Xeno/Short an engineer..... beautiful.
But I guarantee you he will drag the thread into such BS that you'll end up giving up and say: screw it, i've got better things to do.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby Xenophobe » Sun 20 Feb 2011, 19:16:15

WebHubbleTelescope wrote:It can't be done for the DJIA.


I know that. But now we have a basis from which to start.

How does trendology on oil time series data (discovery or production) have any more predictive ability? If I understand your assumptions correctly, you think it follows from discovery as a first order input?
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby mididoctors » Sun 20 Feb 2011, 20:34:07

Xenophobe wrote:
WebHubbleTelescope wrote:It can't be done for the DJIA.


I know that. But now we have a basis from which to start.

How does trendology on oil time series data (discovery or production) have any more predictive ability? If I understand your assumptions correctly, you think it follows from discovery as a first order input?


ok lets assume the discovery profile for C+C is wrong..

plug some new values you think are correct and lets see how much it moves the curve?
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Mon 21 Feb 2011, 00:24:11

Xenophobe wrote:Perhaps you aren't familiar with the Box quote we have been referring to.

To paraphrase, all models are wrong, some are useful.


Box is still alive so he can pipe up and clarify what the deeper meaning of that quote is. From the book that the quote comes from, his preceding sentence is "The fact that the polynomial is an approximation does not detract from its usefulness because all models are approximations."
That is basically stating that 1.0000001+1.0000001 = 2, as a model of fixed point arithmetic, big deal!

Here is a short course in logic. Just because useful idiots exist, this does not imply that "all people are idiots, yet some are useful". When deciphering logic, one must look at the complete context !

Campbell can tell Web what numbers to use, and Web can deliver a thoroughly complex system which hits the given peak date every time. Campbell changes his mind by a few years, Web can do it again. And so on and so forth. Call it "kicking the can...with a black box"...peakers would eat it up. Maybe Web can collect royalties. This could go on for years before...as usual....someone who compares predictions to reality will notice that the same kick the can routine Campbell did throughout the 90's is now being employed in the 2010's...except...there is a black box involved! Now we can blame the box rather than Colin!


I thought Colin Campbell had retired.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby mididoctors » Mon 21 Feb 2011, 04:19:06

Xenophobe wrote:
mididoctors wrote:ok lets assume the discovery profile for C+C is wrong..

plug some new values you think are correct and lets see how much it moves the curve?


Perhaps you aren't familiar with the Box quote we have been referring to.

To paraphrase, all models are wrong, some are useful.

If the model is useless, there is no point to any experimentation. Its all GIGO (garbage in, garbage out). Web builds models, the beauty of which is that they can be used to fit mostly anything, and can return nearly any predictive response you would like.

So, to answer your question, decide what you want the future to be, tell Web, and he can configure his scheme to deliver it. From a peakers perspective, this could really be a breakthrough of the first order. Campbell can tell Web what numbers to use, and Web can deliver a thoroughly complex system which hits the given peak date every time. Campbell changes his mind by a few years, Web can do it again. And so on and so forth. Call it "kicking the can...with a black box"...peakers would eat it up. Maybe Web can collect royalties. This could go on for years before...as usual....someone who compares predictions to reality will notice that the same kick the can routine Campbell did throughout the 90's is now being employed in the 2010's...except...there is a black box involved! Now we can blame the box rather than Colin! I can just see ASPO at their annual meetings sitting around staring at the black box...singing its praises..bowing down to it..and once a year..it will kick out a slip of paper..and on that paper is a new year! The NEXT peak oil prediction! There will be celebration and singing, cheering and much wine will be consumed. Hey, no reason peak oil can't be used by the pessimists of ASPO to have a good party.


feel free to present your own model?
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby mididoctors » Sun 27 Feb 2011, 04:46:58

Xenophobe wrote:
mididoctors wrote:feel free to present your own model?


I did. What did you think of it? Oh wait! It was erased before you could see it! Funny how when effective and accurate models are subjects of posts they seem to be disappeared....can't have the peaker sheeple having hope now can we?


?

if you have something of substance that is a rebuttal to WHT 's treatment of the subject I would very much like to see it.

I do not peruse this board that often so may have missed the posting you had erased?
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby SteinarN » Sun 27 Feb 2011, 05:37:09

Ahh, it feels really good to add someone to my ignore list again :)

Shorty, you know who I added :-D
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby eXpat » Sun 27 Feb 2011, 12:08:30

SteinarN wrote:Ahh, it feels really good to add someone to my ignore list again :)

Shorty, you know who I added :-D

Shorty is a front-runner in the ignore lists! :lol: :P
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby WebHubbleTelescope » Sun 27 Feb 2011, 13:19:52

Xenophobe wrote:Not possible. I post something, it is promptly erased. Unfortunate, but this is the system we post in. You aren't allowed to see the information I present. I apologize for TPTB but their word is final in the content department.


Place your model on some other web site and store this link in your signature. No use acting like a martyr about this as there is always a way to disseminate information.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby anador » Sun 27 Feb 2011, 13:25:31

I just set to foe as well.

Maybe if we get everyone to ignore the problem it will just go away.
@#$% highways
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby dolanbaker » Sun 27 Feb 2011, 15:40:28

Censorship of subject matter isn't the problem, it's derailing threads that gets mods backs up!
If you kept to discussing the subject "IEA: world set alltime high oil supply records in 2010" your text might not have been deleted.
Anyway, back on track; making up the quantities with substitute products just gives a false impression alltogether!
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby Beery » Sun 27 Feb 2011, 18:26:51

Xenophobe wrote:If I can make the liquid based fuels I need from...peanut oil....why does it matter where they come from? If I could make gasoline from...marshmellow...whats wrong with counting this marshmellow based fuel as...fuel? If I can pump it into my car like I do...say...peanut oil based fuel...and the car runs fine on both, why does it matter in the least?


I agree that if you can do these things, it doesn't matter. But the key word in all of these scenarios is 'if'. The problem is, tar sands, shale oil, etc. require oil prices to be very high in order for it to be economically viable to make fuels from them, and as we saw in 2008, the world as it currently is can't sustain those prices. Now there may come a time when it can, but that will be a world in which people making a good salary can't afford to drive cars.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby Beery » Sun 27 Feb 2011, 19:00:55

Xenophobe wrote:The key word isn't "if", because in many cases this stuff is already been produced somewhere...


The fact that it 'can' be produced somewhere at some exorbitant price does not mean it can be produced at a low enough price to work as a substitute for crude oil. I mean, heck, I 'could' build a car that runs on NASA rocket fuel, but the fact that I can do it does not mean that rocket fuel is a viable - or cheap - substitute for gasoline. The fact is, the current price of crude oil proves that non-conventional liquid fuels cannot work as a substitute. If they could, they would be online now, the price of fuel liquids would be $20 per barrel and there wouldn't even be a forum like this because it wouldn't be needed for another 50 years.

The fact is, Joe Sixpack ain't going to continue to pay $4.00 per gallon to commute to work every day. He just isn't. Sure, tar sands and shale oil can be turned into fuel, but the prices at which it can be done are not the prices that allow us to use oil at anywhere near the levels we use it now. If you think they are, then you're dreaming. Maybe you can afford to own a car that costs US$50+ every week to fill up with gasoline, but I assure you, many people - people who currently use a lot of oil - cannot - at least not long-term. At the prices at which we can turn tar sands into the products and fuels we need, cars will be a luxury of the wealthy and most people will have to give up 20th Century luxuries like cars, suburban lifestyles and foreign vacations just to be able to pay their food bills.
Last edited by Beery on Sun 27 Feb 2011, 19:24:30, edited 4 times in total.
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Re: IEA: world set alltime high oil supply records in 2010

Unread postby bratticus » Sun 27 Feb 2011, 19:15:44

meemoe_uk wrote:Has this been covered on this forum already? where?

http://omrpublic.iea.org/currentissues/full.pdf
page 57
87.3mpd average for year
88.2mpd average for 4th quarter

Sorry, that's on page 59 not 57 and on that page it clearly states to see footnote 6
6 Comprises crude oil, condensates, NGLs, oil from non-conventional sources and other sources of supply.

They go so far as to state NGL data but never separate condensates.

Condensates, NGLs and crude have different BTUs per barrel. Hence none of their data specifies amount of energy being produced.

If I wanted to hide declining copper production I could combine it with increasing corn production and produce nice tables of copper+corn increasing but the world would have a problem with such figures.

Why the world is so able to swallow charts of crude+condensate+NGL but would choke on copper+corn is beyond me.
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