1. Introduction
2. Price forecasting: the 3% rule
3. Historical supply forecasting
4. The nature of the errors
5. Geophysical models
6. Methodological errors
7. Depletion effect
8. Economic models
9. A simple supply model (and its shortcomings)
10. Dummy variables
11. Returns to drilling: unfortunate convergence
12. Aggregation
『13. Conclusions
Most oil supply forecasting has been done very badly in the
past, with many models severely underspecified. Although geology
is an important determinant of discovery rate, the tendency of
some modelers to interpret all supply behavior as being geologically
determined is impossible to justify. And even where the models
appear to be correctly specified, the results still prove to be
too pessimistic, suggesting there is some remaining bias at work.
This article is of necessity much too brief to describe all of
the many difficulties in analyzing and forecasting oil supply,
let alone cover all aspects of the debate on the issue - the breadth
of the errors, the misleading semantics, and so forth. Indeed,
one of the best pieces of evidence of pessimistic bias is simply
the overwhelming number of forecasts that have been produced -
many from models whose design appears accurate - but which proved
not only wrong, but embarrassingly too low. That many of those
modelers have generated new forecasts which are nearly identical
to their old ones without explaining the cause of the previous
errors should make even the most casual observer skeptical.』
Notes
References