a recent visit to a bookstore I came across a book titled 1001 Dumbest
Things Ever Said. After reading several of the quotes, I realized
that some of the worst statements are from educated individuals,
many of whom hold top government positions.
a couple of the more memorable quotes (I will not give the author
so as not to politicize this article):
used to be a good thing, but now it has gotten out of hand."
one: "If we do not succeed, we run the risk of failure."
that gets the award and should stop and make us all think is: "There
are two kinds of truth. There is the real truth and there is the
to some of the complicated topics like environmental issues, reserve
evaluations and oil pricing, I worry that some people are using
made-up truths in debating these subjects. I want to spend this
month's column talking a little about these issues.
with the environmental issue.
14, 2005 Wall Street Journal article "In Climate Debate, The 'Hockey
Stick' Leads to a Face-Off" referred to a graph that was published
four years ago in a United Nations report.
McIntyre, retired Canadian minerals consultant, began looking at
the data that makes up this earth-shattering graph, which is one
of the pillars in the case for man-made global warming, and concluded
that the data used and the way the graph was prepared are flawed.
of some erroneous data, which the authors of the hockey stick graph
have reissued, the real problem is that the mathematical technique
used is prone to generate hockey stick-type graphs.
Francis Zweirs of Environment Canada, which is a government agency,
agrees with McIntyre.
the clincher: The lead author of the report, Michael Mann, says
"it is a campaign by fossil fuel interests to discredit his work."
To quote Mann, "It's a battle of truth versus disinformation."
As a footnote,
Mann has been asked by several groups to show all of the data and
algorithms he has used to support his theory. He refuses to do so.
"Giving them the algorithm would be giving in to the intimidation
tactics that these people are engaged in," Mann says.
one of the rules of science was to do the research and then have
your data and methods scrutinized by your peers for validity. With
this method of scientific research, bad research would never be
a great article and highlights that, as a true scientific organization,
it is encumbered upon us to join in the scientific discussion on
major issues. We have an obligation, as good stewards of the land,
to find the truth, not the "made-up truth," whether it is favorable
to our industry or not.
address the subject of reserve evaluations -- the art of PREDICTING
reserves before they are produced.
put a lot of effort into this endeavor because of the effect it
has on the company's bottom line. It is our responsibility to make
sure that the people doing the reserve evaluations are qualified
from a technical and an ethical aspect. As DPA Vice President Dan
Tearpock pointed out, a simple matter of not taking into account
the dip of a producing zone can lead to an erroneous data point
on its thickness. This is why the DPA is looking into the certification
of Qualified Reserve Evaluators with the Society of Petroleum Evaluation
factors, such as a standardized way reserves are booked, can clear
up areas of confusion.
a bit of trivia on reserve estimations: The SEC stipulates that
evaluations be based on a snapshot of oil prices at the companies'
year-end (Wall Street Journal, Feb. 14, 2005). This can affect reserves,
since you cannot book reserves that cost more to extract than the
price of the commodity (i.e. heavy oil, high volume water wells
and stripper wells). Wells or projects that were economical all
year and have reserves booked could have to be written down if,
at the end of the year, there is a significant drop in the price
of oil and gas.
is always searching for cash, almost as much as politicians do,
and we can't afford to give the perception that there is something
unethical in the way we book reserves. We need to take the lead
on this issue as an industry, and not force the government to mandate
laws to protect OUR investors.
is putting together a CD on energy facts, with the effort spearheaded
by Bob Shoup.
is a complicated issue, and this CD will help each of us better
understand this subject ourselves, as well as being able to explain
pricing and other energy facts to non-industry individuals.
watch for information about this CD to be posted on the DPA Web
site in early fall.
to leave you with this one final quote:
for oil? You mean drill into the ground to try and find oil? You're
A worker whom Edwin L. Drake tried to hire on his project to drill
for oil in Titusville, Pa., 1859.
and find that next big play.