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EIA's crappy forecasting

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  • scotpeden@cruzio.com
    Americans wealth is based on the ability to have petroleum products. Nothing moves without it as they own nearly all energy patents too. A very informative
    Message 1 of 1 , Dec 23, 2012
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      Americans wealth is based on the ability to have petroleum products.
      Nothing moves without it as they own nearly all energy patents too.

      A very informative article regarding whose setting oil prices AND
      fabricated supply demand estimates to the government.

      Who'd a figured the estimate would ALWAYS be in favor of those screaming
      there is a scarcity of supply due to demand, so they could charge more for
      the same unit and drive really bad environmental policies so we don't run
      out of oil.

      How's that $3.50 LOWEST December Gas PRICE for gas going for you, compared
      to the $1.25, 12 years ago before the perpetual Middle East Wars happened?

      Don'tcha love what YOU are paying for?

      3 X the price, are you getting paid 3 X? Your groceries also went up due
      to delivery costs, only the Oil people, the speculators, Military
      Industrial Complex (57% of all tax dollars go to the Military with 53% of
      US jobs dependent on the MIC) and of course the big winner, the
      International Bankers, have profited.

      Scott

      ---------------------------- Original Message ----------------------------

      http://energypolicyforum.org/2012/12/06/department-of-energy-new-reports-on-exportation/

      [snip]
      For instance, EIA, by its own admission, states that they had
      overestimated crude oil production 62% of the time; they had
      overestimated natural gas production 70.8% of the time; and they had
      overestimated natural gas consumption 69.6% of the time. Not the best
      track record by anyone's estimation except perhaps EIA's.

      It is also noteworthy that EIA had overestimated the energy intensity
      ratio a whopping 96.5% of the time. This is a ratio of total energy
      consumption and GDP. They tended to overestimate energy consumption and
      underestimate growth in GDP.

      In short, EIA is not very good at forecasting.*But what is even more
      interesting is that Dr. Montgomery, the lead author of this new study,
      was once in charge of models and forecasts at EIA*. Both NERA and
      Deloitte used EIA forecasts as the basis of their report models.
      Deloitte even stated that they considered EIA's forecasts to be too
      conservative in spite of the fact that EIA has not projected natural gas
      demand accurately 70% of the time.

      As any student of economics soon learns, economic models are only as
      good as their inputs. In fact, it is neither difficult nor unusual for
      models to be designed to favor one outcome over another. In other words,
      models can be essentially reverse engineered. This is especially true
      when the models have been commissioned by industries that stand to gain
      significantly in monetary terms. Or government agencies which are
      perhaps pushing a political agenda.
      [snip]
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