Production Estimates = Demand Estimates

Finally, a brave volunteer got a oilman yo-yo to admit the sad truth that their oil supply estimates derive only from oil demand estimates. Gail got this revelation out of John Felmy, American Petroleum Institutes's Chief Economist, at a recent TOD post describing a conference call with Chevron executives.

This proves once again that big oil and EIA never intended to predict anything realistic, instead opting to project their wishes for the future. Unfortunately, that doesn't fit into any branch of scientific forecasting methods that I have ever encountered.

Update: Dissident makes a good comment that may explain the thinking as delusional economics mathematics (i.e. the dismal science)

"The strategy the economists used was as simple as it was absurd—they substituted economic variables for physical ones. Utility (a measure of economic well-being) took the place of energy; the sum of utility and expenditure replaced potential and kinetic energy. A number of well-known mathematicians and physicists told the economists that there was absolutely no basis for making these substitutions. But the economists ignored such criticisms and proceeded to claim that they had transformed their field of study into a rigorously mathematical scientific discipline."

Oh my, what medieval garbage.

So they seem to think they can make a mathematical analogy to the conservation of energy, whereby K.E. + P.E. = constant. Yes, medieval garbage based on some bizarre premise spurred by a very bad analogy.