May

24

-oil spill greater than first estimated

-Euro zone bailout underestimated

-USD rise underestimated

-oil's fall underestimated

-tarp underestimated

-unemployment understated

-recession length underestimated

-volcano impact underestimated

-gold's persistence understated

-housing slump underestimated

Reality seems to be generally understated and always underestimated.

Easan Katir comments:

With the theory that to solve a problem one first needs to define it accurately, a small point for accurate terms:

In the Gulf, there is not an oil "spill". A spill is what happens when a VLCC or Panamex double hull ruptures and leaks, or when Ms. Napolitano jiggles her teacup after reading her poll numbers. A spill is measurable and contained.

In the Gulf is a giant oil gusher from a super-high pressure reservoir, which has been spewing heavy crude oil and methane 24/7 for over a month with no end in sight, with the potential to become the worst eco-disaster in the history of civilization.

David Aronsen comments:

It's rational and in keeping with Bayes Theorem that estimates be updated slowly in response to new information. The related cognitive errors of anchoring and conservatism bias can account for the initial low estimates cited. Then as new information comes in they should be nudged in the direction of the deviation between the prior belief and the new evidence. 

Rocky Humbert writes:

Pravda reports that the Soviets used nuclear explosions five times (from 1966 to 1972) to stop underwater well blow-outs. Here's the Pravda story.

One of the reasons that it's critical to assess to true flow rate is it's a first step towards calculating the comparative environmental damage from a nuclear explosion viz a viz a continuing leak for another two months. It's interesting that this is not being discussed in the mainstream media.

Stefan Jovanovich writes:

In 2005 petroleum engineering researchers from Texas A&M University suggested that drilling in the "dangerous and unknown" ultra-deep environment required new blowout control measures: "While drilling as a whole may be advancing to keep up with these environments, some parts lag behind. An area that has seen this stagnation and resulting call for change has been blowout control."

A redundant system might have avoided this because the Cameron Blow-out-Preventer is partially working: The incoming pressure from below the BOP has been measured at between 8,000 and 9,000 psi, while the outflow pressure into the Gulf is 2650 psi. 2 BOPs in series might have done the trick.


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3 Comments so far

  1. Gary Rogan on May 21, 2010 1:06 am

    Those who are evaluated today based on their actions tend to underestimate the negative consequences of those actions and get their allies to do the same. Nothing serious today is done without a well-planned agenda. A big part of the agenda is to minimize any questions about negative consequences.

  2. William Hansen on May 21, 2010 5:10 am

    Remember, it is never as bad as you think but it can always be worse.

  3. John Brovich on May 21, 2010 6:47 am

    I would also include the following:
    - US budget deficit - underestimated
    - Financial market tail risk - underestimated
    - Socialism in America - underestimated

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