Politicians and Numbers

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Is innumeracy (i.e., mathematical and/or arithmetical ignorance/incompetence) a problem among the political class? You’d certainly think so, given an article in this morning’s Denver Post questioning the financial assumptions of a couple of state legislators re revenue from gas wells on the Roan plateau in western Colorado. Here’s an excerpt:

“A proposal by statehouse Republicans to channel revenue from the Roan Plateau into a fund for higher education overestimates the amount of money it will bring in, an expert on petroleum accounting said Thursday.
Sen. Josh Penry, R-Grand Junction, and Rep. Al White, R-Winter Park, last month said the state could reap a $1 billion windfall from bonus payments that drilling companies would pay to access federal land on the Roan Plateau in western Colorado.
But the numbers are far too high, according to Mary Ellen Denomy, an accountant who said she researched recent lease deals in the area at the request of some statehouse Democrats.
Denomy said the state can expect to collect just $5.8 million to $8.1 million in bonus payments from leases to drill on the Roan, which is northwest of Interstate 70 between Rifle and Parachute.
The U.S. Bureau of Land Management announced last month that it would allow energy development on the Roan, prompting Democratic Gov. Bill Ritter to ask for a delay. Currently, about 52,000 acres would be available for development.

Penry said his numbers – backed by the oil and gas industry – show that the land on the Roan Plateau could command bonus payments of $40,000 an acre. Penry cited two nearby deals that raised between $43,000 and $50,000 an acre.
“To suggest that one of the largest proven gas fields in the hemisphere is going to draw a couple hundred bucks an acre is just totally absurd,” Penry said.
Denomy analyzed 19 transactions involving leases on land controlled by the Bureau of Land Management. Based on her analysis of 20,661 acres of land on the plateau or adjacent to it, the average bonus payment was $220 an acre.
“Show me where the BLM has leased any property for $40,000 an acre,” Denomy said. “Not anywhere in our state.”
The $40,000-an-acre deal was between two private companies and consisted of land that was already developed with roads and pipelines. It was a proven natural-gas field, Denomy said.
Leases on the Roan will probably yield far less money, in part because the land isn’t yet developed and partly because of restrictions the government has placed on drilling in the area, Denomy said.”

Politics aside, this is, in my admittedly limited experience, par for the course. Whether from left or right, our local pols are always happy to throw around numbers without any attention to the facts that underlie the numbers. Give a petty elected official a set of statistics, however bogus, that support a pet belief, and he/she will throw them merrily around without bothering to investigate any further.

That may be because few of our pols come from scientific/technical worlds, where quants rule and accuracy is everything. Since our pols don’t work with numbers or statistics on a daily basis, and have never been trained in any scientific discipline, they regard numbers with superstitious awe, like so many primitive tribesmen looking at a 19th century explorer’s pocket watch.

And if numbers both intimidate and terrify, any set of numbers will work just fine. It’s not about political debate-it’s about using powerful, incomprehensible magic to confound your opponents.

One Response to Politicians and Numbers

  1. Not only is the basic math in question, but what is not added to the equation destroys any possiblility of a correct answer. The BLM sold 4 parcels on the Roan in 1999 for just $660 an acre, an absurd amount showing they are not managing our public lands for the public but for private profit. The pipelines from the area are at capacity and if the gas were coming out now, it would have no where to go. Drilling rigs are almost impossible to come by, even the prefered Chinese rigs that, by trade law, come with Chinese crews. The COGA industry association head, Greg Schnacke, said the energy corps have told him they’ll bid half or less than the surrounding leases for that 74,000 acres. Bill Barret corp, an oil and gas company said “it will be a fire sale, with companies offering pennies on the dollar”. None of this is added to the equation when these insane numbers were touted to get legislators and citizens to support this self destructive idea. Since 1982 they’ve had access to 229 million acres of public land in the west, but have only produced enough oil for 53 days and enough gas for 221 days of US consumption. Just like in this case, what they promised was there was several factors larger than what was actually there, and during that time, their other great spin tactic was reducing our dependence of foreign energy, and was as accurate as their estimates of production. We tripled our dependence since 1982. Factor in that between 2000 and 2004 the oil and gas lobby poured $75 million into campaign coffers and the picture becomes more clear of how lousy math and legislation happens. Factor in the SuperFund clean up we’ll pay for after they’ve made billions, and it becomes a net loss. Of course, there is no way to factor in the loss of groundwater from the fracturing technique they use to squeeze more out of the ground.

    July 28, 2007 at 5:48 pm