In this paper we briefly discuss the background to the problems of finding effective flow properties when moving from a detailed representation of reservoir geology to a coarse gridded model required for reservoir performance simulation. The basic requirements for the upscaled properties are also discussed. We then consider one technique, renormalization, that in recent years has shown promise as an accurate, yet fast, method. The mathematical background of the renormalization approach is examined. A rigorous formalism is developed that allows an explicit calculation of the error terms to be made. In a very simple case use of the correction terms is shown to produce a dramatic improvement in accuracy of the method.