<DrumBeat: December 4, 2006 The Oil Drum DrumBeat: December 5, 2006>

226 comments on A Debate on the Substance and Timing of the Peak of Oil Production and Consumption, Part I

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westexas on December 4, 2006 - 2:17pm Permalink | Subthread | Parent | Comments top
Khebab is my hero.  

What is the long term annual rate of increase in total imports?

Could you show 2001 to 2006 (inclusive) total imports versus monthly spot oil prices?

As I pointed out in the article, the key question is that happens when an expectation of exponentially rising imports collides with the reality of exponentially declining exports.

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westexas on December 4, 2006 - 2:32pm Permalink | Subthread | Parent | Comments top
Also,

The absolutely critical point that we need to keep in mind is that we require ever greater total imports every year--as long as either our consumption is increasing or our production is falling.  

The only reason that we would not need more total imports year over year would be if the rate of decline of consumption equaled the rate of decline of production.  The reality is that consumption is increasing, while production is falling.

My point is that the top three exporters, in aggregate, are showing exactly the same pattern--rising consumption and falling production.

Which brings me back to my original point--a collision between expectations of exponentially rising imports against the developing reality of exponentially falling exports.

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DelusionaL on December 5, 2006 - 1:24am Permalink | Subthread | Parent | Comments top
and it would follow that the internal consumption would need to be somewhat self supporting - in that they don't need to sell oil to help fund thier social programs etc.  
A catch 22,  the need to have cheap oil for domestic use yet wanting to sell it to te higest bidder for cash flow.  
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Sam Foucher on December 4, 2006 - 2:38pm Permalink | Subthread | Parent | Comments top
Re: What is the long term annual rate of increase in total imports?

The value of the linear slope is 0.3993 mbpd per year which means an increase of +4.0 mbpd in imports in ten years (~30% increase).

Re: Could you show 2001 to 2006 (inclusive) total imports versus monthly spot oil prices?

I can't right now but I could look at it maybe tonight.

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westexas on December 4, 2006 - 2:52pm Permalink | Subthread | Parent | Comments top
I don't have my scientific calculator, but it looks like the trend line doubled, from about 6 mbpd to 12 mbpd, in the 15 years from 1990 to 2005, which suggests a long term exponential growth rate of about 4.8% per year.  

(Rule of 72, divide 72 by the interest rate, in percentage terms, to get the number of years required for a doubling).

72/4.8 = 15 years

Note that we are drawing down crude oil + product inventories as imports are now falling below the trend line.

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Sam Foucher on December 4, 2006 - 4:35pm Permalink | Subthread | Parent | Comments top
Just for the fun it, the same chart with a 3 months moving average:


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mbnewtrain on December 5, 2006 - 12:18am Permalink | Subthread | Parent | Comments top
The above graphs show a drop in imports for last 90 days of 2006 compared to previous years and the average for 3 years.  Note that this drop started when gasoline and oil prices peaked at the begining of August.  I believe this is the effect of some short term conservation and some demand destruction.  The first few percent of conservation is easy - maybe everyone conserves 3 or 4 percent to save some money, especially lower income people.  

The real test comes next year when world exports drop and the asian economies are still growing.  US economy heading for the trash can in 2007 could dampen oil prices, but a  still growing US economy could send oil prices higher and produce a world wide recession.  US still loses in the long run as our production falls during a tightening market for oil.  

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226 comments on A Debate on the Substance and Timing of the Peak of Oil Production and Consumption, Part I

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