The Oil Drum

84 comments on The Megaproject update

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jokuhl on April 5, 2006 - 2:18pm

Can you help me understand why, if the prices are going to be escalating with a dropping supply, that the expectation is that countries will KEEP their domestic usage intact and not be selling this precious commodity? I tend to look at this like the adage about 'The Cobblers kid doesn't have shoes'.. What'll be more in demand, the energy, or the cash?

Other trends might also be precluding this market change, like the increase in Countries Nationalizing their fields, as the clear National Security importance of this resource makes itself more obvious to each state.

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totoneila on April 5, 2006 - 6:46pm

Hello Jokuhl,

I think what will be the key postPeak determinant in export amounts is how self-reliant or self-sustaining each country is in a purely biosolar domain. Don't have the facts at hand, but it seems Venezuela's natural habitat should be able to water & feed its population with very little oil, versus Saudi Arabia's massive requirements to desalinate drinking water and import food.

If Chavez is smart, he should be encouraging voluntary birth control and Powerdown in Venezuela; to maximize biosolar sustainability, then they can sit on their reserves to use internally far into the future, or dribble out for export later at a vastly higher price.

Saudi Arabia, which has a very low quotient of natural bio-sustainability due to rapid and continuing pop. Overshoot and the parched desert climate, is therefore forced to export energy to import ever-increasing amounts of food and desalinization equipment in a fruitless effort to avert eventual political revolt when depleting exports cannot match basic lifeneed requirements.

Each countries' individual depletion rate colliding with its population's minimal sustanence needs determines when TSHTF.

This is the basic formula that Jay Hanson and Jim Kunstler use in warning us how the American Southwest will basically be ghost towns in the future.

Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?

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BrianT on April 5, 2006 - 7:00pm

Totoneila: You summed it up very well. Exports will continue if the exporting country has a dire need for the cash (greater than the need for the oil internally).