<You decide who's to blameThe Oil DrumEaster Sunday Open Thread>

186 comments on Plateau continues, aided by outages...

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westexas on April 15, 2006 - 4:15pm Permalink | Subthread | Parent | Comments top
You could augment my Export Land Model with Import Land Model.

Let's assume that Import Land produces 1.0 mbpd and consumes 2.0 mbpd.   Import Land imports 1.0 mbpd from Export Land.  

Let's fast forward six years.  Import Land's production has dropped by 10% to 0.90 mbpd.  Export Land's exports have fallen  from 1.0 mbpd to 0.4 mbpd.  

So, no matter how much Import Land would like to consume, the total available to Import Land is domestic production (0.9) + imports (0.4) = 1.3 mbpd, down 70% from six years ago when Import Land was consuming 2.0 mbpd--even though Import Land's production was only down 10% and Export Land's production was only down 25%.  

I guess one solution is for the Neocons in Import Land to invade Export Land, claiming that Export Land is a threat to Import Land.

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westexas on April 15, 2006 - 4:18pm Permalink | Subthread | Parent | Comments top
Correction

So, no matter how much Import Land would like to consume, the total available to Import Land is domestic production (0.9) + imports (0.4) = 1.3 mbpd, down 35% from six years ago when Import Land was consuming 2.0 mbpd--even though Import Land's production was only down 10% and Export Land's production was only down 25%.  

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westexas on April 15, 2006 - 4:46pm Permalink | Subthread | Parent | Comments top
If the Neocons in Import Land can't persuade (dupe) their citizens into invading Export Land, another logical reaction would be move from Import Land to Export Land.

I suspect that we are going to see this within the US and on a global basis as people move toward the energy supplies--roughly equivalent to trying to gather around  a camp fire on a cold night.   This will tend to aggravate the rate of increase in consumption in the energy exporting areas, thus accelerating the decline in net exports.  

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totoneila on April 15, 2006 - 4:56pm Permalink | Subthread | Parent | Comments top
Hello Westexas,

Absolutely right, the world's wealthy are buying into the modern mega-campfire of Dubai's skyscapers as fast as they can.  I am sure you have seen the astounding photos of rampant construction on every corner.  Of course, a new eruption of widespread ME war could turn these buildings in ruins rather quickly.  We'll see.

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

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westexas on April 15, 2006 - 6:10pm Permalink | Subthread | Parent | Comments top
I think that it would be really interesting to show some real life case histories of countries/regions that have gone from net exporters to net importers, i.e., plots showing production, consumption and net exports turning into net imports.  I am especially interested in the rate of decline in production versus the rate of decline in net exports.  

A really fascinating development is going to be on the natural gas side, especially here in the States.  I would think that you would want to move away from big natural gas importing areas at the ends of the distributions systems as fast as possible.  California comes to mind.  Note that this would increase consumption in the exporting areas, accelerating the decline in natural gas "exports" to the "importing" areas.

I wonder if we might see the Canadians construct a wall, to keep the Americans from migrating North?

On the oil side, an obvious problem is going to be the dollar.   The question that the oil exporters are going to start asking is what thing of value can you offer us in exchange for our oil, especially if the exporters have trouble exchanging dollars for hard assets.  They could always buy stock, but the question arises to what the inherent value is in the US stock market, especially if the currency is depreciating.  

The Neocons reasoning for putting 150,000 troops in the Middle East becomes more transparent every day.  Unfortunately, I wonder if we are rapidly approaching the point at which everyone in the neighborhood is going to be shooting at us.

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oldhippie on April 15, 2006 - 6:57pm Permalink | Subthread | Parent | Comments top
What an amazing post. Thank you. Always something to think about.
The case study/history that fits your criteria and is also a big player in US machinations in the ME is England. They are also on the end of natgas distribution. And only missed bigtime economic shutdowns this past winter because the weather kept breaking warm. Thoughts?
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westexas on April 15, 2006 - 7:05pm Permalink | Subthread | Parent | Comments top
UK is to Continental Europe as California is to North America.
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Mad Maxout on April 16, 2006 - 9:59pm Permalink | Subthread | Parent | Comments top
This with rich people moving toward energy sources makes sense. If I were to hit the lotto, I'd move to Ft McMurray in Canada! Besides family not knowing about the place, they will be thinking I moved to any one of a bunch of resort towns around the Mediterranian where I served in the Navy. Talk about a diversion!

I'm sure any wealthy peaknik will move to all manner of oil-rich places depending on personality match. Of course, that will only run up consumption in those places - and exports drop quicker. I'm sure a lot of people on this site will want to move if possible to the Dubais and Ft McMurrays of the world.

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Stoneleigh on April 17, 2006 - 12:04pm Permalink | Subthread | Parent | Comments top
What do you think life would be like in Fort McMurray? It's certainly nothing like Dubai. Proximity to energy resources does not necessarily translate into a high standard of living, especially where energy production can out-compete all other uses of resources.

Although Fort McMurray may appear to be awash in cash, the Regional Municipality of Wood Buffalo (within which Fort McMurray is located) shows a very different picture of what is happening. With a population of 56,000 (which the industry predicts may soon reach 80,000), Fort McMurray has, as one municipal representative put it, the amenities of a town of only 10,000. Downtown Franklin Avenue is known across Canada as the "crystal meth" capital of Alberta....

....In the spring, the melting snow bares streets littered with all kinds of garbage. The mayor would like residents to take more pride in their community. There's the debauchery on Franklin Street, the overcrowded schools, the lack of land for proper housing developments, plus the need for a new fire station for the south end of the city and a new water treatment plant.......plus a lack of adequate policing simply because the RCMP cannot afford to subsidize its officers to pay the city's high cost of living....

....The Crown land owned by the province that surrounds the city has contributed to a serious housing shortage that's become a nightmare for home-buyers and a major headache for an industry desperate to lure a skilled workforce north. What's more, the local economy is badly skewed. Pipe-fitters, electricians, engineers and plumbers can easily earn $100,000 a year, and the average age is just over 30. but the Regional Municipality of Wood Buffalo and local businesses can't compete. In a province where the minimum wage is just $5.90 an hour, Tim Horton's offers its workers $10.25 an hour to serve doughnuts and coffee in Fort McMurray, and they still cannot find staff. Teachers, medical workers and municipal employees cannot be persuaded to stay in Fort McMurray at the wages the city can afford.

(From Fuelling Fortress America)

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