DrumBeat: April 15, 2007
Posted by Leanan on April 15, 2007 - 8:58am
Topic: Miscellaneous
Global Warming Called Security Threat
For the second time in a month, private consultants to the government are warning that human-driven warming of the climate poses risks to the national security of the United States.A report, scheduled to be published on Monday but distributed to some reporters yesterday, said issues usually associated with the environment — like rising ocean levels, droughts and violent weather caused by global warming — were also national security concerns.
We Can't Go On Feeding - And Breeding - Like This
In the Road Runner cartoons there is usually a scene where Wile E. Coyote, chasing the Road Runner, runs off a cliff. He continues on a horizontal line for a couple of seconds, looking increasingly puzzled and concerned, until he realizes his predicament, tries vainly to reverse course, and falls to the desert below.This is symbolic of the situation ecologists call "overshoot." Overshoot is when a species reproduces to a number that its environment can't sustain.
Saudi Aramco, Developers Tie Up in Khursaniyah Mega Oil, Gas Project
It's an amazing enterprise — one of several ongoing Saudi Aramco mega-projects intended to add new increments to Saudi Arabia's production. The output of these projects will rival the entire production capacity of many oil-exporting nations.
Crop prices soar, push food costs up globally
Soaring prices for farm goods, driven in part by demand for crop-based fuels, are pushing up the price of food worldwide and unleashing a new source of inflationary pressure.The rise in food prices is already causing distress among consumers in some parts of the world - especially relatively poor nations such as India and China.
Russia commences construction of floating nuclear power plants
Russia has launched the construction of floating nuclear power plants, the head of Russia's nuclear power agency said Sunday.
Stopping climate change: tomorrow is too late!
Unfortunately, the goal being proposed by the ALP premiers is woefully inadequate for an Australian contribution to achieving the reductions that the Stern and IPCC reports say are necessary, especially given that Australian per capita greenhouse gas emissions is over four times the global average.
U.S. Report Predicts Peak Oil by 2040
Many analysts say peak oil production will occur before 2040; some say it’s already happened. Even some big oil producers say peak production will happen prior to 2050. Now, a U.S. report confirms the validity of Hubbert’s theory.
Russian gas giant moves in on British consumers
Gazprom is planning to sell energy direct to UK households using its own brand name, undercutting British Gas and other gas and electricity suppliers.
James D. Hunt, a student at Carl Sandburg College, believes his on-demand, hydrogen fuel generation system can save consumers thousands of dollars. Hunt said large-scale versions could be converted into power generation plants, eliminating the exorbitant cost residents currently pay for electricity, as well as offering substantial savings for fuel for vehicles of all kinds. Hunt has a patent pending.
Global Warming Pollution Up in 48 States Since 1990
Global warming pollution increased in all but two states nationwide between 1990 and 2004, according to “The Carbon Boom,” a new analysis of state fossil fuel consumption data released today by the U.S. Public Interest Research Group (U.S. PIRG). This is the first time that 2004 state-by-state data on carbon dioxide emissions have been released.
Much of the recent news in Bolivia has been about the ongoing problems of the Morales Administration is having in implementing its much-heralded “gas nationalization” decree. The musical chair dramas of coming and going government gas officials, revelations about poorly drawn contracts, and a basic lack of professional capacity at the highest levels have cast real doubt over how much Morales can really deliver on the centerpiece of his government so far.
SPE official sees oil and gas as 'sunrise, not sunset' industry
"Some call us a sunset industry, like we're over the hill," commented Bill Cobb, who will assume the presidency of the Society of Petroleum Engineers International in November. "I say 'Hey, we are a sunrise industry.' I know of no other industry that utilizes higher technology than the oil and gas industry, from computers to drilling wells."
Australian Oil Body Seeks Tax Breaks for Exploration, Projects
Australia's oil and gas companies need better tax incentives to encourage exploration in new areas and to help develop large natural gas projects, the industry's biggest lobby group said.
Natural gas 'future' for oil industry
QUADRUPLING Australia's natural gas capacity could be both an environmental and economic solution to the challenges facing the industry, a major international conference will hear this week.
India: Oil prices risk to financial stability
"While I see good prospects for the global economy, there are a number of risks emanating from the behaviour of oil prices, adverse developments in the US housing market, persistence of global imbalances and possible emergence of inflationary pressures," Rakesh Mohan has said.
The Philippines: Time to revisit nuclear energy
We could have succeeded and would have been miles ahead if we had a different public and more daring leaders. The credit for the idea of a nuclear power plant goes to Marcos during the oil crisis of 1973. But the idea went to nothing. Instead it became the most flagrant example of corrupt lending (note that: not borrowing).
Russia To Display Alternative Energy Projects
It has been learnt that for the first time Russia for the first time will exhibit alternative energy projects including Hydrogen at the Hanover Fair, the famous industrial fair in Germany.
Report blames coal-fired plants for carbon dioxide increases
A report released Thursday by an Illinois environmental group blames coal-fired power plants for nearly half the country's increase in carbon dioxide emissions from fossil fuels between 2000 and 2004.
Don't argue about climate change, plan for it
Internecine scientific struggles over defining and measuring global climate change are obscuring more important questions about the policy dimensions of such change. Exacerbating the problem are ostrichlike government attitudes toward climate change that fail to focus attention on the more serious challenges facing society.
Eye on Iran, Rivals Pursuing Nuclear Power
Two years ago, the leaders of Saudi Arabia told international atomic regulators that they could foresee no need for the kingdom to develop nuclear power. Today, they are scrambling to hire atomic contractors, buy nuclear hardware and build support for a regional system of reactors.
Canadian Rail Workers Reject Contract Offer
A 15-day strike in February led to plant closings and shipping disruptions throughout North America, but the union said on Wednesday that it would try to limit the current walkout’s impact on rail customers.
The strategy for the air and road transport industry is perplexing. The renewable fuels obligation means that a percentage of biofuels will be added to oil and gas based fuels, but shortage of agricultural land and competition to food producers will restrict their universal application.Even at the current level of activity, road traffic would consume more than 3 times all the electricity we generate to produce a hydrogen equivalent. With the end of North Sea gas looming and as the de-commissioning of nuclear power gets under way, electricity will be at a premium and only rail can make use of the limited amount of renewable electricity efficiently.
Energy crisis? Not for the Danes
The country was almost totally dependent on the imported fuel for its energy needs when the world was struck by an oil crisis.War in the Middle East and an oil embargo sent the country a painful wake-up call — oil isn’t forever.
A series of such shocks quickly tripled the price of heating.
Things were so bad that during some winters, people closed off rooms and lived in the dining area, remembers engineer and energy specialist Niels Bahnsen. It shocked the country into rethinking its energy policy and every Dane into just how much he was using.
Military-ruled Myanmar has recently signed off on a raft of energy deals with its power-hungry neighbours, winning the junta a desperately needed income stream.But Chinese and Thai dams to be built on Myanmar's rivers to power their own economies and Asian companies drilling for natural gas off the coast to boost fuel exports are cold comfort for impoverished locals.
..."Now we average about four hours per day with power in our industrial zone, about a 50 percent decline from eight hours per day in March," a businessman, who spoke on condition of anonymity, told AFP.
Shrinking oilfields alarm observers
Almost a year ago, this column reported the conceivable implosion of Mexico's Cantarell Oilfield, second largest in the world. This prediction proved to be correct as Cantarell lost a fifth of its production from January 2006 through February 2007. This meant a loss of 400,000 daily barrels of production from this field, dropping from two million daily barrels to 1.6 million during this time period.
According to the government’s own figures, by 2015, energy demand will be nearly 22 percent greater than projected supply. By 2030, this shortfall will be 64 percent. What do these figures mean for Pakistanis? Higher prices, fewer jobs in a slowed economy, reduced opportunities, less comfort, heightened political turmoil.
Area drivers slowly warming up to E85
More flex-fuel vehicle options and places to fill up with E85 fuel are finding their way to Northwest Indiana, but drivers have yet to fully embrace the locally produced gasoline replacement.
An unmanned hydrogen fuel cell powered jet made history this week as it took to the skies over the hills of Bern, Switzerland. The Hyfish astonished its creators as it flawlessly performed vertical climbs, loops and other aerial acrobatics at speeds reaching 200 km/h.
Cal Poly Wins First Shell Eco-marathon Americas with 1,902.7 MPG
Saudi king says he wants to boost kingdom's oil production, help ensure 'fair' prices
Saudi Arabia wants to increase its oil production so it can meet domestic and international demand while ensuring "fair" world prices, King Abdullah said.Now pumping just over 11 million barrels a day, the kingdom is the world's largest oil producer and the biggest supplier of petroleum to the United States.
The king did not say Saturday how much Saudi Arabia might increase production, but it has repeatedly said it was prepared to do so. Last May, Oil Minister Ali al-Naimi spoke of raising output to 12.5 million barrels a day by 2009.
Our modern world is one of televisions, computers, big houses, long commutes, and superstores. We might be better off with smaller houses and more family interaction. Main St. stores and farmer’s markets with higher prices and more human interaction might provide more happiness than big-box stores and supermarkets with impersonal service and low, low prices.
Petrobras May Buy Ethanol Tankers as Part of Brazil Ship Plans
Petroleo Brasileiro SA, Brazil's state-controlled oil company, may purchase tankers from Brazilian shipyards to export ethanol as the company moves to quadruple foreign sales of the biofuel.
Kerry backs focus on renewable energy
The United States has been outpaced by European and Asian nations in developing technology that conserves energy and protects the environment and must encourage new incentives for creating renewable energy sources, Sen. John F. Kerry said this week.
G7 ministers give nuclear energy a nod
Finance chiefs from the G7 industrialized countries have endorsed nuclear energy, an increasingly attractive power source as governments confront global warming and over-dependence on fossil fuels.
Venezuela Pays Off IMF, World Bank Debt, Finance Minister Says
Venezuela said it paid off $3 billion in loans owed to the International Monetary Fund and the World Bank this week, ending ties to two multilateral lenders it says curtailed its ``economic sovereignty'' for decades.
The bad news is that the new testing procedure makes gas-electric hybrid vehicles look less attractive in comparison with conventional gas-only cars and SUVs, which also will see their mileage ratings drop, but by a smaller amount.
The race to build really cheap cars - Hot new trend is sturdy, inexpensive — and probably not American-made
How cheap is cheap? Renault-Nissan Chief Executive Carlos Ghosn is betting that for autos, the magic number is under $3,000. At a plant-opening ceremony in India Apr. 4, he was already talking up the industry's next challenge: a future model that would sport a sticker price as low as $2,500 — about 40 percent less than the least expensive subcompact currently on the market.
How does this affect the recent in-depth TOD analysis?
If SA does raise production what will that show?
Will all those raging arguments be cancelled or put "on hold"?
Not at all, IMO. The Saudis have always said they can raise production. Whether they actually can is the issue.
It will show that they are not at peak now, obviously.
But if they don't raise production, that won't prove anything. There will still be people saying they could, they just don't want to.
The article says:
Obviously they are not pumping over 11 million barrels per day, even if you count NGLs and anything else you can come up with. Saudi does not produce biodiesel or ethanol and obviously they are not producing 2.5 mb/d of NGLs.
But if you take that "over 11 mb/d" figure as a base, then they would need to increase production by about 1.4 mb/d in three years. (Years 07,08 and 09). Their megaporjects already in the works would do that.
What I am saying is there is absolutely nothing new in this statement. They have been singing this same tune for years. So I would not get excited about it. All we must do is wait, the data will tell everything in time.
Anyway, if you believe the "over 11 mb/d today" figure, you might as well believe the 12.5 mb/d figure in 09, after all, they both quote figures that cannot be supported with any hard data.
Ron Patterson
Ron,
You misunderstand. The oil industry recently introduced smaller barrels. At 30 gallons per barrel the new ones are smaller easier to transport and come in 19 different shades including environmentally friendly green.
Even Paris hilton was noted saying "those barrels are Hot!"
Rex Tillerson went on air to say " In an attempt to decrease global warming and increase barrels of oil production we were left with only one solution. Researchers overwhelmingly support or private research that each barrel now has 25% less carbon emissions than before. We also reached our goal of 5 MBPD of production as soon as we made the shift." He added that Exxon plans to triple production to 15mbpd by 2011 as research on 10 gallon a barrel, barrels look promising. Assuming enough govt subsidies of course.
Best,
Fireangel
And if one reads the fine print of all this PR mega production, what they are pumping is... water! ;-)
Well...oily water or watery oil perhaps!!
Hah. I will sell you all the seawater that you want for 30$/bbl :-).
If its the larger 42 gallon barrel I will take u up on that
LOL
I think next step is not to go to 10 gallon per barrel, but to go back to 42 gallon per barrel and make the gallons a bit smaller.
It does show one thing. If parts of Ghawar are watering out, and the Saudis were planning to do anything about it (for instance, more wells, bigger GOSPs, etc) they should have started 3 years ago. Remediation takes quite a while, even if it's possible.
Well, if you look at Stuart's chart, the blue line showing rig counts, they did start ramping up very seriously a bit over two years ago. Not quite as early as you say but it does suggest that they anticipated today's needs some time back and got going on a fix.
The increased number of rigs are probably working 24 hours/day to ensure that the two 2008 key projects of AFK and Shaybah expansion are not delayed any further.
Here are more charts on Saudi Arabia.
Saudi Arabia Ultimate Recoverabe Reserve (URR) Scenarios
Further to my comment on using HL analysis to estimate the Saudi Arabia URR, I thought I would plot depletion rates and remaining URRs for the three scenarios of URR=165, 175 and 185 Gb. Depletion rates are calculated as the annualised monthly production volume divided by the remaining URR.
In the annual BP statistical review, Saudi Arabia reported reserves of 169.6 Gb in 1987 and 255 Gb in 1988. Technology and increasing prices should increase reserves which gives justification to the higher URR scenarios of 175 Gb and 185 Gb. I believe that the huge increase to 255 Gb in 1988 is not true as no new fields were discovered. The misleading increase might have been due to the introduction of the OPEC quota system or some representation of original oil in place (OOIP).
URR=165 Gb
The figure below shows Saudi Arabia increasing production to just over 9 mb/d in 2011 but due to the lack of scheduled megaprojects, the production declines to under 6 mb/d in 2020. The remaining URR of crude oil and lease condensate is just under 20 Gb at the end of 2020.
Fig 1 – URR 165 Gb – 2020 Forecast – click to enlarge
Fig 2 shows in red the depletion rate being over 5% during the Iraq invasion in early 2003. However, during the high oil price periods of 2005 and the first part of 2006, depletion rates reached almost 6%. This depletion rate appears high as some damage to reservoirs could occur.
Fig 2 – URR 165 Gb – Depletion Rates – click to enlarge
URR=175 Gb
This figure has the same production profile as Fig 1 but the remaining URR at the end of 2020 has increased to just over 25 Gb.
Fig 3 – URR 175 Gb – 2020 Forecast – click to enlarge
Fig 4 below shows a lower depletion rate than the 165 Gb scenario. The depletion rate reached almost 4.5% during the Iraq invasion and then increased to just over 5% in July 2006 and fell as production rates fell. If depletion rates were increased back above 5% this would correspond to a surplus capacity of about 1 mb/d for Saudi Arabia.
Note also how production drops before quotas are reduced.
A depletion rate of 5% might be the upper limit for Saudi Arabia's fields before reservoir damage occurs. Does anyone have technical knowledge of appropriate depletion rates for Saudi Arabia fields?
Fig 4 – URR 175 Gb – Depletion Rates – click to enlarge
URR=185 Gb
This figure has the same production profile as Fig 1 but the remaining URR at the end of 2020 has increased to over 35 Gb.
Fig 5 – URR 185 Gb – 2020 Forecast – click to enlarge
For the scenario below, depletion rates never exceed 4.5%.
Fig 6 – URR 185 Gb – Depletion Rates – click to enlarge
As field by field data is not available from Saudi Arabia, the depletion rates shown in the URR 175 Gb scenario together with the HL analysis points to an increased probability of Saudi Arabia having 175 Gb URR.
Changes to Red Zone Boundary
Robelius’ thesis predicts peak oil between 2008 and 2018. However, this range of peak oil dates is due mainly to one parameter in his model: the best and worst case assumptions of Ghawar – worst case URR 66 Gb and best case URR 150 Gb. That’s a huge difference! As the world does not have any certainty over the accuracy of Ghawar URR, the red zone now starts this winter in about Jan 2008.
Given the increased confidence of Saudi Arabia having 175 Gb URR, this means that as of April 2007, Saudi Arabia has produced about 60% of its URR. This gives more support to the red zone starting sooner.
Based on the analysis above, Saudi Arabia, being the only country with significant surplus capacity, probably has about 1 million barrels/day surplus capacity in heavy crude. Since demand is forecast to be at least 2 million barrels/day greater than supply later this year, Saudi Arabia will not be able to meet the supply call and oil price shocks will occur.
Fig 7 – Ghawar URR Uncertainty brings Red Zone closer – click to enlarge
Thanks Ace,
That should have been a guest post, lots of work.
I appreciate you working both ends and modifying the megaprojects database graph, I think it provides a great amount of predictive ability going forward.
Thanks for all your work.
>> >> If SA does raise production what will that show?
>> It will show that they are not at peak now, obviously.
If they are trying to manipulate the markets, or to raise confidence in their supply abilities, perhaps they could source exports for a few days/weeks from tank farms or even over-driven wells?
They could, but if they are truly declining what benefit would delaying the day of reckoning by a couple of months do? More water handling at Ghawar, nuke power plants, offshore production, anything would take years to implement. I don't think they can stall that long. Either they can turn up the production or they can't, and we'll probably know before long.
According to multiple sources, even those actively hostile to the peak oil view, KSA produced about 8.4 mbpd last month, not 11 mbpd. KSA produced an average of about 9.6 mbpd a year ago. Neither of these numbers is anywhere close to 11 mbpd.
In short, the king of KSA is either full of it or counting on the general ignorance of journalists to let him spew propaganda.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Hi Greyzone,
Produced or exported?
On my post from Friday, I questioned these numbers as well.
Either way, they are in the midst of a Net Exports crunch...which is translating into "we cannot sell our oil" - because we need it internally and we are decreasing at 8-12% per year.
PRODUCED.
The exported was that minus about 2 mbpd (give or take a few hundred thousand bpd). Call it 6-7 mbpd exports over the last year down to 5-6 mbpd exports now. I've not seen recent consumption figures for KSA so can't really say what the actual exports are at the moment.
You can perform the same assessment for Russia. Roughly 9.5 mbpd but in Russia they have something near 5.5 mbpd consumption because of a very strong economy (and it's not just oil). So Russia exports about 4mbpd or so after internal consumption. Russia is still huge, is the currently largest producer, but is not the largest exporter. That title still belongs to KSA even after the declines.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Produced! Export numbers for 2005 can be found here.
http://picodopetroleo.net/temp/exporters/Exporters.png
However these numbers are for "all liquids" and include NGLs. The actual C+C export numbers would be quite a bit lower than the figures on PNG.
Ron Patterson
Hi Ron,
That matches against the 2005 export and production data from the EIA, I used in the Friday post.
By the EIA chart, they were producing 11.1, and exporting 9.1 ALL LIQUIDS, in 2005. Flash forward to now, and we have ~11 production and ~8.4 exports possibly.
The Crude, C+C, All liquids nomenclature issue clouds these announcements...what are they talking about (and are we sure)?
Again, I am not proclaiming to be any authority or expert, but it appears that KSA is telling the truth, just in a different tongue. (as the ALL LIQUIDS data matches their announcement numbers)
And IMVVHO, this makes it more scary. Why? Because this means, if they say they can produced 11.1 productive capacity/production, so to export more they have steal energy from their own people(internal consumption increased since 2005). This would explain why they didn't ramp up in 2005 with Katrina as well.
Or put again another way, it means THEY WON'T RAMP this summer, they have NO excess productive capacity, in All liquids(even worse).
Assumptions: (1) Total Liquids consumption increased from 2005 to 2006 at the same rate that it increased from 2004 to 2005 (2) C+C = 85% of Total Liquids.
Based on these assumptions and EIA data, Saudi C+C net oil exports dropped by about 13% from 12/05 to 12/06. At this rate, Saudi C+C net oil exports will drop by 50% in about six years.
Based on the same assumptions, estimated net oil exports by the top 10 net oil exporters dropped by about 8% from 12/05 to 12/06. At this rate, net oil exports by the current top 10 will drop by 50% in about nine years.
If, as I expect--and as the Russians and the IMF have begun to warn--Russian oil production starts declining this year or next year, I would expect net oil exports by the current top 10 to drop by 50% in around five years or so.
Based on latest HL estimates (Saudi Qt = 165 Gb), Saudi Arabia (#1 Net Oil exporter in 2005) is about 70% depleted; Russia (#2 Net oil exporter in 2005) is about 90% depleted (at least mature basins) and Norway (#3 Net Oil exporter in 2005) is about 70% depleted.
Since I first predicted (in January, 2006)--based on prior work by Simmons and based on Khebab's HL plots--a decline in net oil exports by the then current top three net oil exporters, have we had any data which would serve to contradict this analysis?
As I said elsewhere, every time I look at these numbers, I get more--not less--concerned.
While looking at 2005 annual population growth rate figures, the numbers for some ME countries is pretty shocking.
The United Arab Emirates topped the list at 6.51%.
Qatar was #3 at 5.86%
Kuwait #7 at 3.73%
Iraq #26 at 2.78 (nothing that a little civil war can't fix?)
Jordan #28 at 2.74%
KSA #30 at 2.69%
Considered along with yesterday's DrumBeat article on Pakistan's energy crunch, today's Lighting Up Pakistan is another reminder of the potent geo-political dangers we face with PO.
Armed with nukes under the control of a quasi-stable military dictatorship, a restless population of 165 million +, growing at 2% a year, prone to radical Islamic fundamentalism, while already squeezed by oil demand not being met with supply, does not make for a happy outcome should PO arrive unannounced and unplanned for soon.
As westexas suggests about meeting growing internal (or regional) demand versus the rest of the world's growing demand is going to result in some highly interesting and perhaps very deadly consequences sooner than later.
:-/
I think fertility rate is a better indicator than population growth rate. At least for some M.E. countries, a high influx of workers will affect population growth rate.
Ok, looking at the average fertility rates (between 2000-2005) and we discover the following:
Pakistan clocks in with a 5.48 avg. (world ranked #28)
Iraq at 5.25 (#32)
KSA at 5.09 (#36)
Jordon at 4.11 (#53)
UAE at 3.17 (#69)
Niger tops the fertility ranking list at 8 per woman over her reproductive life span!
Yemen is next with 7.3
Somalia third with 7.25
None of these three countries is sitting on an oil patch and all are pretty FUBARed.
Nigeria has oil, but its fertility is 5.92 (ranked #22) on top of its huge population and they are definitely FUBAR.
The point is still this: With fertility rates this high, both in the ME, and outside (e.g., Pakistan) something has to give between demand growth (internally, regionally, or by religious affiliation) and supply availability of oil for the rest of the world (and if for not growing population pressures, their imperatives of economic growth).
The deadly consequences I mentioned before are already in plain sight in Iraq. Buying time (or rather control) in this manner, while hoping for the market place to solve the oil / energy crunch, along with pretending / denying we don't have a real problem here, is not a plan of much good hope.
What percentage of those number of children go on to reach childbearing age themselves?
WT
You always talk about the ten top export countrys. How many percent is their share of the global exports??
About 94 percent!
http://picodopetroleo.net/temp/exporters/Exporters.png
Ron Patterson
Ron,
There is some degree of discrepancy on the lower end of this chart, versus the EIA data, but that's not exactly a new development. The top three, in both cases, represent about half of the net oil exports by the top exporters.
And the top three, based on HL, have collectively consumed about three-fourths of their oil (at least mature basins for Russia). So, based on the HL model, I wonder how much of their remaining conventional crude oil production will be exported? This is why I was so emphatic last year in warning about a rapidly developing net oil export crisis.
Regarding the use of top 10, partly this is because of the difficulty of getting annual production data on the top 15, those with net exports of one mbpd or more (total liquids, EIA).
In any case, in 2005 the top total liquids exports by the top 15 (one mbpd or more) were 39.9 mbpd. The top 10 represented 33.8 mbpd, or 85% of the net exports by the top 15. My guess is that the top 15 are at least 90% (probably 95%) of total net oil exports and the top 10 are 75%-80% of total net oil exports.
Note that the top three (Saudi Arabia; Russia; Norway), in 2005, represented 46% of the net exports by the top 15. As noted above, I estimate that Saudi Arabia is about 70% depleted, Russia (mature basins at least) is about 90% depleted and that Norway is 70% depleted.
It's a pretty good guess that at present, net oil exports represent about one-half of current production worldwide. My guess is that future net oil exports will only be about one-fourth of future cumulative conventional production.
So, at our current rate of imports, and assuming importers get one-fourth of remaining conventional oil, our import supply worldwide will last for about 18 years.
This is a lot of guesswork, but for the sake of argument if we assume a 90% drop in net oil exports in 18 years, this suggests an annual decline rate of 13%. Interestingly enough, this is my estimated decline rate for Saudi net oil exports from 12/05 to 12/06. As noted above, this suggests a 50% drop in net oil exports every about every six years.
A reminder, the UK went from probably maximum net oil exports to probably zero in about 5 years. My simple Export Land model, with a 5% decline rate in production and a 2.5% increase in consumption, resulted in zero net oil exports in 9 years.
Note that the world's largest importer, the US, is about 85% depleted, and world's second largest importer, China, is probably now, or will be soon, in terminal decline.
As I said before, every time I look at these numbers, I get more concerned--not less--and IMO if the export situation does not scare the crap out of you, you do not understand the problem.
"You always talk about the ten top export countries. How many percent is their share of the global exports?" I had asked this question a few weeks ago, but at the bottom of a day's Drumbeat so got no reply. So basically just under half of total world production is exported and (excuse any naivety) presumably bidding for this is what global oil prices are based on.
You "suggest an annual decline rate of 13%" and "90% drop ... in 18 years" (by 2025) in this amount - i.e. down to 4 mbpd which is an insignificant amount. Is the % decline rate based on any modeling or field-by-field analysis? It would be very interesting to see projections of exportable oil - as opposed to world total liquids - for the next 5-10 years. Maybe Khebab would have something on this? A double-digit decline in exportable oil with all that implies for price and availability, would as you say, be a very concerning scenario once we start dropping off the current oil production plateau.
Khebab and I are going to work on a Net Oil Export article for the ASPO meeting, but I am basically waiting for the EIA Net Oil Export data for 2006, so that we can plot 2004, 2005 and 2006 production, consumption and net oil exports for top 10 and then make some projections based on the historical data and the HL models. The result, IMO, will not be a pretty picture, but we will see what Khebab comes up with.
Regarding my Export Land model, consider the following: We start with a country exporting half of their production and then assume an annual decline rate of 5% and an annual increase in consumption of 2.5%. This results in an annual decline rate in net oil exports of about 16% as of year 4.5. Interestingly enough, from year zero to year seven the decline rate is 23% per year: http://static.flickr.com/97/240076673_494160e1a0_o.png.
So, from year zero (start of the production decline) to the 4.5 year mark, the decline rate was 16% per year. From year 4.5 to year 7, the decline rate accelerated to 37% per year.
In other words, we can look forward to accelerating decline rates in net oil exports once these exporting regions start declining.
In any case, once an exporting region starts declining, they are all going to have some kind of similarity, to some degree, to the UK. The UK was presumably MAX to ZERO net oil exports in about five years.
Remember, my model was a 5% decline rate an annual 2.5% increase in consumption. The most recent available data for Saudi Arabia, world's largest net oil exporter, showed an 8% annual decline rate in production and a 22% increase in consumption.
See why I get more concerned every time I run these numbers?
One question about your export model:
You seem to indicate that you think exports will drop faster then internal consumption in exporting nations...
Since oil is a global market, can't we expect high prices post peak to destroy demand equally in all countries even those exporting?
The only way I see this NOT being the case is if a country subsidizes the cost of oil in their own market or they decide that it is in their national interest not to export any oil at all.
Garth
Except for Norway & Canada, significant oil exporters do shield their domestic markets from price signals (and ebven those two OECD nations might stirve to shield their markets from severe price signals; remember US oil price controls ?).
Good example is Russia last year. Booming economy due to high oil prices. Production up 400,000 b/day, domestic consumption up 400,000 b/day, exports flat
If you think yopur needs are going to trump the needs of Moscow cabdrivers, think again !
Only when nations are on the edge of becoming oil importers do they restrain demand.
Best Hopes for Realistic Planning,
Alan