61 comments on Oilwatch Monthly February 2009
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61 comments on Oilwatch Monthly February 2009
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hello westexas,
everytime I see this I have trouble explaining it to others , I guees because I am just an old billy beer keg ( what joe six pack grew up to be :) ) .
"are shipping about one percent of their remaining cumulative net oil exports every 50 days."
is there another way to express this to make it more understandable to IQs 100 people . It is important that they realise that oil for exports is more important than they think.
cheers
Forbin
Our middle case is that the remaining post-2008 combined cumulative net oil exports from the top five are about 100 Gb (from mature basins). At 20 mbpd, they would net export 7.3 Gb in one year, which would be 7.3% of our middle case for remaining cumulative net oil exports. At this rate, they would be at zero net oil exports in 14 years (of course, the net export rate would decline).
Think of it as a fuel gauge. Let's assume that you have a 100 gallon fuel tank in a truck, and you are burning through 7 gallons per hour. Your fuel would be gone in about 14 hours at this rate.
Using this same analogy, the Indonesian "net export fuel tank" would have lasted about five years at their 1997 net export rate (they hit zero net exports in 8 years, as their net export rate slowed).
BTW, 7.3 Gb exceeds the entire recoverable reserves from the East Texas Field, the largest Lower 48 oil field, which was critically important to the Allies' victory in the Second World War.
thanks westexas ,
In the ELM models can we assume that the usage of the country's on oil for it population will actually increase (as can be predicted) but when less exported oil would suggest a lower economic activity for the rest of the world ( importing countries ) and therefore less goods traded with that country. The effect I would have thought would be a lower usage of oil by the exporter's own people as they are hit by economic slow down, still increasing but maybe not at the current extrapolation ?
This would imply that there would be more to export, although maybe not much more....
cheers,
Forbin
Forbin
Maybe WT will correct me but I think the underlying tenet behind the ELM is that oil wealth (ie the ability to export) is so fundamental to economies that this wealth is invariably shared with populace of the country, so they consume more especially as the 'cost' of the oil does not directly affect their balance of payments (is is an off cashflow item) . Much as a farmer will tend to consume some of their own produce.
I like you wonder if it the ELM takes into account the dominance of Oil in state revenues, ie will Mexico or Russia be able to follow the same pattern as their tax revenue is so linked to oil. This was certainly a problem in totalitarian states (Like Romania during Communism when they exported ALL their sunflower oil leaving none for the citizens)
The other factor to consider is not all internal consumption of an "export land" is personal use (we do tend to equate oil consumption with cars), KSA building an Aluminium Smelter, Desalination works, Chemical Plant etc, all consume oil but the 'value added' factor enhances the nation state revenue. Maybe the two uses (productive & lifestyle) compensate due to external correctors.
Neven
I really only proposed the ELM as a simple mathematical model to help me understand how fast net exports would decline given a single digit exponential decline rate and a single digit rate of increase in consumption. I was, and I remain, shocked at how fast net exports decline.
Given the fact that two countries with vastly different rates of increase in consumption--the UK and Indonesia--showed declines similar to the ELM suggests to me that most post-peak exporters are going to show similar declines. In the case of Indonesia, all of their net exports were shipped at average annual oil prices of less than $40.
And of course, if the rate of increase in consumption is high enough, net exports can go to zero, long before the exporting country's production peaks, e.g., the US.
Neven,
You make a good comment in your last paragraph. Why ship the oil some place else to make products? Why not create the industries that consume the raw material which will create jobs for your population and increase your GDP. It is a win win...
Don
Its the not in the interests of the US or other oil consuming nations that these energy-banana republics ever develop this capability. If they can themselves create the things we currently trade for their oil what would we trade, more packaged dodgy debt perhaps?
Nick.
How about "At current supply and consumption rates the oil available for export around the globe will be ZERO in 5000 days, or less than 14 years".