Export Land Model in Action

[BigTex]

It is interesting, too, that there is no mention of using some kind of vast solar power collection scheme to generate this electricity.

Presumably, someone modeled the different approaches and concluded that even an inefficient energy hog fossil fuel powered setup was preferable to solar power, even in the middle of the desert, and even in the face of higher and higher fossil fuel costs.

Another thing I hadn't thought about much was that the spread of prosperity in some areas is probably a lot more energy intensive than others. For example, if a tropical paradise went from being primitive to civilized, there might not be a HUGE change in energy consumption. However, when people in the middle of the desert decide they're tired of sweating all the time and want 24 hour a day climate control, the change in energy consumption could be enormous.

The fact that some of these ME populations are growing in both numbers and levels of prosperity is not good at all from an energy export perspective.

To the question about what the Kuwaitis are doing with all of that electricity, I suspect they're just running the A/C.

I wonder what kind of building codes they have in Kuwait and how much focus there is on energy efficiency.

[yesplease]

Now imagine ConEd or PG&E making the same demands. I'm talking mass texting an order with exclamation marks. Hmm? Not likely, is it?

Nope, because they don't operate in areas where outages are likely, at least compared to SCE. Otoh, SCE has many rebates available for more energy efficient appliances as well as a programwhere customers have cut-offs on their AC unit installed that can be activated according to SCE's discretion in exchange for lowering their bill.

[yesplease]

It is interesting, too, that there is no mention of using some kind of vast solar power collection scheme to generate this electricity.

Presumably, someone modeled the different approaches and concluded that even an inefficient energy hog fossil fuel powered setup was preferable to solar power, even in the middle of the desert, and even in the face of higher and higher fossil fuel costs.

Um... They own the FF's, so the higher and higher costs aren't a really big issue, and I doubt they could get a solar thermal installation up in a year, not to mention solar thermal isn't exactly the best candidate for a peaker plant.

[yesplease]

I guess starvid the important point your missing is the rate of price rise will hugely increase because of the exporting nations no longer exporting.

The increase in price depends on how much oil is taken off the world market, in this case we're looking at, according to aflatoxin, ~50kbpd if run at WOT for ten hours a day. Since these are peakers, they probably won't even need an average of 50kbpd in summer, maybe closer to half that, and throughout the year probably less than that on average.

But, for the sake of a wide margin of error, lets assume they run these things flat out for 10 hours/day every day, even though they probably don't. Compared to production of 9,000kbpd, that's about .5% of Saudi production and .05% of world production. Not exactly the kind of declines detailed in the land export model assuming they run it WOT, and probably a fraction of that given it's likely role as a peaker plant.

[BigTex]

It is interesting, too, that there is no mention of using some kind of vast solar power collection scheme to generate this electricity.

Presumably, someone modeled the different approaches and concluded that even an inefficient energy hog fossil fuel powered setup was preferable to solar power, even in the middle of the desert, and even in the face of higher and higher fossil fuel costs.

Um... They own the FF's, so the higher and higher costs aren't a really big issue, and I doubt they could get a solar thermal installation up in a year, not to mention solar thermal isn't exactly the best candidate for a peaker plant.

It's a little different if you own it, but not a lot. There is still the lost profit you could have earned by selling it at $130 and up per barrel. They have to believe that the price of oil is going to continue to rise, so the present value of that lost stream of revenue from the foregone exports is probably enormous.

[yesplease]

I think that ultimately they feel adding a bit of generation capacity for peak load is worth the likely small drop in revenue from the correspondingly small amount of oil used for it's operation during the hottest times on the hottest days. Besides, better to do it now while oil's under $200/bbl and get it switched over to NG, something there isn't as much of an export market for AFAIK in a year or so, than deal w/ power outages from now until it's put in later w/ oil at $200+/bbl.

Also, just like someone who makes tens of millions per year driving a $500,000 sports car when they could drive a $10,000 compact, at ~$1.2 billion/day from oil, they can afford to splurge a bit. Speaking of which, didn't the Bush family have ties to the Saudi Royal family? It would certainly help having someone in a high up place insuring as much consumption as reasonably possible from their number one best customer.

[Twilight]

Another thing I hadn't thought about much was that the spread of prosperity in some areas is probably a lot more energy intensive than others.

Exactly. Not all parts of the world start from the same level of viability, so it makes perfect sense that reaching a given standard of inhabitability requires different energy inputs to overcome local obstacles.

Take water. A lot of power stations in the ME Gulf are correctly described as power and desalination plants. From the beginning, they are designed to fulfill both functions. Not just power, but desalination! If I recall correctly, somewhere in Saudi Arabia there is a water pipeline hundreds of kilometres long, rising far above sea level, which may hold some sort of record.

Whereas somewhere like the UK, water capture consists of surface reservoirs provided by natural lakes or concrete dams refilled by precipitation. The water still has to be treated at the end of its journey and at some stage pumped against gravity, but there is no corresponding ongoing production stage energy input - it is absent. Or more accurately, we get to freeload off nature to some extent.

yesplease is correct in that their existing ownership of this resource makes choosing PV and the like unnecessary. That is why in spite of recent investments in renewables research in those parts, the real cash is going into stuff like this. It is an easy choice to make, they do not lose much. And in this case, unlike in the case of Kuwait, this is a very small portion of Saudi oil production. But this type of thing does add up, and long term their actual output is not getting any higher, in spite of fanciful claims about capacity.

One small point though, it is by no means a valid assumption that these are peaker plants. In the case of Jizan at least, power and desalination, so by definition baseload. Others could be peakers, but this type of thing is commonly run as baseload over there. In the UK too, the proportion of gas turbines in the generation mix and increasing unreliability of nuclear is such that gas turbines are run without much variation. So we cannot really know one way or another without further information. But in the grand scheme of things I suppose it does not matter.

[yesplease]

One small point though, it is by no means a valid assumption that these are peaker plants. In the case of Jizan at least, power and desalination, so by definition baseload.

It's a likely assumption IMO, especially when considering that the expansion of desalination capabilities does not appear to be strictly linked to waste heat from the new gas turbine plant/s for handling the higher demand during summer.

JIZAN, 11 March 2004 — Minister of Water and Electricity Dr Ghazi Al-Qusaibi signed a SR334 million contract with a national company to expand Jizan electriccity station. The project includes building three gas turbines with a capacity of almost 200 megawatts.

The first unit is expected to start operating by summer 2005, just in time to help handle the higher demand for electricity. The second unit will be finished six months later and the third six months after that.

Al-Qusaibi said that the ministry wanted to have every house in Jizan connected to the network by the time its plan is completed. The ministry is also planning to expand Al-Shuqaiq desalinization plant to cover Jizan’s local need for water.

It doesn't seem like they're using the additional generating capacity to allow expansion of the desalination plant, but if you have information that shows otherwise, please bring it to the table!

[Twilight]

It doesn't seem like they're using the additional generating capacity to allow expansion of the desalination plant, but if you have information that shows otherwise, please bring it to the table!

I do not know. The text is open to interpretation. The two projects might be connected, or they might not. In either case energy consumption is rapidly increasing.

In the interests of completeness, I will copy a directly related exchange from another thread here:

At least you aren't clinging to the idea that a few peaker power plants in Saudi Arabia is honest proof of the land-export model...

It is proof of the demand side of Export Land. Proving the supply side is more difficult. Do that, and you have the argument nailed down. But I never even tried to prove the supply side. There are others who can make a better attempt than I can. I only seek to make a contribution to the debate, not win it single-handed.

The trends do seem to favour the Export Land Effect coming into play. Demand side is a done deal. You can't ask for a more solid set of trends than that, looking exponential too. Supply side is another story. Politics all too apparent there. In spite of the convincing arguments over at TOD, I suspect it is too early to say. It will be a while before I commit myself.

I only make claims I am reasonably confident have already been supported. Don't build me up into a prophet now.

[yesplease]

It's proof of the demand side of Export Land, until of course they switch over to NG. Since, like most trends, we can't say anything concrete about it until it's established itself as a trend, and clearly this specific example as a trend probably won't continue for much longer, by virtue of it's stated operation, it's viability as an example of this trend is suspect to say the least.

Like you linked, initial trends regarding gains in consumption may be indicative, but picking out a specific project that will only operate on oil for a couple years is definitely reaching. Why not state that people's cars breaking down is Demand Destruction In Action?

Micro instances do not macro behavior make! Unless of course we're appealing to d00m here on PO dot com... If SA's behavior regarding exports/consumption continue for a while based on the difference between 06/07 data, that's EL at work. But the vanishingly small use of some peaker stations that are slated to switch over to NG in a couple years? I don't thinks so...

P.S. Anything can look "exponential", especially if expressed as a collection of piecewise exponential functions, so don't fall into the herd mentality w/o looking at what you're saying first. It's unbecoming IMO.

[Twilight]

This is a single example, one of many that make up a trend already observed in EIA data. A single example does not of course make a trend, but many similar examples create one. This is one concrete example of such a component, which will make a contribution for a time even if not in perpetuity. And this is my only goal in this thread, not to preach doom, but to say in supplement of all of the people talking about Export Land in general terms - here is a name. It is a contribution, not a slam dunk. It is a supplement to the debate in something other than general terms. Anything else is what people want my position to be, not what it is, and I have no further wish to argue semantics.

[yesplease]

I think all the similar examples would have to be included in the trend, to make it the trend, as per EIA data. But, like I said before, it isn't proof of the demand side of Export Land, that would be trends as per the EIA data over a sufficient time period.

It is proof of the demand side of Export Land.

That being said, wth is up with posting in another thread about this, but not wanting to continue to debate it? Finicky much? Were you a cat in another life?

[Twilight]

Reuters: UPDATE 1-Iran halts fuel oil exports, stockpiles for winter

Relevant for the following details:

SINGAPORE, July 31 (Reuters) - Iran, a regular exporter of fuel oil to Asia, will halt shipments of the heavy fuel from August as it builds domestic stocks ahead of winter, and due to a heavy fourth-quarter maintenance season, industry sources said on Thursday.

Iran has been shipping out about 1.2 million tonnes of the residual fuel monthly since April. Rising domestic consumption and a lack of gas alternatives had also forced it to reduce exports over the past two winters.

"This is true, we will be concentrating on building up stocks for use at our power stations," a source familiar with the fuel oil export programme said.

Iran's decision came on the heels of Saudi Arabia's move to not resume spot fuel oil exports after its peak summer demand season, due to persistently strong requirements from domestic power plants and new secondary refining units.

Robust economic growth in Middle East oil-producing nations has spurred industrial demand for utility fuels, as power usage across the Gulf Cooperation Council (GCC) grows at an annual rate of around 8 percent.

Gas projects have also failed to keep pace with demand for power generation. Apart from Qatar, all Gulf states are short of gas.

EDIT: This presentation may be of interest. Pages 13 and 14 have particular bearing.