The Export Land Model

[AirlinePilot]

I'm a doomer, but it would be great if you were right, and I hope you are.

The obvious consequences of PO+5 not being enough to convince you?

The reason you get so much friction short is because of posts just like this last one. Face it we really haven't peaked yet. You can point to the "prophets" all you want but normally functioning folks like you and I would admit "THE PEAK" has not necessarily happened yet. Light Sweet? probably...Total liquids?..probably not, but very close....which one matters most? Good question...but I can tell you with a lot of certainty that timing will be everything and we are doing a rather poor job of replacement and conservation to date.

[AirlinePilot]

I posted a graph above from a Excel workbook downloaded from the EIA this morning. The data in that workbook only goes to 2008. --snip-- So that answers my question why shortonsense had that idea. Interesting that EIA's spreadsheet does not correspond to the graphic AP posted.

Our charts are different time scales and different plots. Yours is each year cumulative..mine is showing monthly plots and you'd have to zoom in and add the totals for each year to get what yours shows...the points are not resolved enough to actually do it though. Thats why it looks different. Looking at charts its important to understand the parameters.

Both show declining US imports recently. Your chart more accurately represents the totals though and negates shorts point about "efficiency" quite well.

[shortonsense]

The reason you get so much friction short is because of posts just like this last one. Face it we really haven't peaked yet.

Says you. Ruppert, Simmons and Deffeyes disagree. Don't blame the messenger.

You can point to the "prophets" all you want but normally functioning folks like you and I would admit "THE PEAK" has not necessarily happened yet.

There is an entire thread dedicated to the uncertainty about the peak event. If I recall correctly, your estimate on that uncertainty was near zero, a year or two tops. Mine was larger, a decade or two, based on all the other places which peaked, waited a decade or two, and then peaked some more. The Prophets have picked their date and good or bad, its their claim. You do not have to like the logical conclusions from their claim, but you not liking these conclusions doesn't change their claim. They said 2005. I have not yet found any reference where they retracted these claims. If and when they do, I shall modify my comments accordingly. Of course...if they do, they'll be right back in the same boat and Colins 20 years of guessing as well, and will have completely validated my comments in the Argument Thread as well. So I am as interested in their reversal as you are, but for different reasons.

[mcgowanjm]

May, 2005. Now we're at the 'how much WTI type Crude we can manufacture/produce regardless of EREOI'.

Remember this from the Wayback Machine?:
Nation needs legislative action to spur refinery construction ...
Sep 9, 2005 ... Once 13 refineries operated in Oklahoma; today only five are working in ... contains some incentives for companies to build more refineries, ...
findarticles.com/p/articles/mi_qn4182/is.../ai_n15370817/

Today we're closing them down. Per Memmel, the only place to make money is pulling the stuff out of the ground. Every other point is a Money Loser.

A guarantee that the drop into the Olduvai will be less like a luge and more like a horse falling off the Grand Canyon Trail.

[AirlinePilot]

The refinery business will come back when we work through the inventory a bit and gasoline prices are allowed to climb. Otherwise we are in for a very big wakeup call. Shutting down refineries right and left, losing refining capacity..its ok for the moment, but when we need them, where will they be? If they cant make money, they go out of business.

I guess there is some hope for demand to be low enough for that paradigm to succeed, but frankyl I doubt it, especially with any sort of economic recovery no matter how small it is.

[Graeme]

Peak Oil Demand Is Coming, But Here's Why It's Not Good News

When oil crossed $120 a barrel for the first time in May 2008, oil cornucopians knew they were in trouble. Prices had quadrupled in just five years, yet had failed to bring new production online. Regular crude had flatlined around 74 million barrels per day (mbpd). The case for peak oil was looking stronger with every new uptick in crude futures.

The following month, prominent peak oil critic and cornucopian Daniel Yergin of IHS-CERA changed his stance: The peak oil threat would be neutralized by peak demand. Gasoline consumption had peaked in the U.S. and Europe, he argued, due to the combined effects of increasing efficiency, biofuels, and the recession.

The first was a Reuters report that the last quarter of 2009 had “wiped out” the equity of Mexican state oil monopoly Pemex, leaving it $1.4 billion in the negative. Falling crude output, falling refining margins and a burgeoning dependency of the state on its revenues had squeezed it to death.

Not only did the report offer further confirmation that the oil export crisis has arrived, but it also confirmed my growing suspicion that the oil production everyone has assumed will come online in five to ten years might, in fact, fail to materialize. Negative equity companies have a hard time raising capital for new exploration.

As we enter the post-peak phase of global oil supply sometime around 2012-2014, the price that heavily import-dependent countries like the U.S. would have to pay for that marginal barrel will become increasingly intolerable. In a weakened economy, $100 a barrel (or less) could be the new $120.

The true import of peak oil, therefore, may not be sustained high prices, but economic shrinkage. Demand will be destroyed long before oil gets to $200 a barrel, but it will not be destroyed by improved efficiency.

businessinsider

[pstarr]

I don't have time for more punditry and I am not familiar with the site, but I am always interested to hear what people have to say. The comment section is very revealing--the people know about Cantarell, export land model, and the inherent limits of alternative. energies. People are waking up and that is as frightening as people remaining in denial. It is emotionally troubling to grasp the implication of primary-energy decline in an economy that has only one mandate---growth.

[mcgowanjm]

The refinery business will come back when we work through the inventory a bit and gasoline prices are allowed to climb. Otherwise we are in for a very big wakeup call. Shutting down refineries right and left, losing refining capacity..its ok for the moment, but when we need them, where will they be? If they cant make money, they go out of business.

I guess there is some hope for demand to be low enough for that paradigm to succeed, but frankyl I doubt it, especially with any sort of economic recovery no matter how small it is.

Refineries will/are coming back, but at the end use point:
China/India/Brazil.

Every move Hillary makes is based on that above sentence,
and she just finished the most disastrous Latin America
tour in State Dept History. And there will be no recovery-recovery to what?Hillary's Constituents:

If you want to see how quickly credit is contracting take a look at this:

http://www.mybudget360.com/wp-content/u ... credit.png

[AirlinePilot]

Chindia's Net Imports

From 2005 to 2008, Chindia's (China & India) net imports increased at about 9%/year (EIA). Expressed as a percentage of combined net exports from the (2005) top five net exporters, Chindia's net imports went from 19% in 2005 to 27% in 2008 (probably to about 33% in 2010). If we take a best case scenario for net exports from the (2005) top five and project Chindia's current rate of increase in net imports out to 2018, then in 2018, Chindia's net imports would be equivalent to 100% of projected (2005) top five net exports.

But have we ever seen a sustained near double digit rate of increase in net oil imports over a long time period?

From 1949 to 1977, the rate of increase in US net imports was 11.8%/year, exceeding the current rate of increase in Chindia's net imports. Of course, until 1973, oil prices were fairly stable and this time period (1949-1977) corresponded to generally increasing global net exports, but on the other hand Chindia has shown increasing consumption and net imports, even as oil prices rose at 20%/year from 1998 to 2008.

EIA (PDF) production, consumption, net imports chart for the US:

http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_4.pdf

Incidentally, the rate of increase in net imports from 1949 to 1970 was 11%/year, but US net imports really kicked up after US production peaked in 1970, going from 3.2 mbpd in 1970 to 8.6 mbpd in 1977 (and then entering a period of decline, before resuming the increase in later years). But in any case, the rate of increase in net imports from 1970 to 1977 was 14%/year, after US production peaked in 1970. Over the same time period, 1970 to 1977, US oil prices also rose at 14%/year (EIA).

Note that two factors contributed to the late Seventies decline in US net oil imports--falling consumption and rising production from Alaska, as the Alaskan pipeline was finished. It would appear that the all time annual record high for US net imports was in 2005, at 12.5 mbpd.

Recent EIA data show that Chinese oil production is flat, while Indian oil production is down slightly.

[TheDude]

Copycat.

[AirlinePilot]

I specifically talked to Jeffrey about this and he has allowed me to post his relevant stuff right here...just so you know

[TheDude]

I specifically talked to Jeffrey about this and he has allowed me to post his relevant stuff right here...just so you know

Oh great, double posting the writings of a guy who's got a problem with tautology in the first place...

Keep 'em coming, that's fine. Built up a Net Exports database yesterday from Stat Review numbers. Cripes, talk about a chore. Had to line up the same countries for Prod and Cons, make sure they're the same, erase those who weren't in both. There's a way to do this without editing that spreadsheet pros know about, I'm sure. Filters should work. Try that next time.

Top 10 Exporters 1965-2008, average YOY diff:

Mexico 25
Algeria 26
Canada 27
United Kingdom 31
Azerbaijan 32
United Arab Emirates 52
Russian Federation 53
Norway 55
Kazakhstan 56
Saudi Arabia 158

In other words, the average change year to year of Norway Net Exports over the years was 55 mb/d.

Bottom 10:

US -237
China -98
Other Europe & Eurasia -48
India -45
Venezuela -34
Other Middle East -32
Other Africa -22
Other S. & Cent. America -16
Italy -14
Indonesia -13
Thailand -10

Yeah, USA #1!!!!!!!!!!!

Also discovered that "Other Europe & Eurasia" is BP code for the USSR, by and large. Hmm, that's not very reassuring, looking at the Top 5 slackers there...

[GoghGoner]

In other words, the average change year to year of Norway Net Exports over the years was 55 mb/d.

55 mb/d kb/d.

Interesting way to look at exports/imports -- made me realize who really upped their exports during the Seventies and Eighties. Mexico had about 30 good years. Suadi Arabia had about 40 good years

[TheDude]

In other words, the average change year to year of Norway Net Exports over the years was 55 mb/d.

55 mb/d kb/d.

Interesting way to look at exports/imports -- made me realize who really upped their exports during the Seventies and Eighties. Mexico had about 30 good years. Suadi Arabia had about 40 good years

Saudi.

Here's the whole list:

US -237
China -98
Other Europe & Eurasia -48
India -45
Venezuela -34
Other Middle East -32
Other Africa -22
Other S. & Cent. America -16
Italy -14
Indonesia -13
Thailand -10
Other Asia Pacific -7
Brazil -7
Romania -6
Peru -1
Australia -1
Egypt 1
Turkmenistan 2
Kuwait 5
Colombia 6
Denmark 7
Ecuador 7
Malaysia 7
Uzbekistan 8
Argentina 8
Iran 21
Qatar 24
Mexico 25
Algeria 26
Canada 27
United Kingdom 31
Azerbaijan 32
United Arab Emirates 52
Russian Federation 53
Norway 55
Kazakhstan 56
Saudi Arabia 158

[truecougarblue]

Dude, in your opinion which are the next five countries to slip from net exporter to net importer?

[TheDude]

Dude, in your opinion which are the next five countries to slip from net exporter to net importer?

Just eyeballing declines on the list I've generated, Argentina, Denmark, Egypt, Mexico, and Uzbekistan look like they're on the way out, within about 5 years max. Maybe later I'll sort out the net exporters - there aren't many - and build a chart.

[truecougarblue]

Thanks dude.

[TheAntiDoomer]

Someone with photoshoping capabilities should label the man in this pic Jeffrey Brown and write "Export Land Model" on the horse....

[pstarr]

Someone with photoshoping capabilities should label the man in this pic Jeffrey Brown and write "Export Land Model" on the horse....

So you admit to lacking fundamental photoshop skills. If you were only so honest regarding geology

[AirlinePilot]

Yeah so westexas is the boy who cried wolf..SO WHAT? In the near term this IS going to be the big issue. I suspect it becomes very serious after we start decline, though he seems to think its a big deal now.

This will be the main problem with which we all have to deal with due to the inability to move significantly away from the peak/plateau we are currently on. I will follow what he says far quicker than listening to corny trolls who think reserves magically grow on trees and technology always comes to the rescue.