[AirlinePilot]

Chavez isn't crazy, and his country isn't communist. He has simply fallen into a pretty standard problem of those who think they can beat basic economics.

I'd say Chavez is near certifiable. He's a megalomaniac, not very well educated, and is so socialist in his agenda you might as well be in a communist country if you live in Venezuela.

How do you reconcile his latest tidbit with the Earthquake weapon he claims we supposedly used against Haiti?

You gotta love the Parrot!!!

chavez-parrot.jpg

[shortonsense]

How do you reconcile his latest tidbit with the Earthquake weapon he claims we supposedly used against Haiti?

How dare you question the tectonic weapon! I will have you know that perfectly valid websites give it the same consideration that we give peak oil!!


Tectonic penetration missiles no less!! It must be true...its on the WWW!

http://uswgo.com/i-believe-the-incident ... weapon.htm

[GoghGoner]

I'd say its basic economics, at least on a macro scale, that as the price paid for a resource climbs, a producing nations economy(especially one so driven by oil) will heat up. it follows that internal consumption will also grow, even if its at a low rate, there will still likely be growth. Pointing to Chavez as an example I'd call a serious anomaly, a short term issue, and far from the norm.

We should not get hung up on whether consumption grows or not (I am not saying you are). The importance of ELM is that if X is producing 2 MBD (million barrel per day) and exporting 1 MBD then their production declines by 1 MBD their exports go to 0 MBD.

So exports drop by 100% when production falls by 50%, with consumption being flat.

[mcgowanjm]

I'd say its basic economics, at least on a macro scale, that as the price paid for a resource climbs, a producing nations economy(especially one so driven by oil) will heat up. it follows that internal consumption will also grow, even if its at a low rate, there will still likely be growth. Pointing to Chavez as an example I'd call a serious anomaly, a short term issue, and far from the norm.

Basic Economics fails on any level when talking
about Energy.

The price paid is totally linked to how much Energy
is expended to get the Energy from Source to Use.

EROEI

There is no way to Subsidize this Chain of Events.
Which is why Every Oil Watershed Event has been
Exactly Mirrored by a SocioEconomic Event of
Equal Proportion.

[mcgowanjm]

Tyler_JC

Post subject: Re: Short's argument thread
New postPosted: Wed Oct 21, 2009 5:27 am

Moderator

Joined: Sat Sep 25, 2004 7:00 am
Posts: 5371
Location: Boston, MA

The question must always be asked, expensive relative to what? Is oil expensive relative to wages? Gold? Pork bellies?

http://blogs.oilandgasinvestor.com/gues ... -20091.jpg

Note the MAGIC taking place at 1985. 1985 is The Year
when the US takes the Step past the Point of No Return.

1985 shows up repeatedly where 'And then, Johnny, a Miracle
occurred'. To 'Fix' the graph, merely take out the 3% 'of GDP'
Drop from 1985/86.

[AirlinePilot]

I'd say its basic economics, at least on a macro scale, that as the price paid for a resource climbs, a producing nations economy(especially one so driven by oil) will heat up. it follows that internal consumption will also grow, even if its at a low rate, there will still likely be growth. Pointing to Chavez as an example I'd call a serious anomaly, a short term issue, and far from the norm.

We should not get hung up on whether consumption grows or not (I am not saying you are). The importance of ELM is that if X is producing 2 MBD (million barrel per day) and exporting 1 MBD then their production declines by 1 MBD their exports go to 0 MBD.

So exports drop by 100% when production falls by 50%, with consumption being flat.

Agreed. I think its also important to note that since we may not "technically" have peaked Net Oil issues wont be really unmasked except on a small scale until we actually see global declining production. Depending on who you listen too that may or may not be happening now. I tend to believe we are on the cusp of this presently.

Another thing to address is once this becomes evident to what extent do exporting nations begin to hoard? Does that even happen? We reach some sort of crossover point where it becomes even more lucrative to do that in a world declining production situation. In effect the big end users (importers) become hostages of their use.

[gollum]

What isn't discussed much, is the tendency that net exporters will probably have to hoard their oil when it becomes apparent the oil will be worth more in the future as peak oil becomes more apparent.

[Graeme]

Another Take On Peak Oil: Exports, Not Production, Indicate Crisis

According to Brown’s ELM analysis from 2008, net oil exports from the world’s top five producers have already peaked. A graph supporting this fact showed the price of oil against the average annual net oil exports from Saudi Arabia, Russia, Norway, Iran, and the United Arab Emirates. As prices rose, these countries’ cumulative net oil exports also rose—presumably out of the desire to cash in one increasing demand indicated by higher prices. But in 2005, crude oil exports from these countries dropped sharply. The decline continued even as prices skyrocketed on their way to the all-time peak of $147 per barrel in July of 2008.

heatingoil

[AirlinePilot]

ELM is evolving...westexas over at TOD has this post today....

"ELM 2.0 takes into account Chindia's rapidly increasing net oil imports, which went from 4.6 mbpd in 2005 to 6.0 mbpd in 2008 (EIA), a rate of change of +9.0%/year. Extrapolated out to 2010, they would be net importing about 7.2 mbpd. Expressed as a percentage of net exports from the (2005) top five net exporters, Chindia's net imports increased from 19% of the top five in 2005 to 27% in 2008, to a projected 33% in 2010. One can see where the trend is headed, as combined net exports from the (2005) top five showed a -2%/year rate of change, from 2005 to 2008.

But let's look at the Net/Net Exports from the top five, after subtracting out Chindia's net imports. In 2005, the Net/Net (2005 top five) number was about 19.4 mbpd. Assuming 22 mbpd Net Exports from the top five in 2010, and assuming 7.2 mbpd net imports into Chindia, the Net/Net number would fall to 14.8 mbpd in 2010.

Now, Sam's best case for the (2005) top five is that their net exports would be down to about 15 mbpd in 2018, and if we extrapolate Chindia's net imports, they would be approaching 15 mbpd in 2018, resulting in a projected Net/Net number of zero. If we do some "Cowboy Integration" (19.6 mbpd X 365 Days X 13 years X 0.5), it suggests that estimated post-2005 Net/Net Top Five Cumulative Exports are about 46 Gb. At the end of this year, the projected remaining Net/Net (2005) Top Five Cumulative Exports would be down to about 22 Gb, a five year Net/Net depletion rate of 15%/year. This is ELM 2.0."

Or more simply put......

Several Points: (1) Saudi Arabia is increasingly favoring China & India as their prime customers, with the US fading fast; (2) The (2005) top five account for about half of global net oil exports; (3) Closer to home, in the bottom half of 2005 net exporters, combined net exports from Canada, Mexico & Venezuela dropped by 20% in just four years, from 2004 to 2008; (4) The crux of the ELM 2.0 argument is that developing countries will continue to outbid developed countries for declining oil exports.

IMO, if my original post above isn’t just about the scariest thing that you have ever read, you don’t fully understand the problem.

Let’s try it this way. If we extrapolate recent trends, Chindia’s net imports in 2018 (eight years from now), expressed as a percentage of combined projected net exports from the (2005) top five net exporters, will be approaching 100%, leaving nothing for non-Chindia oil importers.

Now I understand that recent trends may not hold, but we all know how growing third world demand is going to be a problem. This is alarming stuff and why ELM is so important an issue to grasp.

[AirlinePilot]

The effect of ELM 2.0 on US imports since 2006

[AirlinePilot]

AP. Westexas's ELM summary , next to that chart , is very scary.

Oh not to worry I'm sure the local cornies will be along shortly to tell us how this cannot be correct.

[Revi]

China's growth was around 9%, while we shrunk by 2 or 3% even according to official statistics.

We are already experiencing the effects of the export land model.

Who are our greatest oil suppliers? Canada and Mexico, both of which are sending us less oil already.

Get psyched.

It's happening.

[shortonsense]

The effect of ELM 2.0 on US imports since 2006

So....ELM 2.0 says that after 33 years of growth in the US the natural consequence is....we aren't importing any more crude now than we did 20 years ago? Yet we managed to grow the economy 2.5X ?

So....the graph means....we became much, much more efficient in how much GDP we can create for every barrel of crude imported?

Okay...works for me....but I'm still trying to figure out why you are now scared....did someone deny you some avgas for your plane because of the horrifying information contained in this graph?

[gollum]

The effect of ELM 2.0 on US imports since 2006

That is one very scary chart, to me it is becoming clear that although the financial shenanigans are a large part of our problems there may be other forces at work.

[AirlinePilot]

Short,

If you cant understand the implications of what that chart may be showing and how exporting nations are measurably exporting less right now than they were just a few years ago, then there really is no discussion. It's obviously beyond your worldview to comprehend.

[AirlinePilot]

So....ELM 2.0 says that after 33 years of growth in the US the natural consequence is....we aren't importing any more crude now than we did 20 years ago? Yet we managed to grow the economy 2.5X ?

So....the graph means....we became much, much more efficient in how much GDP we can create for every barrel of crude imported?

No, the chart clearly shows only ONE THING. US imports are trending downward in the last 3 years. Your jumping to some foregone conclusion about efficiency without backing it up.
I frankly doubt we became "much, much more efficient".

[gollum]

So....ELM 2.0 says that after 33 years of growth in the US the natural consequence is....we aren't importing any more crude now than we did 20 years ago? Yet we managed to grow the economy 2.5X ?

So....the graph means....we became much, much more efficient in how much GDP we can create for every barrel of crude imported?

No, the chart clearly shows only ONE THING. US imports are trending downward in the last 3 years. Your jumping to some foregone conclusion about efficiency without backing it up.
I frankly doubt we became "much, much more efficient".

From what I see on this chart, they are trending down a tremendous amount, much more than I suspected. Really considering the economy what we may be looking at as Americans is quite possibly one of the worst case scenarios discussed as little as two or three years ago.

[TheDude]

Those EIA charts are pure snapshot. You can't tell much from just looking at one segment of the system. This chart took me about 5 minutes to make.

Domestic production is trending up a little; between that and demand retraction the decline in imports isn't surprising. Rapier attempted to pin down how much ethanol was contributing; hard to say. I always thought we should know on a purely volumetric basis, forget the BTUs for now. Not that they don't matter, people should be having to fill up more often now with E10; but let's see how gasoline isn't needed at terminals now. Forget if he covered that, or if I did, or...

Efficiency gains are somewhere in there. Plus this driving downturn, which started way before the recession, although gasoline demand hasn't sunk anything like other products.