[Armageddon]

This is something that seldom gets mentioned in mainstream news and is a ticking timebomb. When experts show their decline rates and their plateaus for oil, this doesn't get enough attention. It's called domestic consumption of oil producing nations.

Link

*edited for short link*

[AirlinePilot]

I have two words for you....

Export land

It's going to possibly double the predicted decline rates. Not very good news at all.

Armageddon,

I edited your post to make the link short.

[FlyLadyFan]

“Ten years from now, world capacity to produce oil could be 20 percent higher than today,” said Daniel Yergin, chairman of Cambridge Energy Research Associates.

I'd like to see the data he's basing that opinion on.

[Armageddon]

I have two words for you.. Export land It's going to possibly double the predicted decline rates. Not very good news at all.

Thanks AP. I am not sure if doubling the decline rates is the proper term, but it will definitely cut into the amount of available oil on the markets by a pretty good margin. Chavez and Amajanadeen ( or however you spell it ) , seem pretty determined to topple the US with their oil card. I am suprised Venezualla doesn't cut off the US and sell only to China and India. That would hurt.

[DantesPeak]

Since the title and first post are a little vague, these graphs from the article may help explain what we are talking about here:

Oil-Rich Nations Use More Energy, Cutting Exports




Mexico City at rush hour. A rise in car ownership is increasing the demand for oil in Mexico.

[Colorado-Valley]

Patience, Armegeddon, patience ...

It's all going to happen soon enough. Enjoy your last days of ancient sunlight.

[Armageddon]

I heard they still exported potatoes in Ireland during the great potato famine. Not sure the relevance here, just making a point. BTW, thanks Dante for the added info. Your input is always welcomed. You and other dude who post about the weekly oil and gas inventory thread are always insightful. Forgot his/her name, something Pup ?

[lorenzo]

Seriously, can anyone in here seriously believe that the international energy think tanks and the oil exporting countries and OPEC and governments from large oil importing countries, have overlooked this most basic of facts in their projections? I really can't.

In any case, if they haven't and the projections for oil export capacity must be revised downwards, then that's great news for all of us who can't wait to begin to decarbonise the energy sector and to clean up the atmosphere. I feel it ever more clearly: the Beginning is So Near!!

[Armageddon]

Seriously, can anyone in here seriously believe that the international energy think tanks and the oil exporting countries and OPEC and governments from large oil importing countries, have overlooked this most basic of facts in their projections? I really can't.
In any case, if they haven't and the projections for oil export capacity must be revised downwards, then that's great news for all of us who can't wait to begin to decarbonise the energy sector and to clean up the atmosphere. I feel it ever more clearly: the Beginning is So Near!!

Well, considering most of them including Saudi Arabia think Saudi Arabia will increase their production to 15 mbpd in the near future, No, I do not think they are not taking this as serious as it is. I have a feeling Mexico is aware of their fate though.

[essex]

More on the export land model

Yikes!

[TheDude]

Seriously, can anyone in here seriously believe that the international energy think tanks and the oil exporting countries and OPEC and governments from large oil importing countries, have overlooked this most basic of facts in their projections? I really can't.

Neither can I! It's just stunning...

In any case, if they haven't and the projections for oil export capacity must be revised downwards, then that's great news for all of us who can't wait to begin to decarbonise the energy sector and to clean up the atmosphere.

That's right - a corn stalk in every tank!

• Ethanol - Ethanol accounted for 2% of 2006 "total liquids" oil production. Its BTU contribution is about 70% of that of gasoline, so the sliver would be even smaller, if it were on a BTU content basis. To produce this tiny sliver of ethanol required 20% of the US corn crop, plus a large amount of fossil fuels and fresh water.

I feel it ever more clearly: the Beginning is So Near!!

Where'd you get that? Sounds like the title of a Grateful Dead bootleg.

[cube]

DantesPeak That is Mexico City. It is poor. we are truly FUBAR

I used to have this "naive" notion that poor countries didn't have traffic congestion because people couldn't afford cars and therefore everybody rode bicycles.

India


Pakistan

[thor]

“I don’t worry about the climate or shortages of oil in the world,” Mr. Guerrero said. “I just worry if gasoline prices go up.”

This is why I do not believe in happy endings. "Abandon all hope, ye who enter here" -- Dante

[Heineken]

This hits with the familiar sickening thud. Not that we haven't known about it.

Although it's not news, clearly it's yet another factor that hasn't been weighted heavily enough.

I tend to get more panicky about this one detail than almost any of the others.

[pup55]

http://peakoil.com/fortopic7101.html

The frequent viewers of PO.com have known about this since 2005. In those days I did not know how to work Imageshack, so no graphs, but you get the point.

The two important countries to watch were, and are, Mexico and Iran.

Both are set to become net importers in the 2010-2015 time frame.

Saudi is doubling every 10 years or so, but the population is so small that it will not make that much difference. Also, Kuwait is in the same boat.

I think if Ahmadinejad was smart, he would openly state it. He would come to the UN, and say, "you think we are a bunch of crazy people, but my population is 75 million and we need the oil. We will become a net importer of oil by 2012, and in this five year period we need to have nuclear power as a clean alternative."

The mexico guy, Calderon, has an even more serious problem but he is plainly too afraid to say it in so many words. Not only are his oilfields are in decline, but his country is being overrun by $1000 junkers shipped down from the US. Mexico oil consumption increased by 3% beween 04 and 05, but went down a little in 06, so maybe the high prices are having an effect. Or, possibly, 10 million of their citizens driving around in the US has made a dent.

[MC2]

Beijing.

Even the commies are drunk on dyno...

[Andrew_S]

I think if Ahmadinejad was smart, he would openly state it. He would come to the UN, and say, "you think we are a bunch of crazy people, but my population is 75 million and we need the oil. We will become a net importer of oil by 2012, and in this five year period we need to have nuclear power as a clean alternative."

Isn't there some Iranian energy minister or ex-minister who has been fairly open about Iran going to peak? Or maybe some head of their oil company (I don't remember the name).

[pup55]

Gholam Hossein Nozari is Iran's current oil minister.

You might be referring to Ali Samsam Bakhtiari, who recently passed away, former high ranking official of the Iranian oil industry, and outspoken PO proponent.

[Twilight]

If Iran wanted to set the cat among the pigeons, it would not only discuss Export Land at the UN, but say what happened in 1988 with OPEC reported reserves.

They could destroy the world with one carefully crafted announcement on that subject more thoroughly than they could with a nuke test - and for free. The fact that they have not done so suggests they are not in fact evil.

I view the "unhelpful" subsidy of domestic oil consumption by oil exporters a little bit differently to most observers, however. I believe that historically, subsidised fuel has been an enabler of exports. This sounds like a contradiction until you consider the condition of most of the countries in question. For an authoritarian state with a large poor population, entertaining highly visible energy exports and at the same time forcing global market pricing on the domestic market would be suicide. While inefficient domestic consumption would be held in check, the eventual effect on exports would be counterproductive - a reduction or cessation through unrest or political instability.

I view the historical role of subsidised fuel as governments fulfilling their part of an informal understanding with their subjects, namely that while revolt will have harsh consequences, there are other reasons of rational self-interest to acquiesce. Subsidised fuel is appeasement. It is a pragmatic response to local conditions, and it works. However much proponents of free markets dislike it, this status quo has been maintained for a long time to their benefit. Pragmatic thinkers understand that the world contains too many inconvenient facts for a truly free market. Simply put, the first revolution would kill it.

I take care to say "historical role" because it is clear this is breaking down. The benefits of such appeasement are not without limit. Exponential growth starting from a low base eventually reaches titanic scales. Subsidised fuel has encouraged consumption in oil exporting nations, starting from a low base. We know what happens eventually, when supply fails to keep pace or descends to meet it. That's what we call the Export Land Effect today.

In summary, subsidised fuel might be unfortunate now, but the past would have been less pleasant without it. Credit where it is due.