The impact of declining oil exports
Each year a dwindling global pool of exports has been generating ever greater competition among importing nations and has become a largely unheralded force behind record high oil prices, Cobb writes.
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He then tried the model out on two real world examples, the United Kingdom and Indonesia. Both countries were consuming about 50 to 60 percent of their own oil production at the time their production peaked, close to Brown's hypothetical case. But the U.K. had a higher production decline rate, -7.8 percent per year and a very modest 0.2 percent annual growth in oil consumption. Indonesia had a lower production decline rate than the hypothetical case, -3.9 percent, but a higher yearly increase in domestic oil consumption, 4.1 percent. Despite these differences, the results were quite similar to the hypothetical case. From its 1997 peak in oil production, Indonesia's net exports took only seven years to fall to zero. From the U.K.'s oil production peak in 2000, it took only six years for net exports to approach zero.Skip to next paragraph
Kurt Cobb is the author of the peak-oil-themed thriller, 'Prelude,' and a columnist for the Paris-based science news site Scitizen. He is a founding member of the Association for the Study of Peak Oil and Gas—USA, and he serves on the board of the Arthur Morgan Institute for Community Solutions. For more of his Resource Insights posts, click here.
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After modelling these two real world examples, Brown and his colleague Sam Foucher began tracking petroleum exporting nations with more than 100,000 barrels per day of exports (based on 2005 data). These 33 countries represented 99 percent of the globe's net exports at the time. Strangely, no official energy agency calculates global net exports. So, Brown and Foucher have had to compile data from the U.S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, and the BP Statistical Review of World Energy, a widely cited annual survey produced by oil giant BP. By the end of last year, three of the original 33 countries--Vietnam, Malaysia and Argentina--had dropped off the list and become net importers.
"We're losing one major exporter per year," Brown said. He expects that rate of loss to continue. He added that as a group, oil production in the 33 countries he tracks has hit a plateau, bouncing between 61 and 63 million barrels per day since 2005. If total production from exporting nations starts to fall, look for an acceleration in the decline of net exports. (Total worldwide oil production also appears to have been on a bumpy plateau since 2005.)
Brown said importers around the world are already being forced to respond to an ongoing decline in net exports. "We are on our way to energy independence," he joked. "Just not in the way that we expected." The United States and other developed countries are now being outbid by the developing world for oil and ending up with a declining share of a declining supply of exports. "While the recent rise in U.S. production will help, it will not save us," he added. That's because the rise is too modest to put much of a dent in imports which have declined primarily because Americans have simply cut back their consumption of gasoline and other petroleum products in the face of high prices.
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