Export Land Model - 10-7-2010 Aspousa TrackBNetExports Brown J

8/6/2019 Export Land Model - 10-7-2010 Aspousa TrackBNetExports Brown J

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Peak Oil Versus Peak Net Exports--Which

Should We Be More Concerned About?

Jeffrey J. Brown, Samuel Foucher, PhD,

Jorge Silveus


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Three Key Topics

! Peak Oil Versus the Export Land Model! Actual Net Export Decline Case Histories! Projections for the (2005) Top Five Net

Oil Exporters and for Global Net Oil

Exports

Note: Principal data sources are the EIA and BP data bases


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Two Peak Production Case Histories:

Texas and North Sea Crude Oil Production

1999 North Sea Peak

1972 Texas Peak


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Texas Crude Oil Production (1962-1982) and North

Sea Crude Oil Production(1989-2009) Versus US

Oil Prices


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Texas and North Sea Exponential Rates of Change

(ROC) Relative to Their Production Peaks

Texas

North Sea

RateofChange(%/year)

Texas production fell at 3.7%/ year from

1972 to 1982, resulting in 1982 production

being 31% below the 1972 rate.

North Sea production fell at 4.8%/year from 1999 to

2009, resulting in 2009 production being 38% below the

1999 rate.


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Three Primary Factors That Control

Net Export Declines

! Consumption as apercentage of production atfinal production peak

! Rate of change inproduction

! Rate of change inconsumption


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Export Land Model (ELM)


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Exponential Rate of Change in Production,

Consumption and Net Oil Exports by Year, Relative to

Final Production Peak, for Export Land

!"#$%&

!#%$%&

-40

-30

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0

10

0 1 2 3 4 5 6 7 8 9

%/year

Year

Net Exports rate of change

Production rate of change (-5)

Consumption rate of change (2.5)


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Export Land

Net Export Fuel GaugeTotal Post Peak Cumulative

Net Exports (CNE)

Post Peak CNE 60%

Depleted 3 Yearsinto a 9 Year Decline

Annual Volume Down by40% From Peak.


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Three Primary Characteristics of Net

Export Declines:! The net export decline rate tends to exceed the

production decline rate

! The net export decline rate tends to acceleratewith time! Net export declines tend to be Front-end

loaded, with the bulk of post-peak net exports

being shipped early in the decline phase


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12/33

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Net Exports


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UK


Net Exports (CNE)&

Post Peak CNE 53%

Depleted in 2 YearsAnnual Volume Down by

27% From Peak.


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Indonesia


Net Exports (CNE)&

Post Peak CNE 53%

Depleted in 3 YearsAnnual Volume Down by

27% From Peak.


15/33

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16/33

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17/33

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Net Exports


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Actual and Projected Production, Consumption, and

Net Exports for Saudi Arabia

(Projections Based on Data Through 2006; 2007-2009 Actual Data Points Circled)

Consumption

Production Net Exports

Dashed Lines are 95% Confidence IntervalsDashed Lines are 95% Confidence Intervals


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Saudi Net Exports (2002-2008)

Versus US Oil Prices&

2002

2006

2008

2007

2005

2004

2003


20/33

Dashed Lines are 95% Confidence Intervals

Production

Consumption


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Dashed Lines are 95% Confidence Intervals

Net Exports


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Actual and Projected Production, Consumption, and

Net Exports for (2005) Top 5 Net Exporters&

Dashed Lines are 95% Confidence Intervals Dashed Lines are 95% Confidence Intervals

Production

Consumption

Net Exports


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Projected (2005) Top 5 Net Exporters


Net Exports (CNE)&

Post Peak CNE 53%

Depleted by End of 2012Annual Volume Down by

34% From Peak.


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Canada

Sum

Rising Net Oil Exports from Canada have not even been able to offset thedecline in Net Oil Exports from Venezuela. Their combined Net Oil Exports

have fallen from 3.8 mbpd in 1998 to 2.8 mbpd in 2009.


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Total Oil Consumption (1998-2009) By Five Net Oil Importers

China, India, Kenya, Morocco & the US

(1998 consumption = 100, EIA)

India

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Morocco

Kenya

China


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Global

2005 Net Oil Exports

(Top 33): 46.0 mbpd

Projected 2015 Global

Net Oil Exports

Scenario One: 41.6 mbpd(Down 9.6% from 2005)

Chindia

11%

Non-Chindia

40.8 mbpd

Chindia29%

Non-Chindia

29.5 mbpd (Down28% from 2005)


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Scenario Two for 2015Assume Production Declines 5% from 2005 level (0.5%/year),

Consumption Increases to 19.6 mbpd

! 53E?PQKED+&'@$"&S^


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Global

2005 Net Oil Exports

(Top 33): 46.0 mbpd

Projected 2015 Global

Net Oil Exports

Scenario Two: 39.5 mbpd(Down 14% from 2005)

Chindia

11%

Non-Chindia

40.8 mbpd

Chindia31%

Non-Chindia

27.4 mbpd (Down33% from 2005)


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Global Net Exports Summary

If we extrapolate the 2005 to 2009 rate of

increase in consumption by the exportingcountries out to 2015 and if we extrapolate

Chindia's 2005 to 2009 rate of increase in netimports out to 2015, and if we assume a very

slight production decline among the exporting

countries (0.5%/year from 2005 to 2015), then

for every three barrels of oil that non-Chindiacountries (net) imported in 2005, they wouldhave to make do with two barrels in 2015.


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Whats the Good News?

Our forecast is that the US, and many

other developed oil importing

countries, are well on their way to

becoming "free" of their dependence

on foreign sources of oil--just not in

the way that many people anticipated.


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Electrified Transportation in San Angelo, Texas, Circa 1908

Documents

Export Land Model - 10-7-2010 Aspousa TrackBNetExports Brown J