If you mean LNG, then I'll be posting something on Australian Gas real soon now (which might still be a couple of weeks away, at my current slow rate of progress).

We are likely to give everything a go. In a report on ABC TV last week, Linc Energy are trying to produce liquids fom coal seam methane. The alrming thing is that they were going to ignite the coal in situ, pump in air to keep the fire going which in turn provides a heat source to drive coal gas and steam out through a well. The resulting liquid was touted as clear "diesel" which could be further refined.

If this works, one has to wonder how long our export coal industry will last.

Matt Simmons, who inspired my work, started talking about rapidly rising consumption in exporting countries in the same time frame.

Aeldric, you have discovered that ELM is already 'alive and well' - as you have found, it's already in the data, you just have to search it out, no longer just a theory.

I would just add that you have a chart there called 'Australia's Oil Consumption and Imports', this shows the 'import land' problem very well.

Once an importing country that has some production of it's own peaks, it's increased demand % for imports suddenly becomes = (total consumption growth + the decline rate of local production) and sadly this is often a massive increased demand, as in the case of Australia.

However, spare a thought post 'world peak of net exports' for those countries where ~100% of consumption is imported - that is every country in the Europen Union except two!!!.

At the moment 'world net exports' are down ~3% from a peak in late 2005, this has allowed the 40 or so 'net exporting' countries to continue to grow their consumption while world all liquids production has been flat!

Looking on the bright side, at least you will easily meet the UN required 30% reduction in CO₂ emissions by 2020 from oil!

Maybe now you can see why there has been so much emphasis on climate change emissions - working towards a planned defined goal (IMO too late and unreachable) rather than a catastrophic economic brick wall.

Hi WestTexas,

How did you calculate the growth and decline rates? For instance, the Saudi rate you quote is not the 2005 to 2006 rate. Is it the average growth (or decline) over some number of years going back? Thanks.

Saudi Arabia’s initial 10 year projected production decline rate is -2.7%/year ±2% per year. The projected rate of increase in consumption is +4.4%/year ±2% per year. Their initial 10 year projected net export decline rate is -4.7%/year ±4%. Our middle case shows Saudi Arabia approaching zero net exports in 2031, within a range from 2024 to 2037.

Actually, Stuart, at least in the past, has generally dismissed the concept.

And in a larger sense, until fairly recently, even in Peak Oil circles, almost no one (with the exception of some people noted above) was paying any attention to net oil exports.

As Dr. Bartlett noted, we have trouble with the exponential function. This is perhaps doubly true with the net export phenomenon--where the combination of an exponential decline in production and a generally exponential increase in consumption results in vicious net export decline rates. While whether Saudi Arabia has peaked continues to be a hot topic of discussion, the amount of oil that they actually delivered to the market in 2007 probably declined at around 10%, versus about a 5% drop in 2006.

We need confirmation for the theories that everybody accepts too, not only for the controversial ones.

Otherwise, we wouldn't know if we were really right, and could miss some important insights.

Isn't this a big load of duh?

Depends on your understanding of "duh"...

I thought the piece on 4 billion cars was intended as humor.

"Duh", I said when I read it, "A big load..."

If we agree on validity of the Export Land Model, shouldn’t we be working to understand effects of the Import Land Model?

Import Land Model- A model of the effects of the decline in oil available for consumption to discretionary sectors of an importing nation’s economy as a result of the Export Land Model and simultaneous domestic consumption increases by non-discretionary sectors of the economy. This combination of declining imports and increasing domestic consumption by a significant fraction of the domestic economy leads oil available for all other sectors of the economy to decline at a far faster percentage rate than oil availability itself is falling to the importing nation.

Assume that an oil importing country – Import Land – produces 10 mbpd, consumes 20 mbpd and imports 10 mbpd. In Import Land, 25% of all oil is consumed by the government (18%), energy production (6%), and agricultural (1%) sectors of the economy, or 5 mbpd total (WAG, Reference needed).

Over a five year period, imports drop by 50% to 5 mbpd due to the effects of the Export Land Model. Meanwhile internal production drops by 20% to 8 mbpd. This leaves Import Land with 13 mbpd to consume, a drop of 33% over 5 years (9%yoy).

The government of Import Land will be under severe societal stress to keep energy, food, and governmental services working. If they somehow maintain these sectors without increasing internal consumption, it will still leave only 8 mbpd for the discretionary economy, a decline from 15 mpbd over 5 years (13%yoy).

This example conservatively assumes no growth and low estimates in non-discretionary spending, low Export Land and Import Land oil production decline rates, and starts with a nation that only imports half of its oil. All are likely (or certainly) optimistic for many Import Lands.

Clearly the economic impact on the discretionary economy will be far more severe than is suggested by the Export Land Model.

Isn't this a big load of duh?

Aeldric posted this on TOD:ANZ and it was Australia specific. Most of the discussion on TOD relates to how PO will affect the US or Europe or Chindia and very little thought ever given to how it will affect smaller countries or regions.

I thought it was a great post and and in no way deserved your "Duh?" comment. As an Australian it certainly shook my tree.

It is a very telling illustration for a particularly large island, apologies to Poms, which makes it easier to do. It might 'wake' people up, or allow those so inclined or capable to make predictions and take action.

Global renewable Energy, for Australia:

link

I think this post brings to light the interplay of several oil availability factors in an important way. Sure, ELM is a 'duh' to anyone who looks at it even cursorily. But the layers of effects as discussed herein by Xeroid, garyp, memmel and others helped take my understanding of ELM's consequences to a deeper level. So thanks to all. Here's my contribution. Essentially, the dynamic of increasing consumption and declining extraction works on both ends. That is, it works to decrease net exports from Export Land more rapidly than would gross declines in extraction or increases in internal consumption on their own, and it works to increase Import Land's net desired imports more rapidly than would either dynamic on its own. Some countries were doubtless never net exporters, but we're all well familiar with the fact that the US was once the supplier to the world. The US, in effect, is simply deep into the effects of its own experience with declining net exports. So the end result is that as the gaping jaws of net desired imports (NDI) open wider, the jaws of export land are snapping shut. Imagine yourself a baby bird, but the wider you open your mouth to be fed by your parent, the tighter they close theirs and refuse your need. The knock-on effects as discussed herein will overlap and multiply each other as will the effects of climate change, species extinction, population growth and a host of others work to exacerbate each other as deftly illustrated by the documentary What a Way to Go: Life at the End of Empire.

About time someone hit the nail on the head regarding the US. This country has a daily oil deficit of 15 million barrels. Once exporting countries cut back to keep their remaining reserves for their economy, what's left of US manufacturing will drop like a stone. Along with that precipitous drop will be our entire economy. No country is so gravely poised to suffer the consequences of reduced exportation of crude as we are.

My wife wants us to add a guest house to the property, but I've nixed that until there is some news that clearly contradicts my concerns of peak oil. Right now we are doing the Cornicopian vs. Peakoiler dance. She keeps saying, "They will come up with something. Technology is amazing". But I'm not buying it. I just don't see an economically viable way to replace that much oil that fast.

Another interesting angle to consider is Australia's peacekeeping role in East Timor. Indonesia is likely to be Australia's biggest local competitor for energy resources and East Timor has some. Not that I would imply that the Howard government would either: a). engage in real politic or b). recognise the impending energy vise in which Australians will soon find themselves.

Australia's in a particularly unique position as one of the world's great coal exporters. It could potentially fall back on coal as oil becomes more challenging to import. Australia may be one of the few places on earth where Fischer-Tropsch synth fuel might work well on a national scale to supply the gap between consumption and production if imports effectively fall to zero.

I am reminded of the esoteric professors in university that pointed out the "intuitively obvious" to many an engineering student. This is no place for academic abstractions. That ship has sailed!

Reserve growth, technology advancement, economic pressures, lessening national control, yada, yada. And I say bullshit! There is only one metric that matters and that is oil is at record price and production is struggling to climb forward. Enough said.

The precepts of economics are about to get blown away. That is, economic theory has largely been based on commercial/social activity within an infinite resource world. It always amazed me how someone would dream to provide a pet rock to the American market and make their millions from trivial crap. What a business model...

Here and now we have 6.5+ billion (who last counted?) biped hominids occupying this fragile crust of a circling orb called Earth and we have come up against the limits. Heinberg said the "Party is Over" and its time to pick up the dishes. Please show yourself to the door.

If I were to put it in electrical terms, I would say the system is overburdened and susceptible to collapse - oh wait, that's been said. Well, I guess it is becoming intuitively obvious...

I'm betting that the exporters won't hoard so much as let demand at home rip by keeping prices artificially low, and eat up the last of the seed-corn.

That is what all the ones who are tapped out already have done, anyway.

You're absolutely right about hoarding of oil reserves, and that will probably happen to food as well. As the price of fuel skyrockets, the profit potential from ehtanol will rise along with it (as we have recently seen), and as that dynamic increases, food prices will go so high a certain percentage of the population will be unable to afford enough food to feed their families, and the consequence will be countries, regions, cities, towns, communities and families will hoard food. Then those that don't have food to hoard will seek out those that did using whatever means available.

Mr.Exporter only exports what he perceives as SURPLUS to his own needs. He can only export SURPLUS, as he perceives it.

PO-awareness warns of oil-starvation. When Mr.Exporter sees sees the approach of oil-starvation threatens, he will not sell his last ham sandwich.

Mr.Exporter will hold-back and HOARD before the last drop. Long before...if he is free to make his own decisions or his masters permit.

Such is not indicated in the ELM graph, because it is based on past performances, which did not include ANTICIPATION and HOARDING.

At some intermediate point, the graph of Export-decline will depart straight-line and begin accellerating toward minimums. Alarmingly. Shoutingly. And the myths of "free-market" and "fungibility" will be exposed as fairytales.

Because HOARDING terminatedly curtails the outflow of exports, allimporters simultaneously are forced to minimize consumption and promote conservation. It may result in a sort of forced cooperation among nations.

There can be a deliberate plan, quite sane and workable, that is done covertly to avoid panic. And I mean PANIC.

Consider the persons who control Saudi production and pre-suppose they have very intelligent worldview, high awareness and worldly street-smarts. What would you expect them to do? What would you do? How would your actions be different?

I agree because I live in an exporting country and the few enlightened are tired of supporting the wastefulness of the southern neighbor via the NAFTA agreement. (what's that I hear? Storm Troopers at the door - no, just "Gut Feeling"). I am 100% in agreement that nationalism is the macro form of hoarding.
/vsyxx
("vsyxx" stands for IPV6 and as the ultimate optimist I have reserved address space for Io).

Go up to WestTexas' post to read about what will be happening in the world market. (in short: no oil by 2030).

I think these bi-lateral agreements are coming under pressure. I am living it day in and day out as energy "producers" (I hate the term) are looking for ways around the existing structure. That is, potential energy is finding its way through the path of least resistance.

I guess that is all it comes down to, simple thermodynamics. "Entropy wins every time" (yes, that's my saying. I coined it. Use it, but please acknowledge). Stand back far enough and the dynamics closely resemble physical systems. Cold, lacking of higher learning, you bet!

Not of the reductionist camp, but when viewed from the lens of the great omnipresent being, one cannot discern between the semi-hairless bipeds and the Chimps.

/vsyxx

I would guess that the spot market will bwe eliminated in favor of bilateral agreements between Russia/Germany, Saudi/USA, etc. in a few years at fixed long-term prices then we can forget all these ELM models and any knowledge of production ansd supplywill be state secrets.

Yep, we love our big cars, down here, but not for much longer. The market for the locally-produced Holden (GM) Commodore and the Ford Falcon is shrinking so fast I'm surprised there's not a permanent clean-up crew standing around below their respective CEOs office windows. Small cars are now all the rage, although, in a BAU world, the sun will never set on the 'big aussie V8', as the distances between population centres is quite an amount. Our love affair with the car has also put paid, time and again, to any notion of serious funding for Mass Transit, with the result being that recent high Petrol prices is seeing the existing MT network bursting at the seams, all over the country.

If we had sensible people in positions of authority, we'd be building a 100kmh rail network conecting every population centre over 50k people, but instead, we've got the Rudd 'the script said 60% cuts in emissions, Mr Garnaut, not 90%' Labor Government who are verbalising tax incentive to drill for more Oil locally.

Australia has more sunlight than we have any right to expect, yet suggest a Solar Thermal be built, and the naysayers come out of the roodwork faster than termites running from Dragnet FT. "These plants are huge", they say, ignoring that a FF plant can occupy 20 square kilometres of ground. We've other options as well, but, like the US, we'll wait until it's obviously too late before trying anything. Wouldn't want to spook the markets.

And where does that leave the US which is turning all its surplus grain to ethanol ?

I agree with you however securing oil supplies is going to increasingly include a lot of other dynamics besides price in the future.

However if you guys keep having droughts its not clear that the grain surplus will continue. Global Warming is also a issue when you look at ties between oil and food.

I think your can feel the tension :)

Let the grand game begin.

Getcha popcorn ready.

geek7,

Most of Australia is inhospitable desert that is useless for just about everything except mining. A better comparison would be to calcualate Ha per person of arable land and this may give you a better sense of value.

Ha/person arable land
Australia 2.506
Japan 0.036
United Kingdom 0.095
Canada 1.270
USA 0.598
China 0.111
European Union 0.217

(a Hectare is 10,000 m2 or a little over 2.5 acres)

source http://www.ga.gov.au/education/facts/dimensions/compare.htm

From this you can see that Australia is blessed with plenty of land but it is not quite a 10 x factor over the USA. There is also a question of quality of soil, water and rainfall which would need to be taken into account to give this comparison any real meaning. Oz is very dry at the best of times but this latest drought has been going on for a decade which reduces production considerably. It also takes a considerable amount of oil to farm large areas, particularly crops where moisture is thin so palnting densities need to be wide.

Still, Australia is reported to feed about 70 milllion people and a lot of those are in the middle east. Maybe our grain and sheep meat might be more attractive to them than US dollars or Chinese trinkets?

Are there any biofuels companies in Australia that we should know of?

Yes, if only Australia had a vast, largely uninhabited, desert in which we could build Solar Power Plants... ;)

Many Australians seem to think there's nothing west of the Great Dividing Range.

Well I for one do not want to live in a former oil exporting country. I think Indonesia and Mexico will get very dicey in the coming years. Decades of inequality are going to fuel some pretty major uprisings.

For that matter the US is a former oil exporting country :)

I think you are right about oil exporting countries being in trouble. Australia is an oil exporting country but we then import a lot of finished product and crude of various grades to match out refineries. We have also always been exposed to world parity pricing which has annoyed many of the unwashed who think Australian oil should be given out at cost to Australians first!!

Many of the exporting countries do in fact sell petrol (gasoline)to their own citizens at a subsidised price which has encouraged high use and dependence way out of proportion to actual need. As the exporters find dwindling surpluses, they will be forced to withdraw the subsidies for their own and this will cause social unrest. (Witness Iran last year). They will have no choice however as many of these countries are large importers of food and that food will increasingly be paid for directly with oil as US dollars will be laughed at as a medium of exchange.

If it comes down to a fight between food or gasoline, food will win and once again the west will triumph

Well eventually demand destruction will happen and has happened to a certain extent since real demand cannot exceed supply. I think however what the oil nations see is that oil importers are very wasteful and can afford to pay much higher prices for oil. I don't see serious demand destruction until oil hits over 500 dollars a barrel or above 10-15 dollars a gallon for gasoline. Before this conservation efforts can easily handle the increased costs.

For example you can easily go from 20mpg to 40 mpg by changing cars. Another lifestyle choice is to move to a cheaper place half the distance from your work.

So if your driving 40 miles one way then move closer say 10-20 miles. And if your paying 4k a month on a mortgage you can easily let the house go or sell it and rent a apt or house for say 1000-1500. That would get you a extra 2000k at least a month to spend on higher food costs and higher gasoline costs. And this is without changing your car. If your smart you buy a fuel efficient car and let the SUV and McMansion go back to the bank if you cant sell. So you can see that a lot of people by giving up the SUV/McMansion dream can make it just well even if prices go as high as ten bucks a gallon.
Its somewhere over this that lifestyle changes no longer work.
But at 10-15 bucks a gallon practically any reduced organic fuel is viable its a matter of availability. And we have not even included at least a belated attempt to increase public transport car pooling etc. What you can't do is deal with shortages. At some point getting oil becomes a issue not its price. And I think free markets will cease well before we hit 500 bucks a gallon.

The wheels are coming off suburbia now and as gasoline climbs past 5 bucks a gallon it will only get worse. But the end of suburbia is not the end of the world.

so how can this be a catastrophe?

The population in 1980 was ... half what it is now? ... and the climate then was ... the same or was it different? In 1980 the world was much less complex and interconnected - complex things often fail spectacularly and unpredictably.

In 1980 the world had a growth paradigm, but what you are talking about is a contraction paradigm - each year less and less consumption (it won't stop at 30%) less and less jobs, failure of things like the banking system that REQUIRE growth to function correctly, disputes over resources (that may be very serious).

But above all, less and less food as our world food production/distribution system depends on large quantities of Fossil Fuels.

So, if the current consumption is 920 Kbpd this means that consumption should decrease to 644 Kbpd to meet availability. But the economy was using only 600 Kbpd in 1980. I'm sure the Australian economy was alive and well back then, so how can this be a catastrophe?

The population of Australia was a bit over 14 million in 1980. It is just over 21 million now (http://en.wikipedia.org/wiki/Australia ). To put it another way, the population of Australia is 50% larger than it was when we used 644 kbpd.

People can adapt to anything. We will adapt. But we can't adapt to that kind of change in such a short period of time without some really serious consequences.

Debt...........
Everyone conveniently ignores personal and business debt.
Australia for all intents and purposes has debt second to none in the western world.

Australia has debt AND increasing interest rates.
Interest rates have been increasing to curb inflation but all it is doing is increasing the debt bubble. Wages are not increasing in pace with inflation so the increasing and continuing consumer spending is financed by credit.

What will happen when business and consumers finally maximize their credit sources.
Or does everyone expect debt to grow exponentially forever.

Interesting to contemplate how those countries can ensure that Australia still gets a sufficient piece of the global oil pie. By the time the situation is so bad that Australia cannot buy enough oil do you think that China will still be needing all those resources to turn into "indispensable stuff" to export? I doubt the US will want to forego any of "it's" share:-) All shared out equitably or last man standing?

At least Australia has one of the lowest arable densities and is warm so disregarding water must be one of the best places.