Oil Exports May Soon Dry Up by ProQuest

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What you really should be worried about is peak oil exports. The problem is simple: When net oil exporters are awash in cash, this stimulates development and increased domestic energy consumption, reducing the amount of oil available to export. Fuel subsidies exacerbate the problem by encouraging higher demand domestically - higher than it would be if consumers were paying world market rates. Globally, the export problem is a vicious circle. As export supply falls, oil prices rise, sending even more money to the producers. One thing is certain: Many of the big exporters on whose output the US most relies aren't going to be reliable for much longer. Most of the production gains that Americans are counting on for the future are from small, conflict-ridden producers in Africa that are relatively inhospitable to foreign investment.

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                                                                                                   Emirates (representing half the
                                                                                                   world’s oil exports) — the results
                                                                                                   were ominous.
                                                                                                      The “middle case” scenario indi-
                                                                                                   cates that these five producers will
                                                                                                   approach zero net oil exports around
Oil Exports May Soon Dry Up                                                                        2031. For consumers, zero net oil ex-
Petroleum available for foreign export may peak within 25 years.                                   ports means, simply, no oil to buy.
                                                                                                      For Saudi Arabia, the world’s top



F
                                                                                                   oil exporter and the number-two
     orget the debate about peak oil                                                               source of imports for the United
                                                              By Chris Nelder
     supply. What we really should                                                                 States, the “middle case” in Brown
     be worried about is peak oil                                                                  and Foucher’s model shows exports
exports.                                         some reserves for future generations.             approaching zero by 2031. Another
  The problem is simple: When net                This will further limit output.                   recent study by petroleum engineer
oil exporters are awash in cash, this               The net export problem has been                Jean Laherrère — which assumed
stimulates development and in-                   modeled by Dallas-based indepen-                  greater Saudi oil reserves — projected
creased domestic energy consump-                 dent petroleum geologist Jeffrey                  zero exports by around 2050.
tion, reducing the amount of oil                 B ro w n a n d c o - a u t h o r S a m u e l         Worse, it appears that global net
available to export.                             Foucher. Their model shows that,                  exports have already begun to de-
  Fuel subsidies exacerbate the prob-            once oil production in a given ex-                cline — at the rate of about 2.5% per
lem by encouraging higher demand                 porting country peaks and goes into               year. Energy Information Adminis-
domestically — higher than it would              decline, exports drop off rapidly.                tration data shows that global ex-
be if consumers were paying world                   It also demonstrates three sobering            ports fell by about 0.8 million barrels
market rates. Middle East gasoline               results:                                          per day in 2006, and by a full million
averages under $1.50 a gallon, and in               •	Exports	decline	faster	than	pro-             in 2007.
Venezuela it runs a mere $0.19 a                 duction.                                             For the United States, which is
gallon.                                             •	The	export	decline	rate	acceler-             heavily dependent on imported oil,
  Globally, the export problem is a              ates with time.                                   this is a serious and immediate prob-
vicious circle. As export supply falls,             •	Only	a	small	portion	of	the	post-            lem. Consider the export picture
oil prices rise, sending even more               peak production (10% in the model)                from the United States’ top suppli-
money to the producers. This funds               is ever exported.                                 ers: Mexico and Venezuela both de-
development and increased domestic                  When the model was applied to                  creased their exports to the United
consumption, further reducing ex-                the world’s top five net oil exporting            States between 2006 and 2007, by 10%
ports. Exporters like Saudi Arabia               countries — Saudi Arabia, Russia,                 and 4% respectively, while Saudi
are increasingly inclined to set aside           Norway, Iran, and the United Arab                 Arabia sent 1.8% more. Canada, the
                                                                                      PHOTOS.COM   biggest oil exporter to the United
                                                                                                   States, increased its shipment by
                                                                                                   3.1% in that period compared with a
                                                                                                   16% increase from 2005 to 2006.
       
								
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