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Peak Oil Matters

A fresh perspective on the concept of peak oil and the challenges we face


Tag: oil exports

About twenty months ago, I discussed the topic of the Export Land Model, one defined and credited to Texas petroleum geologist Jeffrey Brown and a colleague (Dr. Samuel Foucher). Its premise begins with a simple question: “What happens to oil exports in a world with constrained oil supplies?”

As I noted in that prior post: “As oil-exporting nations use the profits generated from their production and sale to grow their own economies and strengthen their industries and infrastructure—while raising the standards of living of their own citizens—they must necessarily increase the amount of oil they retain for themselves. It is, after all, their oil. (And they function with fossil fuel-based infrastructures just as the rest of us do.) Seems fairly straightforward….

“What we tend to overlook … is that as oil production begins its inexorable decline (as it already has in many instances), and as this domestic use increases, the amount of oil available to the rest of us decreases even more drastically than it does based on a straight oil production decline.”


Let’s take a look at how this might work, using very simplified math (trying to help out certain political “leaders” as much as I can), and a scenario most can relate to.

I have 1000 bottles of water available to me each day from a reservoir located entirely on my property. My family has owned this land for hundreds of years. To extract the water and bottle it costs me, on average, just ten cents per bottle. So every day, like clockwork, investing the time and money needed, I extract 1000 bottles of water from my self-contained reservoir. My cost is a measly $100.00 every day.

Unfortunately, in my little community, we never get rain … ever! (Work with me here. I’m adopting a Republican leadership strategy: facts and science are inconvenient for purposes of my story, so off they go!)

The reservoir initially held, according to most water-bottling experts, approximately 100 million bottles of water way back when. Now I’m down to about 50 million bottles. Not an insignificant amount, to be sure! The reservoir is no longer just one big lake any longer, however. Draining away all that water over all these years has of course run it down quite a bit, and now some of that water tends to slide off here and there into little seams and pockets and shallower areas. That stuff is gonna be tough to get to, let me tell you!

But so far, I don’t have a lot of trouble getting to most of the water. Some days I have to work a bit more. Truth be told, more days are like that now than ever before, but not a big deal. I’ve had to buy some fancy do-hickeys to help me pump out the water, but I’m not worried. Just wish those things didn’t cost so much! But I’ve still got a lot of water on my property! Taking a good guess about those underwater nooks and crannies and eyeballing how deep I think the reservoir is, I’m pretty damn confident that I’ve still got “quite a few years” left before squeezing out all those bottles of water gets to be a bit too much for me.

Of course, water is absolutely essential to my continuing health. I can’t do without, that’s for sure! Every single day for the last many years, I’ve needed 50 of those bottles myself for all kinds of things. But those 50 that I first take out bottles every day for myself have been more than enough. I’ve never worried that I should start skimping here and there.

Now, I do like the finer things in life. A nice riding mower sure does help me out on the property, for one! Lots of TVs, too … can’t have enough of those! I like to take trips now and then, and as for new cars—the expensive kind—well, they’re a are a real treat for me. A few years back, I bought this really terrific piece of property and built a house. I like to spend a lot of time during the summer there. Lots of nice things in that house, too. Stuff is getting expensive! So I need some revenue to make sure I have all the stuff I want.

The neat thing about all of this is that with so much water on my property, every single day I’ve been able to share my good fortune with all my neighbors. It’s a small community, and most of them, unlike me, don’t have a lot of possessions yet and not a lot of needs, but they do need their water. And wouldn’t you know that each and every day, I’ve been able to sell all my bottles of extra water to my neighbors, all of whom are delighted to pay the $1.00 per bottle I ask. Win – win!

But here’s the thing: now I’m married (time travel into the future is way cool)! And wouldn’t you know, my wife needs her own supply of water every day. Not a problem, honey! We’ve got a lot of water. But I’ve been noticing recently that I’m not always getting the full 1000 bottles out every day. (That whole “no rain” thing is damned inconvenient!) Actually, I can’t remember the last time I did, but hey! We have enough for us, so no worries!

Neighbors grumbled a bit when I had to let them know I couldn’t meet all of their demands any longer, and because it’s getting a bit more difficult for me to get the water each day (gotta do some climbing down to get to the water nowadays, what with the level dropping and all), I had to start charging them a bit more. Truth be told, I’ve been kinda raising the prices regularly for quite some time. Wish it were different, but you know how it is!

Every now and then I’ve dropped the price when it made sense to do so, but most days I just can’t. (I do like buying all that stuff, you know, and it’s not free!)

And since my neighbors all need the water and would prefer getting it from me rather than having to waste time and money and effort driving all over the place to find a few bottles here and there in some of the outlying areas of our county (and it’s usually more expensive stuff, too; and some of it tastes funny, by the way), they keep buying whatever I put out on the card table I have out in front of my house.

No need to put up any fancy store decorations or anything like that. They’re gonna show up every day no matter what, so why spend the money? You would be amazed at all the cool stuff I buy from catalogs with all the money I save by not having to do anything to get my neighbors to buy my water! I’m sure I’ll use at least most of that stuff eventually.

Good news! We have a new baby (this fact-and science-free living is just amazing)! The baby sure does demand a lot, and it turns out that Junior needs a lot of water too! Not so much right now, ‘cuz after all he’s just a baby, but it’s just common sense that once he starts to grow, I know he’ll be needing more. Not a problem, ‘cuz I got lots of extra water!

Of course, while the neighbors are happy for me and delighted that my child is getting lots of chances to do things on my dime (amazing the stuff you can buy from baby catalogs!), I don’t have quite as many water bottles available for them each day. And you know how neighbors are: they do need their water!

There’s been some additional grumbling, and a few of the neighbors are starting to add some soda or tea to their daily routines, but that only goes so far. Those Dr. Pepper baths aren’t nearly as enjoyable as you might think, so they are definitely feeling the pinch now and then, but everyone is managing so far. There’s still just about enough water in the county to take care of everyone. Don’t for how long, but we’re all good at least today.

Fact is, I’ve got too much to think about right now as it is, so I really can’t be bothered thinking about tomorrow or next week, or even next month. That kind of long-term thinking just doesn’t work for me.

Of course, I could just tell my wife and Junior that they should do without all the water each of them needs, but I’m not having that conversation! So the bottom line is that I’m going to keep keeping for myself all the water my family needs every day and sell the rest.

More good news. Baby # 2 has arrived! Junior is starting to need a bit more water now that he’s starting to grow and have friends over, and well, with another thirst to quench, it looks like my neighbors’ supply has just gotten a bit smaller. And you know, I’m climbing down a bit more these days to get at all that water, so … well, you know how it is with costs and expenses and all.

Turns out that my parents are moving in. I’ve got a lot a space, and we do have that nice big second home (and man, that’s getting expensive to maintain). I hate to do it to my good neighbors, but it looks like the price is going to creep up just a bit more, and sad to say they are all going to have to start driving a bit farther out to get all they need, cuz most of the other suppliers in the county are having their own troubles keeping up with demand. I heard that just last week twenty of our neighbors had new babies! Six more of them started up new businesses, too. Good for them! They do need some water for all those new and shiny things, of course, and well, I’ve got more mouths to feed first and foremost, so  … well, you know how it is….

In fact, we just had baby # 3! Go figure! And man, do the other two growing children have their needs. Amazing how much more water I’m having to keep for myself these days. They all take showers; friends are now coming over; they’ve got school projects and sports activities and just about all of those events require water; and … well, the truth is that I’m needing a whole lot more water for my family than ever!

Neighbors are saying the same thing about their families, too! Go figure! A few of them are lucky because they have some smaller pools on their property, so they can usually make up for the county-wide shortfalls. Quality is not always as good, of course, but they’re fine. They do complain about how hard it is to get to those other reservoirs and how much work they have to do to get their water bottles back home, but no one seems to be worrying. Of course, they don’t have as much time to do other things, because getting that water home is now a lot more time-consuming than they imagined. Some of the store owners in town are complaining too. “Everyone in town keeps telling me that they can’t buy as much from me as they used to. Excuse is that they have to spend more money on that damn water! I’ve got expenses, too!” I hear that more and more these days.

This is kinda sad, but my sister’s husband lost his job, and they are having a tough time. Since I have a lot of water, I’m helping them out by giving them all they need. That’s one less thing they have to worry about, thankfully! After all, I do have lots of water! And my nephew … wow! He goes through water likes it … water! “It’s free, Uncle, and you’ve got a lot, so what’s the big deal?” I hear that all the time now. And my own Junior has this annoying habit of not turning the shower off, either. What a dummy! Twice a day, I have to clomp up the stairs to shut the water off. Good thing I have a lot of water to waste.

I know the neighbors understand, but I know they’re not happy. What can they say, really? It’s my water! It’s costing even more to get their water from me, I’m working harder, and my own water needs just keep growing! So glad I have a lot of water! Family is getting a bit antsy, ‘though. I had to buy my parents some new furniture because they were complaining so much. I think they’re happy now. But the kids! Every day they want something else, and I know there’s gonna be hell to pay if I don’t give in now and then. Truth is, it’s a lot more now than then these days….What can I do?

How’s all this math working for you so far?

Let me run by you this opening sentence from a recent Reuters report. Might be a good idea to take two minutes and read the entire story.

The world may have to live on a lot less Saudi Arabian crude towards the end of this decade as rampant internal demand eats into oil exports and the kingdom’s alternative energy plans may prove too little too late

Welcome to the Export Land Model … the one we need to consider here in the real, fact-based world.

More to come.

A few more thoughts on the heels of Monday’s post.

In a recent article on energy, climate change, and sports, Amanda Little shared an anecdote about an iconic National Football League team.

“The new Dallas Cowboy’s stadium, for instance, is an energy-guzzling Colossus averaging $200,000 in monthly utility bills and consuming about as much power as Santa Monica, California. (A conventional scoreboard, on its own, can devour as much electricity annually as 100 homes.)” [1]

Can we really continue to afford to think that this kind of energy excess can and will continue? Is that level of energy usage of greater priority or importance than powering neighborhoods? The truth we need to come to terms right about now is that absent some magnificent new discovery that comes into play very quickly and successfully, we may find ourselves having to make some painful determinations about energy consumption priorities that will have ripple effects in many aspects of everyday living—commercially and personally.

As has been noted by a number of bloggers and organizations, the International Energy Agency has now stopped dancing around the issue and finally admitted that Peak Oil was reached back in 2006. One of its prominent officials has once again indicated that “the era of cheap oil is over.”

Consider just a few more facts on the ground: exploration (deep water or tar sands, anyone?) and production has become more difficult and certainly more expensive, to say nothing of the resource quality. The primary exporters of oil are experiencing increasing domestic demand, and so naturally they are keeping more oil for their own national use. Hard not to understand that that just means less for everyone else. The majority of large producing oil fields are experiencing an inexorable decline in production. A poor worldwide economic environment has restricted investment in exploration and production, and there quite clearly will not be a ramp-up quickly or inexpensively. China is leading the way in higher demand for oil. On and on it goes….

These and many other frequently-discussed factors are going to have an impact soon if that process hasn’t already started. The situation simply is not going to get better, as disheartening as that may be. We’re all going to have to recognize a different set of rules about fossil fuel availability and consumption.

While alternative energy development is a primary source of hope, David Fridley’s excellent chapter in The Post Carbon Reader: Managing the 21st Century’s Sustainability Crises [2] has pointed out some very important limitations that need to be recognized and appreciated.

Mr. Fridley offers this important consideration:

“Alternative energy sources will need to form the backbone of a future energy system.
“That system, however, will not be a facsimile of the system we have today based on continuous uninterrupted supply growing to meet whatever demand is placed on it. As we move away from the energy bounty provided by fossil fuels, we will become increasingly reliant on tapping the current flow of energy from the sun (wind, solar) and on new energy manufacturing processes that will require ever larger consumption of resources (biofuels, other manufactured liquids, batteries). What kind of society we can build on this foundation is unclear, but it will most likely require us to pay more attention to controls on energy demand to accommodate the limitations of our future energy supply. Moreover, the modern focus on centralized production and distribution may be hard to maintain, since local conditions will become increasingly important in determining the feasibility of alternative energy production.” (p.13)

And a few more “for instances” from this terrific piece that we need to keep in mind about our supposed Alternative Energy Knight In Shining Armor:

“… —alternative energy depends heavily on specially engineered equipment and infrastructure for capture or conversion, essentially making it a high-tech manufacturing process. However, the full supply chain for alternative energy, from raw materials to manufacturing, is still very dependent on fossil-fuel energy for mining, transport, and materials production. Alternative energy faces the challenge of how to supplant a fossil-fuel-based supply chain with one driven by alternative energy forms themselves in order to break their reliance on a fossil-fuel foundation.” (p.3)

“Closely related to the issue of scalability and timing is commercialization, or the question of how far away a proposed alternative energy source stands from being fully commercialized. Often, newspaper reports of a scientific laboratory breakthrough are accompanied by suggestions that such a breakthrough represents a possible “solution” to our energy challenges. In reality, the average time frame between laboratory demonstration of feasibility and full large-scale commercialization is twenty to twenty-five years. Processes need to be perfected and optimized, patents developed, demonstration tests performed, pilot plants built and evaluated, environmental impacts assessed, and engineering, design, siting, financing, economic, and other studies undertaken.” (p.5)

When you add to that mix the fact that alternative energy supplies are currently inconsistent in terms of availability, and are much less efficienct than fossil fuels (i.e., we’ll need even more alternative energy to do what lesser quantities of oil provide)—among other factors Mr. Fridley takes great care to inform us of, we do not have adequate solutions/replacements in place.

There are no magic alternatives out there in Energy Solution Land that we can just drop in to our homes and industries and automobiles overnight and then just carry on without so much a single hiccup of interruption or inconvenience. (For all the good that electric vehicles offer, let’s not forget that we do not have the kind of infrastructure in place that will enable us to power an entire new generation of replacement vehicles—at least not without using considerable amounts of fossil fuel-burning power plants to power them up and keep them powered up.)

While our understandable preference may be to just bull our way forward on a blind assumption that something will come to the rescue, reality suggests otherwise. A broader understanding and awareness is called for—notably among and by our political leaders—but so too must the rest of us begin to recognize what looms on the horizon. Peak Oil does not mean our comfy little worlds are going to collapse next week or even soon (however we prefer to define that), but the reality that we’ve now maxed-out worldwide oil production and will never exceed those levels means we’re on the downside of availability.

Everything that we’ve come to rely upon oil for (in other words, pretty much everything), is going to be impacted. And that means we’re going to be impacted. The more of us who appreciate the challenges, the more intelligent our choices will be to plan for the needed adaptations.

We clearly cannot and must not be confident that a limited few will always act in the best interests of the majority. Congress has done a magnificent job of assuring us of that fact. But relying on our government is a necessity nonetheless.

“The Federal Government has many instruments that it can use to accelerate the creation and implementation of new energy technologies. These include research support, technology development, tax and other financial incentives, procurement, technology demonstration and deployment, regulation, standards development, knowledge dissemination, intellectual property protection, public-private partnerships, Federal-state coordination, support for education, immigration law, and international agreements. These instruments involve the responsibilities of many different Executive Branch agencies and Congressional committees. In the past, many actions taken by different administrations and congressional entities have been at cross-purposes with regard to their effects on energy technologies.” [3]

So while we face the daunting challenge of relying on national leaders to articulate our energy priorities and strategies as Peak Oil’s impact becomes more pronounced (leaders who by and large have demonstrated remarkable unanimity in failing to discuss the truths about what we face, by the way), another daunting truth is that much of what will actually be done to deal with the consumption changes will originate at the state, regional, and local levels. While I believe we must have some national objectives in mind, we cannot disregard the importance of bottom up input and expertise.

Soon enough it is not going to matter what your philosophy about governance is, or if deficit-spending is a greater burden than failure to spend, or if the Right is collectively more insane than the Left. We’re going to have to move above and beyond those ultimately petty ideological concerns and develop and deal with real-life implications of a society that it going to have its industrial design and production and transportation systems—and eventual consumption by end-users—all provided and sustained by something other than unlimited amounts of fossil fuels. It will indeed be a whole different kind of world we’ll live in.

While there are clearly some rather imposing challenges and issues, the question ultimately boils down to this: do we allow the challenges to defeat us, or do we recognize the magnitude of what faces us and rise up to seize the opportunities? We’re in due course going to have no choice but to restructure and revise and refine and re-create the industrial support system that has supplied us with our remarkable levels of prosperity for more than a hundred years, as well as doing the very same thing for the lifestyles we currently enjoy.

We must recognize that this will of course lead to different outcomes (we’ll have no choice in that), but that does not necessarily equate to “bad” outcomes. Life is going to be different, and the sooner we come to terms with that truth the better off we’ll be as we begin the process of adaptation and the creation of new strategies and new systems of production and usage. The most optimistic person on this planet cannot expect this to occur in anything less than many years—many years that will pass with less and less of the energy resources that brought us all to this moment. We do have our work cut out for us.

Are we up to the task?


[1]; Can Professional Sports Do More Than Politics to Save the Planet? November 15, 2010
[2]; The Post Carbon Reader Series: Energy – Nine Challenges of Alternative Energy By David Fridley, p3-4 [Excerpted from The Post Carbon Reader: Managing the 21st Century’s Sustainability Crises, Richard Heinberg and Daniel Lerch, eds. (Healdsburg, CA: Watershed Media, 2010 –

In a number of prior posts, including my post from earlier this week, I have tried to impress upon readers of this blog the urgent need for planning. In a future world that was once created, maintained, and enhanced by fossil fuel resources at every step, we’re going to have to devise means and methods to achieve many of the same functions without oil to sustain the efforts. That is no easy task.

Certainly we will help the cause by paying attention to our energy usage and by finding ways to conserve, starting right now. Every measure will help. If we don’t have the basic energy resource (oil) available to us to power our industrial economy in all its facets, then obviously “alternative” energy resources will have to step in as substitutes.

There’s one serious problem: we don’t have alternative energy resources anywhere near the quality, quantity, or scale to serve as an appropriate substitute. That’s Gigantic Hurdle Number One, and we’re not going to clear that bar any time soon absent a legitimately miraculous discovery in the near term; or a massive, nation-wide commitment to make the transition away from our oil-powered economy—with all the research, design, testing, implementation, and sacrifice that entails. The latter is very likely the one we’ll have to depend on, sooner or later. Sooner is the better option.

As mentioned in my last post, as have others, the Hirsch Report was quite clear that mitigation efforts designed to transition away from oil as the foundation of economic growth and industrial production required an all-hands-on-deck twenty year process. With Peak Oil now, apparently, a few years past already, we’ve got a calendar problem. Those mitigation efforts would have had to begin about a quarter of a century ago. Turning back the clock has never been an option, and it’s not available now, either.

“Achieving any really significant percentage of renewable energy contribution to current consumption levels appears to be next to impossible. Current efforts to try and achieve this impossible target require ever more massive and complex machinery and higher and higher inputs of, increasingly scarcer materials and fossil energy to achieve.
“The point is very simply that an enormous amount of fossil energy is required to manufacture, install and operate all forms of renewable energy systems. Without the input of fossil fuel the existing renewable energy projects could never have been built and could not be maintained in operation.” [1]

Worldwide discovery of oil peaked more than three decades ago. Every year since, we have been using a lot more oil than we’re finding. Spin that any way you’d like, it’s still bad math. Approximately two-thirds of the countries producing oil (including the U.S.) have now—or long ago—reached peak production. That math doesn’t work any better.

As the remaining major oil producers continue to expand their own economies and serve their citizenry, the amount of oil they will have left over to only then export to countries like our own will decline. Whatever sense of entitlement we might insist upon won’t be worth much when that reality intrudes. That’s a grand social psychology problem we’re not close to recognizing. We’ve always gotten whatever we need … sometimes just because we wanted “it.” There will be a lot of whining and complaining in the years to come when the realization dawns on us that “just because” is no longer good enough. The citizens of the world have every reason to expect or desire growth and prosperity for themselves. And I don’t foresee the peoples of developing nations deciding en masse to forestall progress so that Americans can continue to gorge themselves at the world’s expense. That may not be a happy message to receive, but it’s an honest one.

And let’s not forget that finding and producing the same quality and quantities of oil that has sustained us to this point is only going to be more difficult; which of course also means more expensive. Oil producers won’t be absorbing those higher costs out of the goodness of their hearts, either. We’ll be paying for that.

But so far we have no strategies to address these real-life consequences of peak oil production. The ones we are employing (because we have no alternatives), make less sense as time passes.

“What is crazy and wasteful is that the U.S. and other countries are still building car assembly plants, roads, highways, parking lots, suburban housing developments, and airplanes as though cheap oil will last forever (Brown 2009). We continue to make investments in an infrastructure that will be superfluous shortly after we build it. This is an example of a market that is failing because it does not anticipate even short-term changes.” [2]

What’s a better approach, as we continue to seek ways to pull ourselves out from the depths and burdens of this ongoing Great Recession (and no, tax cuts for the wealthiest few hundred among us really is not the solution)? Perhaps our national leaders might consider the opportunities to redress the myriad infrastructure repair and maintenance issues with an intense focus on adapting that infrastructure to a world where fossil fuels are no longer available to power or sustain it—and us. Relying on the normal resources is painfully short-sighted now. Certainly a reliance on hands-off government for an undertaking this complex is pointless to argue or consider. An unfettered corporate world cannot begin to handle the myriad aspects of this nearly-incomprehensible conversion.

More planning might be a good idea right about now, before we throw money and fossil fuel resources at problems that desperately require our attention.

Other nations, notably China, seem much more capable and willing to prepare themselves for a new energy culture than we are. That’s a problem now, and it’s going to become an even greater and more pervasive problem for us down the road unless we start getting our national act together. But no one wants to take that first giant step to explain to Americans that we’ve got a brewing challenge ahead, one that will too quickly morph into a crisis unless we start doing things differently … now.

“‘China right now is preparing to roll out electric cars, lithium ion batteries, solar cells, cellulosic ethanol. This is where the future of energy is. We’ve a finite resource in oil, just like we had a finite resource in whale oil, and we made a transition,’ said [Rep. Jay Inslee (D-Wash.)]. ‘And we have to really focus our national energies in a bipartisan way, I would hope, on finding our way to compete with China to really build new energy sources of the future.’”

“President Obama has made a similar case repeatedly in recent years, stressing the fact that countries like China and India ‘aren’t playing for second place.’ There’s a gut-level appeal to messages like these, at least there might be, targeting a certain nationalistic impulse — advancing America’s interests isn’t just about a debate over the size of government, it’s also about positioning the United States as a world leader in a competitive landscape.” [3]

The opportunities are still there, daunting though they may be. But unless and until we come to some national recognition about what the real world is going to be like for all us—Republicans, Democrats, You-Name-Its—we cannot hope to prepare ourselves for the massive changes that will confront us in the years ahead. Can we still lead? Will we?

The song remains the same: crisis, or opportunity?


[1]; How sustainable is renewable energy? by Roger Adair
[2]; Peak Oil 3: National and Global Production Peaks of Oil and Other Resources by John Ayers

Another brief “interruption” to the flow of planned posts:

Touching on a theme I raised previously (with similar observations from Ferdinand E. Banks as cited in that post), I recently came across two other articles (one by the always-informative Kurt Cobb) discussing concerns about increased domestic demand from oil-exporting nations. (See the references to those articles at the end of this post.)

Texas petroleum geologist Jeffrey Brown, noted for his Export Land Model theory, is featured in both articles, and he raises salient points that bear directly on the supply of readily available and relatively inexpensive oil we’ll likely have in the years to come. That supply is eventually going to be curtailed, as I’ve been discussing since this blog began. What that means to all of us is the primary purpose of Peak Oil Matters.

The two referenced items remind us that: (a) the consequences of Peak Oil aren’t solely the result of decreased production, (b) technology isn’t the magic answer.

As oil-exporting nations use the profits generated from their production and sale to grow their own economies and strengthen their industries and infrastructure—while raising the standards of living of their own citizens—they must necessarily increase the amount of oil they retain for themselves. It is, after all, their oil. (And they function with fossil fuel-based infrastructures just as the rest of us do.) Seems fairly straightforward….

What we tend to overlook, and what these two articles make clear, is that as oil production begins its inexorable decline (as it already has in many instances), and as this domestic use increases, the amount of oil available to the rest of us decreases even more drastically than it does based on a straight oil production decline. If the Export Land Model theory is correct, then we may be facing the challenges of Peak Oil even sooner than we anticipate. Existing technology isn’t going to overcome this accelerated decline.

And if that is true, then we’d better get moving on planning and implementing some new strategies quickly.

Referenced articles: ; Do Texas and the North Sea foretell the future of oil production? 
02/25/2010 by Scitizen (Kurt Cobb); Another Take On Peak Oil: Exports, Not Production, Indicate Crisis by Zoe Macintosh on February 25, 2010