Simmons and Hirsch discuss the imminence of Peak Oil

[GliderGuider]

Robert Hirsch (author of the 2005 DOE report on Peak Oil) and Matt Simmons (author of Twilight in the Desert) discuss Peak Oil on Jim Puplava's show. The audio links are here under December 13, Second Hour: http://www.financialsense.com/fsn/main.html

Some highlights:

• Fatih Birol (chief economist of the IEA) is going around the world telling the movers and shakers privately that oil will peak shortly: "Basically the game is over.... Based on the most optimistic assumptions they can make (using their access to the best raw data in the world - 798 fields) current crude oil production of 73 million barrels a day will be down to 25 million barrels a day by 2030."
  
• Cantarell's output is declining by 2.5% a month.
  
• Mexico will cease being an oil exporter by the end of 2009.
  
• 80% of the world's oil production equipment is past its "best-by" date, and remediating the rust-out will cost $100 trillion.

Top quality Peak Oil doomer porn from two of the greats.

[happyslug]

1. If Mexico cease exporting oil to the US in 2009, where will US gets its oil

http://www.sptimes.com/2007/09/24/Worldandnation/Analysts_watch__wince.shtml

US imports 9% of its imported oil from Mexico in 2000 (With the US importing 62% of its oil, that means a net less of 4.5 % of all Oil used in the US):
http://www.eia.doe.gov/emeu/northamerica/engsupp.htm

In 2007 it was worse, the US imported 14.5% of its imports from Mexico (Given the US import 62% of its oil, that means where does the US get almost 10% of the oil we use?).
http://www.americanprogress.org/issues/2008/05/oil_imports.html

This source says the US only imports 58% of its oil usage, but again how does the US replace the 5% of the oil WE USE that is imported from Mexico?):
http://www.infoplease.com/science/energy/us-oil-imports.html

This site says over 70%, but that seems high, the biggest reason for this difference in numbers is a tendency to exclude oil we re-export back to Mexico and other oil producers. Thus the 58 % is probably the most correct, for it sounds like it is NET imports (i.e. Excludes oil refined and then exported to a third country):
http://www.financialsense.com/editorials/casey/2008/0710.html

Saying the above, how is the US going to adjust to a permanent shortage of Oil? The high prices of last summer will come back, the only question is when. A few months ago I was saying next summer, but the economy is going so bad that may NOT happen, but it will whenever we bottom ut of this recession and the economy re-starts.

[GliderGuider]

2. Mexico = Export Land

Export Land Model

The Export Land Model, or Export-Land Model, refers to work done by Dallas geologist Jeffrey Brown, building on the work of others, and discussed widely on The Oil Drum. It models the decline in oil exports that result when an exporting nation experiences both a peak in oil production and an increase in domestic oil consumption. In such cases, exports decline at a far faster rate than the decline in oil production alone.

The Export Land Model is important to petroleum importing nations because when the rate of global petroleum production peaks and begins to decline, the petroleum available on the world market will decline much more steeply than the decline in total production.

This is a crucial piece of the Peak Oil puzzle, especially for the United States.

Jeff Brown and his mathematical sidekick "Khebab" have done a nice quantitative analysis of the prospects of the world's top 5 oil exporters here. Their assessment is that the exports from these 5 will go to zero some time between 2025 and 2040. The current global recession/depression could push that date to the upper end of the range, but the USA should prepare for a world without an oil export market of any kind within 30 years. Of course, serious geopolitical consequences will kick in well before that time, especially if the new IEA decline projections are anywhere near accurate.