[Peakoil] Imminent oil export crisis

[Keith Thomas]

The following extract from this week's column by Jim Kunstler is 
significant:

Some years back, when those watching the oil scene began to coalesce in 
their recognition that a worldwide production peak was imminent and 
hugely significant, the concept developed that this peak would take the 
form of a "bumpy plateau," meaning that supply-and-demand would teeter 
in an uncomfortable relationship for a period of time as markets and 
economies adjusted to the new reality by oscillating from higher prices 
to "demand destruction" to recession to recovery to higher prices, and 
so forth. This was expected to go on for quite a while before the world 
really headed into a slow permanent decline.
       The latest statistical work by Dallas geologist Jeffrey Brown 
over at The Oil Drum.com, suggests that something else is happening, 
something that was not anticipated: an imminent oil export crisis. This 
Export Land Theory states that exporting nations will have far less oil 
available for export than was previously assumed under older models. 
(Story Here.) The theory states that export rates will drop by a far 
greater percentage than net production decline rates in any given 
exporting country. For example, The UK's portion of the North Sea oil 
fields may be showing a nine percent annual decline for the past couple 
of years. But it's export capacity has declined 60 percent. Something 
similar is in store for Saudi Arabia, Russia, Mexico, Venezuela -- in 
short, the whole cast of characters in the export world. They are all 
producing less and they are all using more of their own oil, and have 
less to send elsewhere.
       Brown's math suggests that world oil exports will drop by 50 
percent within the next five years, certainly enough to trigger a 
systemic breakdown in market allocation, meaning serious supply 
shortages among the importing nations. That's us. We import two-thirds 
of all the oil we use.
       The implication in all this is that the activities that have 
become "normal" for us during the post World War Two era will very 
shortly become untenable. An economy based on suburban expansion and 
incessant motoring is on the top of the list of supposedly "normal" 
activities that will not be able to continue. I would maintain that 
even if we had 20 years, no combination of bio-fuels and other 
alternatives would enable us to keep suburbia running. But this latest 
work indicates that we have much less time to adjust.
        This new information is consistent with my view that we had 
better prepare to make other arrangements for living in this country, 
by which I mean specifically re-localizing, de-globalizing, with an 
emphasis on local agriculture wherever possible, the emergency 
restoration of passenger railroad service and related modes of public 
transit, the rebuilding of local commercial infrastructures, and a 
radical rethinking of how we inhabit the landscape under New Urbanist 
lines.
       Perhaps the most imminent danger is that the financial markets, 
which have been driving our insane, hollowed-out economy, will soon 
recognize what's in store and implode, creating a crisis of capital 
that will leave us with no ability to make any emergency investments, 
such as would be required to rebuild the railroad system. The equity 
markets sure blinked last week when two hedge funds based on 
phony-baloney collateralized debt obligations tanked. The collateral 
underlying this load of hallucinated "wealth" is comprised of contracts 
made by the insolvent for suburban houses worth far less than the value 
stated on the contracts -- with every indication that the real value 
will keep dropping.
       In any case, those who keep wringing their hands over the 
bulldozers leveling the plots of prairie, or cornfield, or desert -- 
those distressed folks can direct their anxiety elsewhere. Worry less 
whether one final strip mall will tilt up out in gloaming, and think 
harder about how you are going to feed yourself and your family in a 
couple of years when the stupendous motorized moloch of American life 
begins to sputter, and the Cheez Doodle shipments can no longer make it 
to your supermarket shelves, and all that is "normal" melts into air.

The full article is here: http://www.kunstler.com/mags_diary21.html
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Keith Thomas
www.evfit.com
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