Thursday, April 14, 2011

Estimating the End of Global Petroleum Exports Part 2 Regional production, consumption and export trends for ME, AF and AP

Here, in part two, I summarize the production, consumption and export trends for three of the seven regions I studied: Middle East (ME), Africa (AF) and Asia-Pacifica (AP). 

Middle East

Figure 1 presents the reported production, consumption and net exports rates (blue, red and green open circles respectively) and the corresponding NLLS best curves (solid lines with the same respective colors ).  According to the BP data set, the largest 2009 producers in the ME include, in order, Saudi Arabia (40% of all production in the ME), Iran (17%) and UAE (11%), with Iraq and Kuwait close behind UAE. The largest two consumers are Saudi Arbia (36%) and Iran (24%). 




Production rates in the ME peaked first in 1977 (8.2 bbs/yr), and then again in 2008 (9.5 bbs/ys).  To model this, I separately fit two Hubbert equations to the 1965-84 time span and to the 1985 time span.  In contrast, consumption rates in the ME are well modeled using a single Hubbert equation fit to the entire 1965-2009 time span. 

The best fit parameters of Qo, Q∞ and the rate constant, "a," are summarized in Table 1 below:


Table 1 summary of best fit parameter for production and consumption for ME


Qo (bbs)
Q∞ (bbs)
a (yr-1)
Production 1965-84
11
150
0.22
Production 1985-2009
66
455
0.080
Consumption 1965-2009
6
221
0.056


For production, the best fit parameters are consistent with a very rapid, 22 percent per year increase in the production rate from the mid 60s to the mid 80s, followed by a slower yearly increase (8 percent per year) from the mid 80s to present.  The Hubbert equation best fit suggests that the production rate peaked in about 2007-2008.

For consumption, the best fit parameters are consistent with a steady 5.6 percent per year increase in consumption rate.  The Hubbert equation best fit suggests that the consumption rate will not peak until about 2027-2028.

The reported export rates have two maxima in 1977 (7.6 bbs/yr) and 2009 (7.1 bbs/yr), reflecting the two maxima in production.  Due to increasing regional consumption, despite the higher rate of production in 2009 compared to 1977, the second peak in reported exports in 2009 was lower than the reported peak export rate in 1977 (7.6 bbs/yr).  The best fit export trend predicts peak net exports occurring in 1976 (7.5 bbs/yr) and 2004 (6.9 bbs/yr). 

Based on the best-fit production and consumption trends, I estimate that net exports from the ME will reach zero by 2036. 

Africa

Figure 2 presents the reported production, consumption and net exports rates and the corresponding NLLS best curves for AF. 

The bulk of regional production 2009 was from Nigeria (21%), Algeria (19%), Angola (18%) and Libya (17%).  Current political events in Libya will undoubtedly decrease the Libyan production dramatically for at least the next few years.  The three largest consumers were Egypt (23%), South Africa (17%) and Algeria (11%).



Production rates in AF follow three distinct trends which I modeled using three separate Hubbert equation fits to 1965-82, 1983-2002 and 2003-2009.   Similar to ME, consumption rates in the AF are well modeled using a single Hubbert equation fit to the entire 1965-2009 time span

The best fit parameters of Qo, Q∞ and the rate constant "a" are summarized in Table 2 below:


Table 2 summary of best fit parameter for production and consumption for AF


Qo (bbs)
Q∞ (bbs)
a (yr-1)
Production 1965-82
6.5
54
0.17
Production 1983-2002
28
155
0.074
Production 2003-2009
18
66
0.23
Consumption 1965-2009
4
74
0.059


For production, the best fit parameters are consistent with a rapid stage of annual production increasing at 17 percent per year from 1965-1982 and then a slower stage of production increasing at 7.4 percent per year for 1983-2002, and, the most recent stage of extremely rapid production increasing at 23 percent per year since 2003.  The Hubbert equation best fit suggests that production rates peaked in about 2007 and then will be in rapid decline if the 2003-2009 production rate trend  continues.

Similar to the ME, for consumption in AF, the best fit parameters are consistent with a steady 5.9 percent per year increase in consumption rates.  The Hubbert equation best fit suggests that consumption rates will not peak until about 2013.

The reported export rates follows a complex time course, reflecting the three different stages of production rate increase against that backdrop of steadily increasing consumption.  The peak in reported net exports from AF was reached in 2007 at 2.7 bbs/yr, which is well modeled (same year and amount) by the best fit export curve.

As noted above, regional net exports will rapidly decline if the recent production trend continues.  Based on the projected production and consumption trends, I estimate that net exports from the AF will reach zero by 2018. 

Asia-Pacific

Figure 3 presents the reported production, consumption and net exports rates and the corresponding NLLS best curves for AP. 

In 2009, China was the largest regional producer (47%) followed by Indonesia (17%) India (9%) and Malaysia (9%).  Of these four, however, only Malaysia was a slight net country exporter, and, as I mentioned in part 1, Malaysia is now interested in importing oil from Iran.  The top regional consumer, of course, is China (33%), followed by Japan (17%), India (12%) and South Korea (9%). 



Both of the reported production rates and consumption rates for the AP region have two distinct stages corresponding to 1965-82 and 1983-2009.  Accordingly, I modeled production and consumption using two separate Hubbert equations. 

The best fit parameters of Qo, Q∞ and the rate constant "a" are summarized in Table 3 below:


Table 3 summary of best fit parameter for production and consumption for AP


Qo (bbs)
Q∞ (bbs)
a (yr-1)
Production 1965-82
1.1
34
0.22
Production 1983-2009
46
213
0.075
Consumption 1965-82
7.3
91
0.17
Consumption 1983-2009
51
531
0.073


For production, the best fit parameters are consistent with a rapid stage of the production rate increasing at 22 percent per year from 1965-1982 and then a slower stage with the production rate increasing at 7.5 percent per year from 1983-2009.  The Hubbert equation best fit suggests that the production rate peaked in about 2006.

For consumption, the best fit parameters are also consistent with a rapid stage of the consumption rate increasing at 17 percent per year from 1965-1982 and slower stage of consumption rate increasing at 7.3 percent per year from 1983-2009.  Still, the annual percent increase in consumption rate is in the more recent stage much faster than the ME and AF (30% and 25% greater rates of increase, respectively). 

In fact, for the seven regions that I studied in this series, AP has the fastest present-day increase in consumption rate.  AF is second (5.9%/yr), and ME is third (5.6 %/yr).  (The all-time record annual consumption rate increase, however, is held by EU, at 15 percent per year, back in 1965-82.) If the trend for increasing consumption rates in AP were to continue, the peak in consumption in 2013 (9.7 bbs/yr) would be about 350% greater than the predicted declining regional production rate in 2013 (2.8 bbs/yr).

It is apparent from Figure 3 that the AP region was never a net exporter since 1965, and, this trend is not likely to change.  The predicted peak in the import rate is projected to occur in 2015 at -6.9 bbs/yr (through I represent exports as +ve and imports as –ve).

Next time I will finish my summary of the production, consumption and export trends for the remaining four regions: EU, FS, SA and NA.



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