Export Land Model

Key Points

  • Key to importing countries is world net oil export capacity
  • Export Land Model (ELM) assumes exponential production declines and internal consumption resulting in zero exports at the crossing point
  • Three key points:
    • Exports decline faster than production declines
    • Export decline rate accelerates with time
    • Only a small portion of the post-peak production is exported
  • Example: Saudi Arabia - assume indefinite flat production, internal consumption increasing at 5.7% per year -> Net exports fall to zero by 2036.
  • Top five net oil exporting countries, Saudi Arabia, Russia, Norway, Iran and the United Arab Emirates collectively account for about half of current world net oil exports
    • From 2000 to 2005 had net increases of 3.7% in consumption per year
    • Beginning in 2005, net exports declined by 3.3% per year
    • Actual Saudi Arabia reserves may be overstated (see Production)
  • Concern is that these countries will show decreasing net exports as production remains flat or declines while internal consumption increases
  • Net exports expected to fall to zero for top five exporters by 2031
  • Net exports from Mexico (#3 supplier to U.S.) expected to reach zero by 2014
  • Previous exporters, U.K. and Indonesia are now net importers. (Indonesia has asked to be removed from OPEC in 2009)
  • Cautions:
    • Model does not account for economic downturns due to production declines or other external factors
    • Decreased revenue from declining exports likely to result in curtailment of exploration
    • Economic downturns are likely to result in reduced internal consumption


  • Saudi demand for fuel for power generation and transport has risen rapidly over the past six years as record crude exports sparked an economic boom. But a plunge in global oil prices since last July, caused partly by the global economic slump, has seen the kingdom cut production to its lowest level in more than six years as Opec races to match supply with falling demand. Saudi diesel imports to rise on power demand

Analyst Jeff Vail, in an April 2007 posting on his Energy Intelligence blog, titled Five Geopolitical Feedback-Loops In Peak Oil, explained the Export Land Model concisely thus:

“Export-Land” Model: Jeffrey Brown, a commentator at The Oil Drum, has proposed a geopolitical feedback loop that he calls the “export-land” model. In a regime of high or rising prices, a state’s existing oil exports brings in great revenues, which trickles into the state’s economy, and leads to increasing domestic oil consumption. This is exactly what is happening in most oil exporting states. The result, however, is that growth in domestic consumption reduces oil available for export. In states, such as Mexico, where oil production is also in decline, the “export-land” model predicts that oil exports will decline much faster than oil production—and this is exactly what is happening, with the latest PEMEX report showing 5% production decline year-on-year, but 11% export decline. Ultimately, the effects of the “export-land” model itself suffers from diminishing marginal returns—when exports shrink sufficiently, the oil-export revenue per capita will actually begin to decline (eventually reaching zero, no matter how fast prices rise), at which time the force behind rising domestic consumption will be eliminated.


Production and Consumption Forecasts for Top Five Exporting Countries

Saudi Arabia








United Arab Emirates


Combined Top Five Exporting Countries



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