Posted on 01/23/2006 6:12:39 AM PST by Rutles4Ever
Our collective effort is showing different answers for good reason. Your equation is flat in that it does not consider increase in global demand. For my 40 year guess, I estimated that Iran will average a 3.75% contribution to global consumption over the next twenty years. This is not far off from where they are today. If you look at the increase in global consumption from 1980 to 2000, it's easy to determine a linear equation, y=M*x+b. Use calculus to speed things up Take the integral of the linear global consumption equation from 2006 to 2026 and it will reveal total global consumption over the next 20 years. 3.75% of that is about half of Irans proven reserves. Therefore, if Iran is going to pump half its reserves in 20years, itll pump them all out in 40years.
There are flaws in both our models as Im sure there are with Spenglers. There is no proven method to predict the future for systems as complex as the one were trying to model. When petroleum is as expensive as it is now, the energy economy provides opportunity to other technologies which are currently cost effective. Unfortunately, if the price of crude settles below the alternative energys cost effective threshold, investors will lose their investments as markets transfer away from alternatives energy back to crude. So thats one aspect that is difficult if not impossible to account for when modeling consumption. Another variable I didnt bother with is this We know population growth and industrial growth are modeled with exponential equations and my quick estimate does not consider either. I bet Spengler's did and that's where he came up with 20years.
But I digress... What we've done is provide three estimates for the duration of viability for Iran's proven reserves. Spengler says ~20, I say ~40 and you say ~90. If Iran pulls a unilateral embargo or gets hit with sanctions each of our estimates will hiccup. Nevertheless, we should still try to predict the future! What the hell else would we do with all of these brains? lol BTW: Good Commentary BTTT.
I think all those models attempt to predict the life of world supply, with assumptions like you mentioned, but are irrelevant to a single nation. Using them like that is like measuring the average income growth of a neighborhood to predict it for a neighbor, from the general to the specific. Check out the chart from my last link for Irans production history.
Carry that decline forward and maybe their oil will last 1000 years ;^) I wouldnt want to predict when they will run dry. But If I had to, I wouldnt base a radical thesis on a lowball 20 year prediction as was done here.
Good talking with you BTW.
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