Egypt and Peak Oil

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DurangoKid's picture
DurangoKid
Status: Silver Member (Offline)
Joined: Oct 25 2008
Posts: 174
Egypt and Peak Oil

In a recent article on The Oil Drum I read about three things affecting Egypt.  One, their oil production peaked in about 1995.  Since then the fraction of production allocated to domestic use has increased and in the not too distant future it will absorb all of their production.  Shortly after Egypt could become an oil importing country.  This has the additional burden of reducing their foreign exchange.  Two, the Egyptian population continues to grow.  It's at about 82 million.  This has increased the pressure to convert arable land into urban city-scapes.  Which brings us to the third point.  Egypt is the worlds largest importer of wheat.  Egypt cannot feed itself by its own devices.  All three of these factors are related and exacerbate each other.

My point is this.  Mubarak notwithstanding, to what degree would any leader be constrained by energy, food, and money?  It seems that Egypt is at the front of a perfect storm and Mubarak just happens to be at the helm.  Not that I have a lot of sympathy for a thuggish dictator, but wouldn't anyone else be confronted by the same set of problems?  Mubarak's cravenness to the Washington Consensus certainly hasn't helped the situation.  Egypt needs solutions to its crises in energy, food, and finance, not a collection of tanks, tear gas canisters, and jet aircraft.

Whoever takes control of Egypt will have some hard choices.  If it's a Mubarak clone, he'll likely find that BAU is falling apart.  If it's a populist dedicated to solving the population's problems, he'll have to come to terms with a new role for Egypt in the Middle East.  That will upset some powerful interests including Washington and Israel, to name but two.

I hope the demonstrators realize that toppling Mubarak is just the start in a long difficult process to bring Egypt into its post peak oil era.  I hope they succeed.

Jbarney's picture
Jbarney
Status: Silver Member (Offline)
Joined: Nov 25 2010
Posts: 233
Re: Egypt and Peak Oil

I found your post interesting, but I have been pondering a different view.  I understand Egypt's poverty level and their situation with respect to peak oil...but my question is a bit different.

To what extent are the USA economic policies responsible for what is happening over there?  If a country of 80 million people with nearly 40 million living in relative poverty...and the price of food is sky rocketing...to what extent is the USA's inflation policies causing the unrest?  If Egypt already importants a lot of its food...If so much of the country is already in poverty...could our economic polices really be driving the unrest? Are the prices of the "basics" rising over there because of our printing so much money into existance...causing inflation?

If so, the long term implications of QEI and QEII are troubling.

 

Jason

 

xraymike79's picture
xraymike79
Status: Diamond Member (Offline)
Joined: Aug 24 2008
Posts: 2040
Re: Egypt and Peak Oil
Jbarney wrote:

I found your post interesting, but I have been pondering a different view.  I understand Egypt's poverty level and their situation with respect to peak oil...but my question is a bit different.

To what extent are the USA economic policies responsible for what is happening over there?  If a country of 80 million people with nearly 40 million living in relative poverty...and the price of food is sky rocketing...to what extent is the USA's inflation policies causing the unrest?  If Egypt already importants a lot of its food...If so much of the country is already in poverty...could our economic polices really be driving the unrest? Are the prices of the "basics" rising over there because of our printing so much money into existance...causing inflation?

If so, the long term implications of QEI and QEII are troubling.

 

Jason

 

 

Of course our policies have created the mess occuring there. See here: #613 and #614

Dorrian's picture
Dorrian
Status: Bronze Member (Offline)
Joined: Sep 15 2009
Posts: 28
Re: Egypt and Peak Oil

@DurangoKid: You wrote (emphasize by me):

Since then the fraction of production allocated to domestic use has increased and in the not too distant future it will absorb all of their production.  Shortly after Egypt could become an oil importing country.

Well, I guess the "not too distant future" is now. Quote from the Oil Drum article:

Starting about 2010 or 2011, Egypt will change from an oil exporting nation to an oil importing nation

This graph from that mentioned article is very important:

You can clearly see that the line of consumption almost met the level of production by the end of 2009.

So we have:

  • a country moving from oil exporting to importing
  • a price of 100+ $ per barrel
  • a country being the biggest importer of wheat (9.500.000 metric tons as of 2009)
  • skyrocketing commodity prices
  • disillusioned youth and high unemployment rate
  • the breakup of a totalitarian police state that has been stable for 30 years
  • a continuing population growth of 2% per year (population doubled during the last 35 years)

I hate to be pessimistic, but I don't think this is going to end well.

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