Seven international organizations, including the International Energy Agency, APEC, the United Nations Statistics Division and the Organisation of Petroleum Exporting Countries (OPEC), have been keeping public data on global oil production and exports in the name of transparency in this strategic industry. They call this effort the Joint Organisations Data Initiative or JODI. The last set of figures they published said some very disturbing things. As noted by Bloomberg News, the first thing they noted was that in the month of December, 2010, OPEC's exports dropped 2% as the result of a 4.9% drop in exports by Saudi Arabia. Word was put that the shortfall was entirely the result of a rise in internal demand. Yet that is a staggering rise in demand for only one month's time. However much Saudi demand impacted their monthly exports, most of that fall was almost certainly the result of a drop in their overall oil production. Such a sharp drop in Saudi oil production in just one month, whether it was 4.9%, 4% or even 3 %, is of extreme concern because of the path repeatedly taken by countries who begin producing oil until it inevitably peaks and declines. Their rate of oil production follows the path of a bell curve, with a slow initial startup (a low but increasing oil output), a period of rapidly rising production, a slowdown in growth which levels off at a peak in their total annual production, followed by a slow decline or "bumpy" plateau in output and then precipitous drop to a much lower level that eventually tapers away into nothing. What does that long bell curve mean? If Saudi Arabia's overall oil production is dropping at anything like 3% to 4.9% in a single month, then her overall production may not only have peaked, but may have passed over that bump at the top of the bell curve, straight into the precipitous drop stage of that nation's oil production. Given that Saudi Arabia has long been the world's largest producer and exporter of oil, if she has gone over that edge, if a roughly 4.9% monthly shortfall in output becomes routine, or worse, accelerates, then global oil production is going to be absolutely hammered as a result. There are other permutations to the Saudi story, in particular that the light, sweet crude produce by her fields, especially the Ghawar superfield, have a much, much higher Energy Return On Energy Invested -- EROEI, or the amount of energy you get back in exchange for the overall amount you spent finding, extracting, refining and shipping the oil you produce. Unconventional sources, such as Alberta's tar sands, usually have a very low EROEI, or worse, as in the case of the "oil shale" in the U.S., an effectively negative one. Under normal circumstances, all of the above would be an earthshaking turning point for global oil production. On the positive side, it's actually the minor story. The big story is something else mentioned about oil production in the JODI figures -- total world output fell 14% from a month earlier, with the shortfall mainly resulting from non-OPEC sources, especially in Latin America. Now, the JODI figures cover about 90% of global oil production, and we have every reason to believe that the remaining 10% of production is in countries near, at or past their peak in oil production as well. But leaving that aside, a roughly 14% drop in global oil production in one month, at these prices (approaching and now over $100-a-barrel) is devastating. Especially if it heralds a large number of major, mature oil producers going over the same cliff that Saudi Arabia seems to be descending. After all, 14% is devastating, but up to a point, some crashing producers could see their fall accelerate... until they hit that nice, calm, tapering-off-to-nothing stage. What does all this mean? Well, when I said we have six months of oil left, I wasn't entirely exaggerating. In truth, I think global oil consumption is about to get conserved dramatically, by price if nothing else. Now, is this The End of the World? Or The End of Civilization? Not if we play our cards right. Many industrialized nations could cut back dramatically on oil consumption if they focused intently on the basics and a few longer-term investments. The U.S., for example, can probably keep its agricultural system running on what it still has internally, plus a few buses, while trading food for our further petrochemical needs, as we're more or less in the "slow, tapering stage." But that's trade for our needs, not wants. Our wants will only be supplied (and that to a limited degree) by radical change... probably radical change taking place on a number of fronts, including renewable energy, extremely judicious conservation, and a lot more sustainable, localized food production. I will post further on this subject on this blog. For now, just in case anyone thinks that we're going to run out of oil in the next five minutes, I leave you with a disaster plan I formulated in haste in 2008 when it seemed possible that the U.S. Southeast, in particular, could suffer extreme, localized fuel shortages as a result of hurricanes disrupting America's fuel-distribution system. The above plan is not an exhaustive discussion, but it's a place to start in case you can not wait a day or two for the beginnings of a more advanced strategy. -- One note: The Export-Land Model has proven to be consistently true thus far, and is worth pointing out. Basically, as oil-exporting countries become wealthier, they have a greater capacity and desire to use their excess oil internally, to meet their own people's demand. Which means that their exports reach a point where they are dropping off even more radically than their production levels. Which is, I suspect, one reason America's offshore oil remains a potential reserve source, presently only partially tapped, but theoretically there if needed to help stave off disaster.