The Export Land Model (ELM) is Jeffrey J. Brown‘s geopolitical model depicting, with present accuracy, exponential decline in oil exports from net oil exporting nations (collectively, Export Land) to net oil importing nations (collectively, Import Land).
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Definition
The Export Land Model is defined by fellow, The Oil Drum-frequenting analyst Jeff Vail:
“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.
Description
The Export Land Model is described, succinctly, by a single graph:
