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Giant_and_Dwarf-FIN

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<strong>Giant</strong> <strong>and</strong> <strong>Dwarf</strong>The population explosion in the Arab world over the last 60 years was made possible byhuge oil <strong>and</strong> gas revenues. Oil, however, is a non-renewable resource. Its once vast reservesare being quickly exhausted by mankind’s insatiable appetite for cheap energy. What happensto a country once it runs out of oil resources? A graph of Egyptian crude oil production,consumption <strong>and</strong> exports makes this crystal clear.As in virtually all oil producing countries, Mubarak’s regime gained the support ofEgyptians through low fuel prices. In addition to explosive population growth, cheap fuelled to rapidly growing domestic oil consumption. Together with Egypt’s steadily decliningoil production due to the exhaustion of its oil fields, this policy led to an ever-decreasingflow of oil revenues into government funds. Finally, in 2010, state revenues from oil exportscompletely dried up. But it was oil <strong>and</strong> gas revenues which enabled Egypt to buy wheat tofeed its fast growing population on the world market.Egypt : Nat. Gas2011 exports decreased by 28. %Egypt : Oil2011 exports increased by 196.5 %ConsumptionProductionnet Exportsnet Imports−6 −4 −2 0 2 4 6billion cubic feet per dayConsumptionProductionnet Exportsnet Imports−1.0 −0.5 0.0 0.5 1.0million barrels per dayYear1960 1970 1980 1990 2000 2010Year1960 1970 1980 1990 2000 2010Data: BP Statistical Review 2012 Graphic: mazamascience.comData: BP Statistical Review 2012Graphic: mazamascience.comThe two graphs above 29 show the production of oil <strong>and</strong> natural gas in Egypt (gray color),their domestic consumption (black curve) <strong>and</strong> their export (green color) <strong>and</strong> import (red color).As we can see, up to the 1960s, Egypt was an oil importer. Then the production started to grow<strong>and</strong> at the time of maximum production, Egypt was able to export around half a million barrelsof oil per day. However, in the middle of 1990s Egyptian oil export started to decline because,together with the rapid population growth, domestic oil consumption was also growing, whileoil production started to decline. In 2010 Egypt was forced to import oil again. Egypt’s incomefrom oil exports was replaced by extra expenditures to finance its import. Natural gas productionin 2010 decreased too, but its domestic consumption continued to increase; the inevitableresult was a drop in natural gas exports by 19 %, creating a scene ready for a revolution.29 The graphs come from http://mazamascience.com/OilExport/. This website provides annually updatedgraphic data about developments in extraction, consumption <strong>and</strong> export of oil, natural gas, coal <strong>and</strong>other mineral resources from all around the world.50

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