I concede the point on Net Exports. In particular, after a discussion in the comments with Jeffrey Brown (the geologist who created the concept), I believe Net Exports help to clearly explain the combined dangers of peak oil and oil subsidies.  Why did I persist in my resistance to the net exports concept so long? Because, from an economics perspective, net exports are an unnecessary complication to my oil supply/demand elasticity model. If the world were filled with economists, there would probably be no need for the concept of net exports. Economist Mike Giberson certainly thinks so.  But the world is filled with people with limited understanding of the “dismal science,” and the economic realities of peak oil affect everyone. It falls to us to explain those economic realities to everyone in the clearest terms possible. And net experts are a lot clearer than elasticity models.  While the net exports concept is a great pedagogical tool, I worry that it may distract us from the ways that even subsidized demand for oil in oil exporting countries responds to changes in the oil price. For instance, Saudi Arabian consumers may not feel the impact of changes in the world price of oil, but their government does.  Soaring oil prices allow Saudi export revenue to increase even as exports decline (see chart below),  Chart by Jim Hansen of Ravenna Capital Management  but the Saudi government still feels the pain of potential revenue lost when their economy gobbles oil for low-value uses like electricity generation. Most of Saudi electricity is generated from oil, a practice most of the rest of the world abandoned when it became prohibitively expensive during the oil shocks of the 1970′s and 80s. Now, it’s only countries like Saudi Arabia, which use subsidized oil, and islands like Hawaii where the use of oil for power is prevalent.  I’ve had difficulty finding information on how much oil it takes to generate a kilowatt hour (kwh) of electricity, but this chart relating oil and electricity prices in Hawaii allows me to estimate it:  From the chart, my estimate is that a $20 increase in the price of oil leads to a 4 cent increase in the price of a kwh of Hawaiian electricity. Hence, the export revenue Saudi Arabia loses by using oil to create electricity is about 20 cents per kilowatt hour, and the total cost is higher because this ignores operations and maintenance (O&M) costs and capital costs.
In ten years, I expect Saudi Arabia to be the "Saudi Arabia" of solar power."
 
  It may be politically difficult for oil producers to cut oil subsidies, but that is not the only lever they have to reduce oil consumption.  Net exports are a great way for conveying the scale and gravity caused by peak oil.  Let's hope they don't distract us from the economic forces that remain at play, even in the most state-controlled markets.