Peak Oil
Future oil shortages and mitigation/adaptation options
for Australian cities
Bruce Robinson, Convenor
Look out !!
Something serious
is looming on the radar
???
?
1
Peak Oil
Future oil shortages and mitigation/adaptation options
for Australian cities
Bruce Robinson, Convenor
Look out !!
Something serious
is looming on the radar
???
?
2
www.ASPO-Australia.org.au
An Australia-wide network of professionals working to reduce oil vulnerability
Working groups
Urban and transport planning
Town planning professionals (being formed)
Finance Sector
Health Sector
Social Services Sector
Remote indigenous communities
Active transport (bicycle & walking)
Agriculture, Fisheries and Food
Biofuels
Oil & Gas industry
Regional and city working groups
Construction Industry
Public transport sector
Defence and Security
Children and Peak Oil
Young Professionals working group
Part of the international
ASPO alliance
3
Outline
Peak Oil
40
This is about oil, not energy in general.
30
Transport (largely)
Global oil supply, not just Australia's
20
but
when?
10
● What is Peak Oil ?
0
1930
1
21
1970
41
61
2010
81
101
2050
121
the time when global oil production stops rising and starts its final decline
We will never "run out of oil"
● When is the most probable forecast date ?
? 2012 +/- 5 years
● Peak Exports is likely to occur sooner
● Oil vulnerability assessment and risk management plans are crucial
for city planning, and for governments at all levels
●
Why does it seem like all decision-makers are in a state of denial ? ?
4
Macquarie
"The Big Oil Picture:
We're not running out, but that doesn't mean
we'll have enough"
report September 16th 2009
Financial Times
September 17th 2009
2005
2009
2013
Toronto
5
Key oil figures were distorted by US pressure, says whistleblower
Exclusive: Watchdog's estimates of reserves inflated says top official
guardian.co.uk, Monday 9 November 2009
The world is much closer to running short of oil
than official estimates admit, according to a
whistleblower at the International Energy
Agency who claims it has been deliberately
underplaying a looming shortage for fear of
triggering panic buying.
2008
6
Two analogies for Peak Oil risks
1. Hurricane Katrina
(New Orleans, 2005)
2. US Financial Crisis
(World, 2008-09)
Can we learn to prepare for
probable events rather than
just hoping business will be as usual ?
What are the reasons for the ubiquitous and
very risky "no-worries" attitudes of decisionmakers
KOSPI
7
First Major Article
about Peak Oil
Scientific American March 1998
1995
www.aspo-australia.org.au/References/Campbell%20Laherrere%20Scientific-American-March-98.pdf
8
www.csiro.au/resources/FuelForThoughtReport.html
9
August 2008
www.chathamhouse.org.uk/publications/papers/view/-/id/652/
October 29 2008
Time for an energy bail-out
Peak oil is just five years away,
and we must start to plan now to avert a truly ruinous crisis
www.peakoiltaskforce.net 10
The world is heading for a catastrophic energy crunch
that could cripple a global economic recovery
because most of the major oil fields in the world have
passed their peak production,
a leading energy economist has warned
Fatih Birol, chief economist of the International Energy Agency (IEA), the
developed world's energy watchdog
The IEA "estimates that the average
production-weighted observed decline rate
worldwide is currently 6.7% pa for fields that
have passed their production peak”.
11
2008
"Even if oil demand were to remain flat to 2030, 45 m barrels/day of gross
capacity -roughly four times the capacity of Saudi Arabia - would be needed just
to offset the decline from existing fields"
12
Australian
lecture tour
June 2009
Prof Kjell Aleklett
Global Energy Systems
Uppsala University, Sweden
13
International Energy Agency (OECD)
2008
WEO 2008 and
Uppsala Oil
Outlook 2008
Uppsala
Global Energy Systems
group
2008
Using the same IEA data
fields to be developed and yet to be
found, and the same natural gas
production
Different conclusions.
IEA production forecasts are "outside
reality", not possible.
(because IEA have assumed impossible
production rates from the reserves)
14
"A MIDDLE EAST VIEW OF THE GLOBAL OIL SITUATION"
A.M. Samsam Bakhtiari
National Iranian Oil Company
May 2002
Global oil crunch at the horizon --- most probably within the present decade.
"...It would take a number of miracles to thwart such a rational scenario..
A series of simultaneous miracles is not possible --for there are limits
even to God Almighty's mercifulness".
“Noah built his ark before it started raining”
It is very hard to build an ark under water !!!
We must start preparing our cities for Peak Oil
in advance
www.isv.uu.se/iwood2002
15
Dr. Sadad I. Al Husseini, ex Saudi Aramco
Oil and Money Conference, London, October 30, 2007
...predicts a 10 year plateau
a structural ceiling determined by geology
Price
$/barrel
Production
M b/day
100
90
80
70
Economists say "As prices rise, production will increase".
Clearly false from these data.
16
Germany, October 22 2007
Fig. 7 Oil production world summary
IEA WEO 2008
www.energywatchgroup.org/fileadmin/global/pdf/EWG_Oilreport_10-2007.pdf
2008
17
A simple observation -- or why peak
will be earlier than most people expect
Chris Skrebowski
Editor, Petroleum Review,
London
‘Global production falls when loss of output from countries in
decline exceeds gains in output from those that are expanding.’
Expansion
Decline
18
THE GROWING GAP
Regular Conventional Oil
Billion barrels of oil per year
Longwell, 2002
19
20
Australia uses 51,000,000,000 litres of oil each year
a cube of about 370 metres size
80% of Australia’s oil usage is in transport
If Australia’s 20 M tpa wheat crop → ethanol = ~10%
Perth’s Central Park
building is 249 m high,
to top of tower
100 ml of oil contains 1 kWh of energy.
Enough to move a small car to the top of the Eiffel tower
21
ABARE Australian Commodities
March 2009
22 million in 2006
22
Million barrels/ day 2008
BP Statistical Review, 2009
Australia uses
0.94
China
8.0
US
19.4
World
84.4
US 1 cubic km oil / year
Australia
l
China
1 km
l
United States
23
Mortgage and Oil Vulnerability
in Perth
www.griffith.edu.au/__data/assets/pdf_file/0003/88851/urp_rp17_dodsonsipe-2008.pdf
24
Sunshine Coast
Regional Council
September 2009
Maribyrnong City Council’s
Peak Oil Contingency Plan
a first for Australia
25
Australia
Actual
Forecast
1.0
Million barrels/day
}
0.8
Consumption
$15.7 billion
2008/09
0.6
0.4
P50
0.2
Production
0.0
1965
1975
1985
1995
2005
2015
2025
26
www.ASPO-Australia.org.au
General priorities for facing Peak Oil
1: Awareness and engagement
2:
People solutions
Frugality
Efficiency
Last: Alternative fuels and technologies
Failure to act now will prove incredibly costly
We must recognise the urgency, and leave the
"business as usual" cult.
Oil vulnerability assessment and risk
management are crucial important tools for
planners, governments and investors.
Building more distant suburbs, urban freeways
and tunnels will soon be seen as crazy
These slides at http://tinyurl.com/Cities-Peak-Oil
Hint: Check your superannuation
is not being invested into
urban toll-roads,
tunnels and airports.
1ADX 245
♦
STATE OF AWARENESS
27
a few more slides follow,
in case they are needed for questions
28
Australian Government Policy and Action Options
1: “Talk about it, Talk about it”
2. Engage people, “Participatory democracy”
3. Dismantle the "perverse policies" that subsidise heavy car use and
excessive freight transport.
4. Encourage frugal use of fuel, and disadvantage profligate users.
Fuel taxes should be incrementally raised to European levels to reduce usage.
5: SmartCard tradable personal fuel allocation system. A flexible mechanism for shortterm oil shocks, as well for encouraging people to reduce their fuel usage..
6. Concentrate on the psychological and social dimensions of automobile dependence,
not just “technological fixes”
7. Implement nationwide "individualised marketing" travel demand management.
8. Railways, cyclepaths and public transport are far better investments than more
roads.
9. Give priority for remaining oil & gas supplies to food production, essential services
and indigenous communities, using the Smart-Card system.
10. Review the oil vulnerability of every industry and community sector and how each
may reduce their risks.
29
Australian petrol & diesel rationing using 2008 technology
Smart-card based, scalable, tradeable, flexible, quick to change, equitable, transparent.
Fuel allocations should be per person, not per vehicle, and depend on
Location
(inner or outer suburb, public transport access, regional or remote)
Health status (elderly or infirm, expectant mothers with toddlers), less for the fit
who can ride a bicycle 20kms if needed
Job importance (defence, essential services, hospitals, food)
People are encouraged to conserve by being
able to trade unused allowances electronically
and automatically.
Martin Feldstein,
Chief Economic Advisor to
President Reagan,
now at Harvard, (WSJ 2006)
"tradeable gasoline rights
are more efficient than
fuel economy standards
or gasoline taxes"
30
"Anyone who believes exponential
growth can go on forever in a finite
world is either a madman or an
economist."
Metropolitan passenger travel Australia
BTRE
Car
Total Energy Usage
Australia, 2000
ABARE
Other
Gas
Kenneth E. Boulding,
economist
1910-1993
Oil
Coal
31
WTI
ABARE's oil price forecasts have proven to be
systematically low in normal times
US$/bbl
160
140
Actual price
120
100
March 2009
prediction
80
March 2008
prediction
60
March 2007
prediction
40
March 2006
prediction
20
March 2005
prediction
11
Se
p-
09
Se
p-
07
Se
p-
05
Se
p-
03
Se
p-
Se
p-
01
0
March 2004
prediction
32
Gb/year
50
40
Efficiency
Transport
mode shifts
Demand
Growth
World oil
shortfall scenarios
Pricing / taxes
30
City design/lifestyle
Other petroleum fuels
gas, tar-sands
Other fuels
Past Production of Oil
20
Forecast
Production
10
0
1930
Deprivation, war
2009
1950
1970
1990
2010
2030
2050
• no single “Magic Bullet” solution,
• probably no replacement ever for cheap plentiful oil
• Urgent preparation and adjustment are vital
33
“OK, it’s agreed – we announce that to do nothing is not an
option and then we wait and see how things pan out”
from ‘Private Eye’
34
Other
Gas
Energy White Paper, 2003
Oil
Coal
35
Government of Western Australia
STATE LIQUID FUEL SHORTAGE
EMERGENCY PLAN
OPERATIONAL PLAN
PREPARED BY
ENERGY SAFETY DIRECTORATE
DEPARTMENT OF CONSUMER
AND EMPLOYMENT PROTECTION
20 Southport Street, W Leederville WA 6007
Tel: (08) 9422 5200
Fax: (08) 9422 5244
January 2003
Current WA Government planning for a sudden fuel shortage
Ineffective and inequitable. Odds & Even number plates etc
Nothing significant about public transport
36
discussion paper, Liquid Fuel Emergency Act review, 2004
37
Water Analogy for Fuel Pricing
A rational pricing system
Perth domestic water
Renewable scarce resource
A personal fuel SmartCard
system could tax petrol and
diesel on a sliding scale like
water.
People could trade unused
allocations to those who
want more fuel.
$2.00
Perth domestic water prices
per kilolitre 2008
$1.50
$1.00
$0.50
$0.00
0
150
350
550
Consumption range kilolitre/year
950
38
There are innumerable “Perverse” subsidies
to
roads,
4WDs
profligate vehicle users
heavy inefficient vehicles
FBT tax on cars
as part of salary
FBT tax on motor vehicles
30%
20%
10%
Supermarkets subsidise
CO2 $18/tonne
with their fuel dockets
0%
0
15,000
25,000
km range
40,000
Supermarket petrol discounts
People who walk to the
supermarket are subsidising
those who drive in the big SUVs
39
Petrol taxes OECD
Au$
cents/litre
UK
Korea
€
0.80
0.60
Australia
0.40
0.20
US
0.00
IEA Dec 2003
40
The UK Fuel Tax Escalator Margaret Thatcher
pence
Nominal tax per litre (pence)
50
Real tax
40
30
20
10
0
1988
1990
1992
1994
1996
1998
Australian fuel taxes should be raised to European
levels on a fuel tax escalator
41
Australia
US
China
42
Bicycles are powered
by biofuel,
renewable energy,
either Weetbix or
abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
43
Urban passenger mode shares Australia
100%
Car
90%
Mode share (per cent)
80%
Car
High automobile-dependence
70%
60%
50%
40%
Public transport share
is very low
30%
Rail
20%
Other
Bus
10%
0%
1945
1950
Potterton BTRE 2003
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
44
Million barrels
per day
(equivalent)
140000
140
120000
120
kb/doe
100000
100
80000
80
60000
60
WORLD OIL & GAS PRODUCTION
ASPO 2008 base case
NonCon Gas
Gas
NGL
Polar Oil
Deepwater Oil
Heavy Oil
Reg.Oil
40000
40
20000
20
00
1930
2009
1950
1970
1990
2010
2030
45
Iran 10c/litre
Venezuela 2c/l
Jeff Rubin
September 2007
Canadian Imperial Banking
Corporation
www.aspo-ireland.org/contentfiles/ASPO6/2-3_ASPO6_JRubin.pdf
46
47
48
49
50
51
Gb/year
50
40
30
20
10
50
Demand
Trend
World oil
shortfall scenarios
40
Shortfall
Past Production of Oil
30
20
Forecast
Production
10
0
1930
2007
2030
2010
2030
0
1950
1970
1990
2050
By 2030, the gap is equivalent to 6,000 nuclear reactors
52
February 2004
By 2015, we will
need to find,
develop and
produce new oil
and gas equal to
eight out of
every 10 barrels
being produced
today.
53
Why are oil supplies peaking?
• Too many fields are old and declining
•
54 of 65 oil producing countries are in decline!
• Oil supply will peak in 2010/2011 at around 92-94 million
barrels/day
• Oil supply in international
trade may peak earlier
• Collectively we are still
in denial
54