Transcript Slide 1

Peak Oil
A valuable lever for bicycle advocacy
Bruce Robinson
Convenor, ASPO-Australia
7th February 2007
1
www.ASPO-Australia.org.au
An Australia-wide network of professionals working to reduce oil vulnerability
ASPO-Australia Working groups
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Finance Sector
Health Sector
Social Services Sector
Remote indigenous communities
Active transport (bicycle & walking)
Agriculture, Fisheries and Food
Biofuels
Urban and transport planning
Oil & Gas industry
Behavioural change
Local Government sector
Regional and city working groups
Construction Industry
Freight sector
Public transport sector
Defence and Security
Economics
Tourism
Young Professionals working group
 Senate inquiry submission
Senate Inquiry into Australia's
future oil supply and alternative
transport fuels
ASPO-Australia is part of
the international ASPO movement
2
Outline
Peak Oil
40
What is Peak Oil ?
the time when global oil production
stops rising and starts its final decline
but
when?
30
20
10
We will never "run out of oil"
0
1930
1
When is the most probable forecast date ?
21
1970
41
61
2010
81
101
2050
121
perhaps 2010-2015
What mitigation and adaptation strategies are practical?
How can we use Peak Oil to enhance the case for bicycle transport?
3
Many books about
Peak Oil
Brian Fleay
Perth
1995
2005
Campbell &
Laherrère March 1998
Deffeyes
2001
2006
Campbell 2003 Heinberg 2003
Roberts 2004
4
Running on empty
August 27, 2006
You're about to hear two of the scariest words in the English
language — "peak oil".
The point where oil production reaches its absolute peak; the point
when supplies start running out.
Oil prices will keep rising: analyst
The Age, August 21, 2006
Chris Skrebowski. "The price of oil will
31/8/06
WA Planning and Infrastructure Minister
Alannah MacTiernan said that major Federal
continue to rise until world oil production peaks in 2010
at around 94 million barrels of oil per day
investment in public transport was vital if Australia was to avoid
major disruption as global petroleum production
reached its peak.
Four Corners Peak Oil?
10/07/2006
Dr Brian Fisher of ABARE was
positively jovial.
If the price of eggs is high enough,
even the roosters will start to lay.
Sept 11 2006
The world has an abundant
supply of oil, ExxonMobil Australia chairman Mark
Nolan said today.
He debunked the theory of peak oil, which
suggests oil supplies have peaked and will
dwindle over the next 20 years.
Oil production limit reached: expert
ABC News July 10, 2006.
Former National Iranian Oil Company executive Dr Ali
Samsam Bakhtiari has told the Financial Services Institute in
Sydney the world's oil fields are producing as much oil as they
can.
5
APPEA
April 2005
Perth
Australian Petroleum Production &
Exploration Association conference
•Please put your hand up if
you think that we have
crossed the Hubbert Peak and
we are entering a demand
driven pricing era,
•and hands up those who
Eric Streitberg
Executive Director
don’t?
ARC Energy Limited
•Undecided
•1/3rd
•1/3rd
•1/3rd
6
US oil production: Peak in 1970
10
Mb/d
2002
Deep Water
Alaska
US-48
5
0
1930
1970
2010
2050
Jeremy Gilbert, ex BP www.PeakOil.net
7
Past World Oil Production
and Forecasts
440
0
330
Gb pa 0
220
0
110
0
000
1930
Dr Ali Samsam Bakhtiari
Iran
IEA
Deffeyes
Shell
Prof. Bauquis
France
Bauquis, Total
ASPO & Skrebowski
2005
1970
2010
2050
Chris Skrebowski
UK
Prof. Aleklett, ASPO
Sweden
8
Chris Skrebowski
Editor, Petroleum Review, London
The practical realities
•
•
•
•
The world needs oil production flows
Consumers need delivery flows
Reserves are only useful as flows
Worry about flows not reserves
"40 years reserves left at current production rates"
....This is a very misleading statement
9
Alaskan North Slope Production
Reserves grow -- Production falls
Prudhoe Bay, Alaska
10
A simple observation -- or why peak will be
earlier than most people expect
‘Global production falls when loss of output from
countries in decline exceeds gains in output from
those that are expanding.’
Expansion
Decline
11
Why are oil supplies peaking?
•
•
•
•
•
We are not finding oil fast enough
We are not developing fields fast enough
Too many fields are old and declining
We are short of people and equipment
Oilfield inflation is soaring
12
The real oil discovery trend
Longwell, 2002
13
The real oil discovery trend
Longwell, 2002
1995-2025
Discovery
Forecast
USGS
14
Oil production flows -- all new
flows take two to twenty-five years
Global new field
Tar sands and Heavy oil
discovery (7-10bn b/y)
Biofuels + others
Known oil reserves
in production (90%)
Current supply
84mn b/d or 30bn b/y
NIP
10%
EOR
Yet-to-find
Yet-to-find
probable
possible
2 to 25 years
15
How old are the fields?
• Of the 18 largest fields, 12 are in decline, 5 have
some potential and 1 is undeveloped
• The 120 largest fields give 50% of total
• 70% of production from fields 30+ years old
• Few large recent discoveries
• Relying more and more on ageing fields and new
small discoveries
16
What are the BP statistics saying?
• OECD production peaked in 1997 and has now
declined by just under 2 million b/d (8.8%)
• Non-Opec, non-FSU production peaked 2002
• North America/Mexico peaked in 1997
• North Sea - UK/Norway/Denmark peaked in 2000
now declined by 1.2 million b/d (19.2%)
• Around 25 significant producers in decline
• About 28% of global production from decliners
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Million barrels/day
The UKCS depletion reality -production down to 1mn b/d by 2010
UK North Sea
UKCS oil production by month
1999-2010
3.000
2.500
2.000
1.500
1.000
0.500
0.000
Year
18
North Sea production by field
Forties monthly production to date
19
The top five decliners in 2005
Country
USA
Norway
UK
Mexico
Syria
Production Peak Year Decline
1970
6.8mn b/d
1985 -5.51%
2.9mn b/d
2001 -7.50%
1.8mn b/d
1999 -11.00%
3.8mn b/d
2004 -1.60%
0.5mn b/d
1995 -11.40%
20
How the Megaprojects database is
created and used
Megaprojects Report, Petroleum Review April 2006
• All publicly available data
• 2006-2012 148 Opec and 70 non-Opec projects
• Opec data (from their website)
• Incremental production allocated by start up date
• Graphed to show volumes available to meet
demand
21
Global liquids capacity to 2015
120.00
110.00
Million b/d
100.00
Supply IEA
Capacity CS
90.00
Capacity CERA
80.00
70.00
60.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Year
22
Chris Skrebowski's conclusions
• Supply will remain tight and prices high barring a
major economic setback
• Oil supply will peak in 2010/2011 at around 92-94
million barrels/day
• Oil supply in international trade may peak earlier
than the oil production peak
• Collectively we are still in denial
• WE HAVE JUST 1,500 DAYS TO PEAK
23
actual price
March 2006
prediction
March 2005
prediction
March 2004
prediction
March 2003
prediction
Date
120
ASPO Random number generator
100
"If the price of eggs is
high enough, even the
Series1
roosters
will start to
Series2
lay."
80
60
40
ABARE to Senate inquiry into
Australia's future oil supplies
20
Jan-07
Sep-06
May-06
Jan-06
Sep-05
May-05
Jan-05
Sep-04
May-04
Jan-04
Sep-03
May-03
Jan-03
Sep-02
May-02
Jan-02
Sep-01
May-01
Jan-01
0
Sep-00
WTI price, US$/bbl
70
60
ABARE forecasts
50
40
30
20
10
"Forecasters' Droop" ??
0
Dec-00 Apr-02 Aug-03 Jan-05 May-06
24
Australia’s oil production and consumption
1965-2030
Actual
Forecast
1.0
1.0
Million barrels/day
Consumption
0.8
0.8
0.6
0.6
Production
0.4
0.4
P50
0.2
0.2
0.0
0.0
1965
1
11
1985
21
31
2005
41
51
2025
61
Geoscience Australia, APPEA, ABARE
25
Australia uses
45,000 megalitres
of oil each year
a 360m cube
Sydney Harbour Bridge
is 134 m high
80% of Australia’s oil usage is in transport
=1.3 EfT3
If Australia’s 20 M tpa wheat crop → ethanol = 9%
100 ml of oil contains 1 kWh of energy.
Enough to move a small car to the top of the Eiffel tower
26
Million barrels/ day 2005
BP Statistical Review, 2006
Australia uses
0.9
China
7.0
US
20.6
World
82.5
US 1 cubic km oil / year
Australia
l
China
1 km
l
United States
27
ENERGYwww.energyfiles.com
FILES
Energyfiles Ltd
Oil production is not shared equitably
US:
5% of world's population uses 25% of world oil
China: 21%
8%
28
1000 Barrel/day
6000
UK
4000
2000
0
1965
Consumption
1970
1975
1980
-2000
1985
1990
1995
2000
2005
Export/Import
Production decline rate ~ 10%
UK will be a net importer by 2007
-4000
Quelle: BP Analyse: LBST, ß
29
1000 Barrel/day
6000
Indonesia
3500
Consumption
1000
1965
1970
1975
1980
1985
1990
1995
2000
2005
Export
-1500
-4000
Quelle: BP 2003; Analyse: LBST, ß
30
1000 Barrel/day
Consumption
6000
250
China
200
4000
150
100
2000
Production50
0
1965
0
1970
1975
1980
1985
1990
1995
2000
20051
3
5
7
9
11 13 152020
17
-2000
-4000
Imports
Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi
31
Common Myth
Leonardo Maugeri
ENI SPA Rome
Economist
Ultra-optimist
15th December 2003
“..just as the Stone Age did not end for the lack of stones,
the Oil Age will not end because of the scarcity of oil.
Rather oil will inevitably be surpassed in convenience by a
new source of energy in the future”.
Biomass
Coal
Oil (& gas)
Walking, horses, horse & cart, horse-drawn barge
Trains
Cars, trucks, trains, planes
??
Is there anything else better than oil & gas ??
or even as good ?
Thermodynamics? Theology?
32
Realist ?,
Pessimist ?
12th January 2004
Richard Miller
BP Exploration Operating Co. Ltd.
Middlesex, UK
…oil, the most energy-dense of the natural, non-nuclear
fuels on the planet..
But there isn't anything conceivable that could
replace conventional oil, in the same quantities or
energy densities, at any meaningful price…
33
Worldwide Crash Program Mitigation of
Conventional Oil Production Peaking
A Study for DOE NETL
Hirsch, Bezdek and Wendling, 2005
35
EOR
25
Coal
Liquids
15
Heavy Oil
5
GTL
Impact
(MM bpd)
Efficient
Vehicles
0
0
5
10
15
Years After Crash Program Initiation
20
Delay / Rapid growth.
Roughly 35 MM bpd at year 20.
34
1.0
Demand
Past Oil Production
and Forecasts
0.8
0.6
Australia
0.4
Geoscience Australia
Total
0.2
Bass Strait
0.0
1930
1930
440
0
330
Gb pa 0
220
0
110
0
000
1930
1970
1970
2010
2050
2050
2010
IEA
World
Shell
ASPO and others
Bauquis
Samsam Bakhtiari
Deffeyes
ASPO
2005
1970
2010
2050
35
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
2005
2030
0
1950
1970
1990
2010
2030
2050
By 2030, the gap is equivalent to 6,000 nuclear reactors
36
Les Magoon,
USGS 2001
Is there a possible transition to another fuel?.
Probably not.
Can we run ALL our cars on water, hydrogen, ethanol, GTL ??
No.
EROEI (Energy return on energy invested)
Very important
37
December 2005
July 2006
38
VIPER Oil vulnerability and socioeconomic factors
39
VAMPIRE Oil vulnerability and mortgage rate risk
40
We must acknowledge oil depletion
All of us: industry, governments
community, media, academia...
We must not let the opportunities slip away
Many of the policy options to reduce fuel usage
will also lead to economic opportunities and
healthier and happier communities.
We are very well placed globally
 Long, growing awareness of oil depletion,
(Senate report)
 World-leading demand management skills
TravelSmart and water conservation
 Considerable uncommitted gas reserves
 lots of bicycles and bicycle advocates
Failure to act now will prove incredibly costly
1: Oil vulnerability risk assessment and management
2: Check your superannuation is not being invested
into urban toll-roads, tunnels and airports.
www.ASPO-Australia.org.au
41
Bicycles are powered
by biomass,
renewable energy,
either Weetbix or
abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
42
a few more slides follow,
in case they are needed for questions
43
Gb/year
50
40
World oil
shortfall scenarios
30
Past Production of Oil
Efficiency
Demand
Growth
Transport
mode shifts
Pricing / taxes
City design/lifestyle
Other petroleum fuels
gas, tar-sands
Other fuels
20
Forecast
Production
10
0
1930
Deprivation, war
2005
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
44
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 personal fuel allocation system. A flexible mechanism for short-term 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 better investments than more roads.
9. Give priority for remaining oil and 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.
11 Promote through the United Nations an Intergovernmental Panel on Oil Depletion,
and a Kyoto-like protocol to allocate equitably the declining oil among nations. An
international tradable sliding scale allocation mechanism is one hypothetical option.
45
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.
46
Gboe/pa
World
All Oil
50
NGLs
40
Polar Oil
Deep Water
30
Heavy
Regular Oil
20
10
2005
0
1930
}
Oil
1950
1970
1990
2010
2030
2050
www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004 47
Gboe/pa
World All Oil & Gas
(gas at 10,000 cft=1bbl)
50
40
30
Non-conventional Gas
Gas
NGLs
Polar Oil
Deep Water
Heavy
Regular Oil
}
Gas
20
}
10
Oil
2005
0
1930
1950
1970
1990
www.PeakOil.net ASPO 2004
2010
2030
2050
48
Australia
US
China
49
ENERGYFILES
www.energyfiles.com
50
Australian Parliament,
Senate
Rural and Regional Affairs
and Transport References Committee
Inquiry into
Australia's future oil supply
and alternative transport fuels
194 submissions
Interim report "Peak between now and 2030"
September 2006
51
We must acknowledge oil depletion
All of us: industry, governments
community, media, academia...
We must not let the opportunities slip away
Many of the policy options to reduce fuel usage
will also lead to economic opportunities and
healthier and happier communities.
We are very well placed globally
 Long, growing awareness of oil depletion,
but no reliable information from Federal Govt,
only ABARE, BTRE
 World-leading demand management skills
TravelSmart and water conservation
 Considerable uncommitted gas reserves
Failure to act now will prove incredibly costly
Govts should set up "Office of Oil Vulnerability"
"Oil vulnerability risk assessment and management"
www.ASPO-Australia.org.au
52
This is the real new capacity to 2012
(Peak in first quarter of 2011)
5000.0
4000.0
thousand barrels/day
3000.0
2000.0
1000.0
0.0
2004
2005
2006
2007
2008
2009
2010
2011
2012
-1000.0
-2000.0
annual increment
total
20% Slip
90%
Depletion
Net
53
Running on empty
August 27, 2006
You're about to hear two of the scariest words in the English
language — "peak oil".
The point where oil production reaches its absolute peak; the point
when supplies start running out.
Oil prices will keep rising: analyst
The Age, August 21, 2006
Chris Skrebowski. "The price of oil will
31/8/06
WA Planning and Infrastructure Minister
Alannah MacTiernan said that major Federal
continue to rise until world oil production peaks in 2010
at around 94 million barrels of oil per day
investment in public transport was vital if Australia was to avoid
major disruption as global petroleum production
reached its peak.
Four Corners Peak Oil?
10/07/2006
Dr Brian Fisher of ABARE was
positively jovial.
If the price of eggs is high
enough, even the roosters will
Sept 11 2006
The world has an abundant
supply of oil, ExxonMobil Australia chairman Mark
Nolan said today.
He debunked the theory of peak oil, which
suggests oil supplies have peaked and will
dwindle over the next 20 years.
Oil production limit reached: expert
ABC News July 10, 2006.
Former National Iranian Oil Company executive Dr Ali
Samsam Bakhtiari has told the Financial Services Institute in
Sydney the world's oil fields are producing as much oil as they
can.
54
The Peak Oil Debate
Will global oil production start its final
decline soon, or not?
ENERGYFILES
www.energyfiles.com
Probably yes. As the Senate report shows,
the "no-worries" camp are remarkably short
on reliable future production data and
remarkably long on hope.
offshore
What should we do.?
onshore
Governments and businesses should each
set up an "Office of Oil Vulnerability" to help
people plan for the probability of Peak Oil.
There are many options useful for mitigation
and adaptation.
No "Silver Bullet", but "silver buckshot"
Oil vulnerability risk assessment and management
is an important mechanism of minimising exposure
and maximising opportunities. It is a new and
promising field.
Hint:
Check your superannuation is not being invested
into urban toll-roads, tunnels and airports.
www.ASPO-Australia.org.au
[email protected]
08-9384-7409 0427 398 708
55