Transcript The Challenge for Future Agriculture

The Implications of Peak Oil
By
Ron. A Leng
50
Gboe
40
30
20
10
0
1930
1950
Conventional Oil
Heavy
1970
1990
Deepwater
Polar
2010
NGL
2030
Gas
2050
Non-Con Gas
The Challenge for Future
Agriculture


World population is increasing rapidly now 6.5
billion may rise to 10 billion
Food production has to keep pace with
population



Quantity
Quality,largely a balanced protein ,mineral and energy
intake
Protein availability critical for health and well
being of people.Requirements for essential
amino acids from plant and animal protein
Factors in future trends in
animal agriculture


Increasing demand for meat and milk[approx 3% /Year in
Asia
World bank forecasts that this will be met from improved
industrial pig and poultry production [huge increase in the
requirements for grains]

Grain price is tied to the cost of oil

Oil prices are bound to increase as depletion of easily
recovered reserves occurs

Oil use in the world will have to be decreased or made more
efficient to meet eventual pollution problems
All Populations Are Controlled by
Combination of Factors [The 4Ps].




Poverty[Availability and share of
resources]
Pollution [Contamination of the
environment ]
Predation [Taking the resources of others
to survive]
Pestilence [Overcrowding and insults to
the environment allows spread of disease
e.g. AIDS]
IN HUMAN POPULATIONS THE OVERALL FACTOR IS
POLITICS.
Frisch & Leng 2002
Human ingenuity has allowed the
planet to grow to a population of 6.5
billion possibly rising to 9 billion by:




Increasing the resource base in terms of energy, water,
land and food-Poverty
Controlling local pollution and have not yet critically
polluted the atmosphere-Pollution
Containing and overcoming pestilence, though the present
disease pandemics appear to be out of control [HIV
infections and SARS]-Pestilence
Minimising predation of resources [though there is still
unbalanced uses of resources]-Predation
Climate Change is
For Real !
From 1979 to 2003 there
has been significant
depletion of the Arctic ice
cap as shown by satellite
photography
National Geographic Sept. 2004
Just one of the species to become extinct
PEAK OIL--Barely recognised or stuck in “ the too
hard basket” by politicians, scientists and world leaders
The potential of global oil production to peak is
already causing shock waves through the world’s
economy and reshaping geopolitics.
This event will precipitate a cascade of
environmental, economic, political and cultural
change for which we are totally unprepared
It has the potential to eclipse global warming as
the driving force for sustainable development
The Exploitation of Oil Has A Typical Bell Shaped
Curve of Depletion. The World Depletion Curve is
Simply The Sum Of All Fields.
North Sea Oil has followed the pattern of
exploitation precisely as predicted by
Hubbert [1956]
Sturgeon and Caviar
Tasmanian Scallops
Bardi 2005 How general
is the Hubert CurveLisbon ASPO
Production Forecast
50
Gboe
40
30
20
10
0
1930
1950
Conventional Oil
Heavy
1970
1990
Deepwater
Polar
2010
NGL
2030
Gas
2050
Non-Con Gas
500
400
300
200
100
0
Oil Used
Reserves
Yet to be found
ME
Others
Asia
W
Europe
Africa
Latin
America
N
America
-200
Eurasia
-100
ME Gulf
Oil availability [Gb]
Oil has largely run out for many
countries and there is very little to be
discovered
Discovery Trend
The Growing Gap
Confirmed by Exxon-Mobil
60
Discovered
50
Futue Discovery
Gb
40
Production
30
20
10
0
1930
1950
1970
1990
2010
2030
2050
The United States with 2% of World Oil
Reserves Uses 25% of World Oil
80
70
60
50
Oil statistics
40
[%]
30
20
10
0
USA
Reserves
OPEC
Production
Rest of the
World
Consumption
A major problem is getting your mind
around the figures. This huge find [Australian
January 2005] 170 million barrel represents 2 days
of world supplies
Summary of World Oil Supplies 1



Oil use in the world has increased to around 80
million barrels/day or 1 billion barrels are used
every 12 days
All the major oil fields were discovered long ago
and many have exceeded Peak Production and
are in decline. Spare capacity is about 2 million
barrels per day
The discovery of large oil fields [that is>0.5
billion barrels or 60 days of world requirement ]
has dwindle to zero, small finds are occurring but
not at a sufficient rate and global oil production
capacity is contracting by over 1 million barrels
each day every year.
Summary of World Oil Supplies 2

Demand for oil ,particularly by China, India,
Pakistan and some Latin American countries is
increasing at unprecedented rates. Global
demand is expected to increase by 1 million
barrels every day each year
Result: Oil will be a scarce and
expensive resource in years to
come
The Greatest Disappearing Act in the World
Oil
There is a lot more to
a countries oil reserves
than meets the eye
Few [None?] countries
or companies provide
a transparent picture
of their reserves
Lack of transparency of oil reserves,
may hide an imminent oil scarcity





The Middle East has 75% of the world’s
remaining oil.
Ghawar [Saudi Arabia] had 100 billion barrels of
reserves [only 1 field of this size has been
discovered]
Ghawar has been mined, from its beginning, to
maintain high flow rates by pumping in sea water
to lift the oil
Ghawar is now pumping a mix of 55 % water and
45 % oil
Experience shows that when the water cut gets to
70-80% water, the field collapses much more
rapidly then indicated by the Hubbert model
[M C Ruppert[2004] http://www.yubanet.com/artman/publish/areticle_15732.shtml
Saudi Arabia Is Middle East’s Prime Oil
Producer

Most Middle East producers
have passed their prime.





Iran peaked at 6 million
barrels/day in 1970s.
Iraq, Kuwait, Oman, Syria
and Yemen have all passed
peak output.
UAE and Iraq might have
growth prospects.
Many giant Middle East
oilfields are far past Peak Oil.
Saudi Arabia has 36% of
Middle East reserves.
Ghawar, the mother of all oil fields







Discovered in 1948
Huge anticline structure 250km by 30km wide
3400 wells
Reserves when discovered 100 billion barrels
Current production 5 million barrels per day
7% of the Northern tip of the field produces 2
million barrels per day
7 million barrels of water pumped in daily to
recover 5 million barrels of oil
THE PROBLEM: PEAKING OF WORLD
CONVENTIONAL OIL PRODUCTION
Projection
2000
2010
2020
2030
SAIC / MISI
Source
2006-2007
Bakhitari, A.M.S.
2007-2009
Simmons, M.R.
After 2007
Skrebowski, C.
2008
Campbell / ASPO
Before 2009
Deffeyes, K.S.
Before 2010
Goodstein, D.
After 2010
World Energy Council
2010-2020
Laherrere, J.
2016
EIA nominal case
After 2020
CERA
2025 or later
Shell
---------------------------------------------------------------No visible peak
Lynch, M.C.
2007-2008 is most likely time for
massive increase in oil prices




Production will drop by 3-4 million barrels/day
New capacity coming on line will increase by 8
million barrels/day
Spare capacity would be 4 million barrels/day
Therefore 3-4 years of increasing demand,
which is likely to be 1 million barrels /day each
year, will wipe any potential surplus and severe
oil shortages will occur
These predictions do not allow for a sudden
drop in Saudi Oil or disruption to supply by
war, terrorism or political upheaval etc
Peak Oil means supply never grows
and probably begins to decline.
•Demand then exceeds supply.
•Prices rise (but supplies do not).
•Fierce energy competition ensues among key users.
•Economic rationing will divert supplies to highest price
purchasers and highest need areas.
Lifestyles have to change to accommodate
less supply.
Matthew Simmons, Simmons & Company Intl.2005
Price Shocks - the first
signs
Five times what
it costs to produce
70
Brent Crude US $
60
Shocks as production
capacity limits breached
50
40
30
20
Prices rise then crash
with recessions
10
0
1996
1998
2000
2002
2004
2006
2008
2010
Conclusions for global resource
depletion




Bell Shaped”, or
“Hubbert” curve is
approximately valid
Curve shape may be
asymetric (technology
factors?)
Prices start rising before
peak
Rise of prices is
exponential and strongly
oscillating
The CIBC answer
Assessed the likely supply shortfall
and the oil price needed to reduce
demand





2006
2007
2008
2009
2010
1.0mn b/d and $61/barrel
2.8mn b/d and $70/barrel
4.8mn b/d and $80/barrel
6.7mn b/d and $90/barrel
8.9mn b/d and $101/barrel
Who gets hurt if oil becomes
scarce and prices rise




Everyone[ particularly the poor]
USA uses 30% of the world’s oil and imports 25% of
that from Saudi Arabia will be the worst hit
The underdeveloped and developing countries that will
be denied development
The oil producers who may be invaded for oil security
[The oil grab]
The end of oil means more
expensive goods
Most significant effects of
scarce and expensive oil.


Gradual, permanent cut-off of fuel for transport
and for industrial machinery. Global trade will
greatly decline.
Decline in agricultural production--depends
heavily on fertilizers and chemicals made from oil.



massive food shortages, increased by competition for
food crops as feedstock for bio-fuels such as vegetable
oil and alcohol
Shortages of 500,000 other goods made from oil.
Therefore, reduction of virtually all business and
government activity. Very serious unemployment
Where are the likely most sensitive
areas


Environment and global warming[greater use of
coal]
All forms of transport







Car makers and subsidiaries
Tourism
Food/goods transport
Natural resource movement [coal,ores etc]
Wars on terror [USA spends approx $20/barrel for
protection of its supply]
All food producing systems
Social structures Suburbs v City v Self Sustaining
communities
The most serious area may be a
downturn in agriculture and food
production 1


In the developed countries. Reduced industrial scale
farming with single crop such as corn and soybean.
Return to permaculture incorporating microbial activities
for fertilisers and recycling of nutrients
[requiring more people in agriculture]

Social restructuring of rural, city and suburban communities

Production of home grown fuels and competition for food,
feed and feedstock for local consumption and export
The most serious area may be a
downturn in agriculture and food
production 2


Developing countries:
down turn in staples
greater need for small
integrated systems
dependent on
recycling of nutrients
What happens when
another Rwanda or
Dufur[2.4 million
refugees presently
without support]
erupts in a future
world with few food
The need for fuel for cooking could
result in deforestation and erosion
in countries such as Nigeria
Human population explosion
coincided with the increasing
availability of “Cheap Oil”
Billions of People
6
5
?
First Oil Well
4
3
2
1
0
0
500
1000
1500
Anno Domini
2000
2500
Future food production will need to be
based on lower inputs of fossil fuels





Chicken, pork, fish will
become expensive. Reduced
industrial production more
alternative feed systems
Ruminant, horse, rabbit meat
from cellulose biomass will be
more attractive [crop
residues]
Fruits ,vegetables produced
with permaculture principles
will predominate
Crop and animal protein
production will need to be
integrated
It’s still down the track but
needs to be planned now
World Cereal Stocks [Estimated
total carryover of cereals]
700
600
500
Millions of 400
tonnes 300
200
100
0
'98
'99
Total cereals
FAO Rome 2004
'00
'01
Coarse grains
'02
Wheat
'03
Rice
'04
World cereal grain production: total
and per person
350
1800
300
1600
1400
250
1200
200
1000
800
150
600
400
100
50
200
0
0
1950
1960
1970
Total production MMT
1980
1990
2000
Production per person Kg/year
Production/person [kg/y]
World Production[MMT]
2000
GLOBAL CONSUMPTION OF BEEF, PORK AND
POULTRY
1968 - 2003
100000
90000
Pork
80000
MT 000
70000
60000
50000
Beef
40000
30000
20000
Poultry Meat
10000
0
1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Calendar Year
Trends in the world use of
cereal grain as feed for
livestock
1000
900
800
700
Feed grain 600
requirements 500
[Million MT] 400
300
200
100
0
925
592
1983
Developed world
Delgado et al 2002
660
636
1993
1997
Developing world
Total
2020
In the USA approximately 1400 liters of oil
equivalents are expended to feed each
citizen; energy consumption is broken down








31% manufacturing inorganic fertilizers
19% operation of field machinery
16% transportation
13% for irrigation
8% raising livestock [not feed lot feed]
5% crop drying
5% pesticide production
8% other inputs
Does not include energy costs of packaging, refrigeration,transport to outlets
and energy for cooking
45
40
35
30
25
20
15
10
5
0
EU
India
Thailand
China
Cananda
USA
Brazil
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
12
Alcohol Production [bln litres]
World ethanol production by country. USA
is likely to become the world’s largest
producer using maize as the feedstock
Berg C[2003]World biofuel production Int. Sugar J, 1 [1] 5-15
Ethanol Inducing Policies are
being applied widely in the world
How the US Farm policy is seen by Peter
Nicholson Australian July 31st 2003
Fuel on their minds
Major powers jockey for position
and risk all-out war before the
2007-8 Oil Cliff [ MC Ruppert 2005.
Writing in the wilderness publications].
Nicholson, Australian August 2004
Australia’s available energy supply in
years at current production levels.
Source :Securing Australia’s Energy Future[2003]
Australia is in a particularly dire situation considering the alarming
decline in Australia's self-sufficiency in crude oil, which forecasters
say means we will have to import most of our crude oil and
petroleum products from overseas by 2008.Which corresponds with
ASPO's predicted global peak.
http://www.energybulletin.net/newswire.php?id=698
350
Commercial demonstrated resources
Years of supply
300
250
200
150
100
50
0
Black coal
Natural gas
Uranium
oil
Oil-shakers?
Australia’s proven reserves were
downgraded by 50% for oil and
60% for gas in a recent
government document yet we go on exporting
Use of energy for grain production
"modern" vs "traditional" systems
12
Energy per unit grain, MJ/kg
10
8
"Modern"
6
4
"Traditional"
2
0
USA (rice)
UK (w heat)
China (rice) Bangladesh (rice)
USA (maize) Philippines (rice) Latin A (rice)
Source: Pretty 1995
Transport is 95% dependent on inexpensive oil:
However the infrastructure can still be helpful!!!
70% of oil demand
is for transport in USA
80% in Australia
The future price of grain will favour
the ruminant?




Ruminants have the capacity to use biomass not
used by monogastric animals
Ruminant production is at a low efficiency in
most countries with tremendous scope to
improve
The supply of supplements needed to use the
biomass will arise from by-products of the feed
and fuel industries
Ruminants are multi-purpose for power,food
products
The price of steak from grain fed ruminants
must be measured in terms of oil costs
involved in growing the feed, managing and
marketing the meat
I kg of beef requires approximately
5.7 litres of oil. Or to produce this
little beauty at 600kg live weight
1075 litres of oil
National Geographic June 2004
Oil Utilization Per Capita in Developed and
Developing Countries
[China/Indonesia/Africa/South America]
Oil user[Tonnes/capita]
3.5
3+
3
2.25-3
1.5-2.5
2.5
0.75-1.55
2
1.5
0-.75
1
0.5
0
USA
Canada
Aust/Europe
Russia
Developing
World
Half the world’s children are living
in poverty and the situation will
worsen with the end of cheap oil
35 countries faced food emergencies in 2004 caused by
drought or conflict or both
The worst effected were in Africa [Eritrea, Burundi, Congo,
Ethiopia, Mozambique, Zambia] and Haiti and North Korea
End of cheap oil will ensure that this worsens
as costs of food production and competition for
crops or land for food, feed and feedstock intensifies
reducing world cereal grain stocks
Millions of the World’s Children are
Undernourished
221
9 28
39
53
204
142
156
Developed
LatinAmerica/Caribbean
China
Developing
SubSaharan Africa
India
Near East/N Africa
Asia/Pacific
Permaculture and clean energy
Composting for fertilizer
Worm farm
Mandela urban garden
Wind farm
Crops, trees, shrubs
Feed
Irrigation
Pond
Livestock
Family
Excreta
Biogas
Manure
Effluent
The ecological farm
Biodigestor
The future resides in capturing solar
energy and harnessing it to fuel our needs
for energy
Solar energy trapped on 1% of the world’s surface is enough
Hydrogen economy—A false
economy
To replace UK’s oil burning vehicles
with greener hydrogen powered cars
would require erection of 100,000 wind
turbines or 100 new nuclear power
stations
Source; A an J Oswald, Warrick University www.iom3.org/materialsworld
The Sea Current Option




A huge source of renewable and sustainable energy
is in the kinetic energy of sea currents.
There are a number of propeller systems,
oscillating vane and aerofoil systems
These solutions are trying to adapt wind
technology directly to a dense slow moving
fluid.
Deflecting Vane Technology is by far the most
efficient. It increases energy density upstream
from the turbine by a factor of 3
[email protected]
Utilisation of Silicon as an intermediary
between renewable energy and
hydrogen
Transportation
and storage
+water or alklali
+air
Reactive
Silicon Powder
Hydrogen
+sand
Silicon nitride
+water
Ammonia+ sand
Silicon oxide
or sand
Energy source
for the reaction
Hydrogen
Electrolysis
Of water
Hydrogen
Electricity
Energy
Wind Solar
Wave
Thermal
gradients
Biomass etc
Renewable energy is used to generate electricity to electrolyse water
and hydrogen is produced. Silicon from sand is generated using the hydrogen as an
energy source. Silicon is safely transported and hydrogen or ammonia is generated
by reaction with air . Efficiency 66%
The way ahead is to buy time by
reducing world consumption of fuel.



40
100
50
30
20
10
0
Production of oil [Million
barrels/day]
50
0
250
200
70
60
50
150
40
100
30
20
50
0
10
0
Production of oil [Million
barrels/day]

150
60
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
20
21
20
31
20
41

80
70
200
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
20
21
20
31
20
41

250
The discovery of oil [Giga
barrels/year]

Massive education effort
Allow world prices to rise modestly
Develop sustainable farming systems
maximising the use of microbes and
recycling of nutrients
Take a cut in standard of living
 More fuel efficiency less
cars/capita-more public transport
Massively invest in alternative,
renewable energy resources now
Reduce flagrant use of oil resources
 Sir Richard Branson, Greg Norman
John Travolta
More amicable approach to resource
sharing and detente [terrorism?]
Rationalise world trade-de-emphasise
globilisation
The discovery of oil [Giga
barrels/year]

Depletion Protocol Campbell- 2005
Lisbon

Cut oil imports to match world
Depletion Rate.
 World price would moderate
allowing poor countries to buy minimal needs
 avoiding profiteering by oil companies & M.East


Force consumers to face reality
Experience from Kyoto Protocol-- not a
chance [my thoughts]
The father of the peak oil movement,
the American geologist M. King Hubbert,
said that an economic model based on
infinite growth but fueled by finite natural
resources is doomed.
Ironically, there’s also a saying from
oil-rich Saudi Arabia that goes:
"My father rode a camel. I drive a car.
My son flies a jet airplane. His son will
ride a camel."
Planning for the transition is much more
important then debating whether it will
start in 2005 or 2025
•
•
•
•
UNE’s Opportunities –
Leadership in Resource economics/management
Biotechnology- Agriculture and food production
Sustainable permaculture [integrated farming
systems]
Renewable energy [biomass, solar (Hydro,wind,
sea)]
The World Needs To Rapidly Develop
New Energy Sources
Thank you for your attention and good luck to the young
The End
We believe oil markets may have entered
the early stages of what we have referred
to as a 'super spike' period ...Resilient
demand has caused us to revise up our
super-spike range to $50-$105 per
bbl up from $50-$80 per bbl previously.
Goldman-Sachs Global Investment Research 2005
The combination of the news that there's no
new Saudi Light coming on stream for the next
seven years plus the 27% projected decline
from existing fields means Hubbert's Peak has
arrived in Saudi Arabia.
Bank of Montreal 2005
A March 2005 report for the U.S. Department of Energy
entitled “The Mitigation of the Peaking of World Oil
Production” stated:
“Without timely mitigation, world supply/demand balance
will be achieved through massive demand destruction
(shortages), accompanied by huge oil price increases,
both of which would create a long period of significant
economic hardship worldwide.
“Waiting until world conventional oil production
peaks before initiating crash program mitigation leaves
the world with a significant liquid fuel deficit for two
decades or longer.”
World nuclear power
The first nuclear power stations began operating
in 1950
 31 countries have 440 commercial nuclear
power stations producing 364,000MWeof total
capacity
 56 countries operate 284 research reactors
 220 reactors power ships and submarines
 50 new reactors are in construction or are
planned
including
in China
Source
WMC and Nuclear
Energy20
Agency
R Gottliebsen Australian 29-30 Jan 2005

Nuclear power the bridging fuel?
As the price of oil sky rockets governments
abandon their nuclear –free resolutions
World Uranium Resources
Utbekistan
3%
Nambia
4%
Russia
2%
Rest of World
11%
WMC Australia
35%
South Africa
6%
Rest Australia
10%
Canada
14%
Kazakhstan
15%
Source WMC and Nuclear Energy Agency R Gottliebsen Australian 29-30 Jan 2005
World Energy Generation By Fuel
Other
1%
Hydro
19%
Nuclear
16%
Oil
10%
Coal
39%
Gas
15%
Source WMC and Nuclear Energy Agency R Gottliebsen Australian 29-30 Jan 2005
Australia is in a particularly dire situation considering the
the alarming decline in Australia's self-sufficiency in crude oil,
which forecasters say means we will have to import most of our
crude oil and petroleum products from overseas by 2008.
Which corresponds with ASPO's predicted global peak.
Three key facts are of overriding
importance to world events today.1
FACT ONE - Crude oil prices have
doubled since 2001, but oil companies have
increased their budgets for exploring new oil
fields by only a small fraction. Likewise, U.S.
refineries are working close to capacity, yet
no new refinery has been constructed since
1976. And oil tankers are fully booked, but
outdated ships are being decommissioned
faster than new ones are being built.
http://www.ems.org/rls/2004/01/28/oil_supply_short.html
Source M C Ruppert[2005] www.fromthewilderness.com.
Three key facts are of overriding
importance to world events today.
2
FACT 2.The rate of major new oil field discoveries has
Fallen dramatically in recent years. [Global discovery
peaked in the 1960s. Per capita energy production peaked
in 1979. -Ed] There were 13 discoveries of over 500 million
barrels in 2000, six in 2001 and just two in 2002, according
to the industry analysts IHS Energy. For 2003, not a single
new discovery over 500 million barrels has been reported.
Murray Duffin, Energy Pulse, November 17, 2004
Source M C Ruppert[2004] www.fromthewilderness.com.
Three key facts are of overriding
importance to world events today.3
FACT 3. For China and India to reach just one-quarter
of the level of US oil consumption, world output would
have to rise by 44 percent. To get to half the US level,
world production would need to nearly double. That's
impossible. The world's oil reserves are finite. And the
view is spreading that global oil output will soon peak.
-- The Christian Science Monitor, January 20,
Source M C Ruppert www.fromthewilderness.com.
Hydrogen is seen as the next fuel
for mobile vehicles but there are no
free gifts 1

Life expectancy of a very
expensive fuel cell engine is only
200 hours. Commercial hydrogen
is produced from natural gas
which is also in decline [Ruppert
2004]
Hydrogen is seen as the next fuel
for mobile vehicles but there are no
free gifts 2

Oil would be needed in every phase of our conversion to hydrogen
powered locomotion or any other form of alternative fuel engine for
that matter] to

Mine melt and transport the ore

Transport the metals to the factories and the goods to market

To provide the electricity to manage the construction side[ for
example every tyre “contains’ approx 25 litres of oil]

To make the paint plastics and solvents needed
Hydrogen is seen as the next fuel
for mobile vehicles but there are no
free gifts 3

Oil would be needed in every phase of our conversion to hydrogen
powered locomotion or any other form of alternative fuel engine for
that matter] to


Transport the workers too and from the factories and at times to
construct the factories themselves and provide residences for
the workers where new installations are required
Since these developments may only be feasible with cheap
labour in developing countries there would be massive
infrastructure costs e.g. roads, ports, sea going ships etc
In 1970s in the USA a 5% imbalance
between supply and demand created
a shortfall in petrol
At that time high price was less of a worry
than availability
Such a small % difference was enough to
adversely effect the economy ,flow of
goods and mobility of people
The 1973 Arab oil embargo created a massive
price rise and economic dislocation world wide.
Explosion of oil price ushered in a decade of
STAGFLATION in which inflation soared and
economies stagnated.
Result was double-digit
unemployment,
inflation
bank interest rates
Strategic significance of America’s oil shale resources
US Department of Energy [Johnson,
Crawford and Bunger 2004]
2004
If Peak Oil occurs suddenly the US will likely
experience all the negative effects seen in the 1970s
The comfortable supply situation of the past decade
gives an impression that the favourable trends can
continue indefinitely. The danger is that we are
lulled into a false sense of security
Strategic significance of America’s oil shale resources
US Department of Energy [Johnson, Crawford and Bunger 2004]
The top five decliners in 2003
Country
Production
[Mb/day]
Peak Year
Decline
[%]
USA
7.5
1985
-1.4
Norway
3.3
2001
-2.1
Venezuela
2.9
1998
-7.8
UK
2.2
1999
-8.9
Indonesia
1.2
1991
-8.5
About to go into decline
(Increasing Type 3 losses)

Denmark producing 0.4mn b/d goes in 2005
Malaysia producing 0.9mn b/d goes in 2005
China producing 3.4mn b/d goes in 2005/06
Mexico producing 3.8mn b/d goes in 2005/06
Brunei producing 0.2mn b/d goes in 2006/07
India producing 0.8mn b/d goes in 2006/07

Collectively 9.5mn b/d or 12.3% of production





Distribution of proved natural gas reserves
at end of 2003
Source: BP Statistical Review of World Energy 2004
OIL RESERVES ISSUE
Distribution of proved oil reserves 2003
Source: BP Statistical Review of World Energy 2004
U.S. TRANSPORTATION FLEETS
Fleet
Size
Median
Lifetime
(Years)
Cost to Replace
Half the Fleet
(2003 $)
Automobiles
130 million
17
$1.3 trillion
Light Trucks,
SUVs,etc.
80 million
16
$1 trillion
Heavy Trucks,
Buses, etc.
7 million
28
$1.5 trillion
8,500
22
$.25 trillion
Aircraft
SAIC / MISI
Europe and Australia
by night – same scale, same brightness
How about the real world?
The Crude Oil case:
• Limited amount of resource
• Global Exploitation
• No suitable replacement
Regional cases, e.g US-48
may not be relevant
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
Australia
“A wide brown land”
“The Tyranny of Distance”
Annual rainfall
mm
3200
1600
Perth to Sydney 3300 km
800
400
Big
Mostly arid
Mostly low fertility soils
20 M people
Already exceeding sustainable population
Remoteness classification
Major cities
Inner regional
Outer regional
Remote
Very remote
Outer
regional
Very remote
Remote
3 separate countries
Remote Regional Urban
3%
31%
66%
Inner
regional
Major cities
The More Rural The Population The
Lower The Energy Requirements
Country
US
Energy
Use [1012
kcal]
18400
Per Capita
%
Use[ 106 population
kcal]
in Agric.
77
2.6
Brazil
600
4
37
India
900
1
62
Kenya
12
0.6
75
The fossil fuel used in producing a
hectare of corn [approx 7200kg/ha]
180
160
140
120
Litres per ha 100
80
of corn
60
40
20
0
Petrol
Diesel
LPG
Volume used /Ha of corn
Patzec 2004
Methane
Total
Future world fuel availability



Oil extraction from wells will be physically unable to
meet global demand (the evidence is from the oil
industry itself).
Alternative energy sources e.g. nuclear and natural gas
will fall far short of compensating for expected shortages
of oil. There is simply not enough time to convert over to
them.
Massive disruptions to transportation and the economy
are expected commencing from about 2005-2010
onward as the global decline of petroleum begins.
Simmonds 2004
In Developed Countries, e.g. The US,
Oil Is Used Largely As A
Transportation Fuel
Sector
Millions Barrels Oil
Consumed Daily
Transportation
11.7
Industrial Feedstock
4.6
Residential and
Commercial Use
1.1
Electric Utilities
0.3
TOTAL
17.7
World Cereal Stocks [Estimated
total carryover of cereals]
700
600
500
Millions of 400
tonnes 300
200
100
0
'98
FAO Rome
'99
'00
'01
'02
'03
'04
"The Australian government released
2004 figures indicating that the countries
remaining commercial reserves of crude
and condensate total 1.491 billion bbl,
less than half of its previous estimate.
The government reported gas reserves of
29,000 bcf, one-third of its previous
estimate." Fleay B [2004]
http://stcwa.org.au/journa/150105/110612461517030.htm
l
The end of Australian oil maybe closer than
we thought-and exporting Australian gas to
buy overseas oil could well turn out to be
an even shorter term strategy then expected
CSIRO Sustainability News Letter 49 2005
A Planet and Its Inhabitants Under
Stress 1



Pollution and climate change with potential
abrupt environmental warming
Oil Production could peak [has peaked] and
world supplies will start to decline with massive
effects on human activity
Water –by 2025, 60% of the world’s people are
likely to be living with insufficient water
A Planet and Its Inhabitants Under
Stress 2

Food production is likely to be constrained by
lowered oil and water availability[ about 1 billion
people are presently malnourished]

Loss of biodiversity with extinction of large
numbers of organisms

Continuing population increase mainly in the
resource poor countries