Transcript Slide 1

Peak Oil
What is it? When?
And what might it mean for Public Transport?
Bruce Robinson
Convenor, ASPO-Australia
30th October 2007
Bus Industry Confederation
National Conference 2007
1
Outline
Peak Oil
40
What is Peak Oil ?
30
the time when global oil production
stops rising and starts its final decline
20
but
when?
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 (or earlier)
● Why isn’t there any sign of Peak Oil being taken seriously? I don't know
● What might it mean for public transport? LOTS, opportunities and risks
● Should Governments and especially public transport authorities
be preparing for Petrol Droughts and Peak Oil ?
YES, indeed !
● We should have plans for petrol rationing AND for public transport rationing
ready, in case they are needed soon.
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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
3
Rolf Willkrans
Director
Environmental
Affairs
ASPO
Lisbon
2005
www.PeakOil.net
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Unexpected transport pattern changes,
infrastructure & planning decisions
Fremantle Passenger Terminal
completed 1962
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Unexpected transport pattern changes, and infrastructure
Passengers p.a.
Fremantle Port 1961-2001
250,000
Fremantle Passenger Terminal
opened
200,000
150,000
100,000
50,000
01-02
99-00
97-98
95-96
93-94
91-92
89-90
87-88
85-86
83-84
81-82
79-80
77-78
75-76
73-74
71-72
69-70
67-68
65-66
63-64
61-62
-
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Unexpected transport pattern changes, and infrastructure
Passengers p.a.
Fremantle Port 1961-2001
250,000
Fremantle Passenger Terminal
opened
World Air travel 1950-2001
200,000
150,000
100,000
50,000
01-02
99-00
97-98
95-96
93-94
91-92
89-90
87-88
85-86
83-84
81-82
79-80
77-78
75-76
73-74
71-72
69-70
67-68
65-66
63-64
61-62
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Fremantle Passenger Terminal
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Many books about
Peak Oil
Brian Fleay
Perth
1995
2005
Campbell &
Laherrère March 1998
Deffeyes
2001
2006
Campbell 2003 Heinberg 2003
Roberts 2004
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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
•1/3rd
•and hands up those who
Eric Streitberg
Executive Director
don’t?
ARC Energy Limited
•1/3rd
•Undecided
•1/3rd
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US oil production: Peak in 1970
10
Mb/d
2007
Deep Water
Alaska
US-48
5
0
1930
1970
2010
2050
Jeremy Gilbert, ex BP www.PeakOil.net
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Monday October 22 2007
Fig. 7 Oil production world summary
Steep decline in oil production
brings risk of war and unrest,
says new study
Output peaked in 2006
and will fall 7% a year
Ashley Seager
The Guardian
World oil production has already peaked and will
fall by half as soon as 2030.
The German-based Energy Watch Group will
release its study in London today saying that
global oil production peaked in 2006 - much
earlier than most experts had expected.
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Past World Oil Production
and Forecasts
440
0
330
Gb pa 0
220
0
110
0
000
1930
Dr Ali Samsam Bakhtiari
Iran
Schindler & Zittel, Oct 2007
Germany
Deffeyes
IEA 2002
Shell
Prof. Bauquis
France
Bauquis, Total
ASPO & Skrebowski
2007
1970
2010
2050
Chris Skrebowski
UK
Prof. Aleklett, ASPO
Sweden
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14
Chris Skrebowski
Editor, Petroleum Review, London
The practical realities
• The world needs oil production flows
• Reserves are only useful as flows
• Worry about flows not reserves
• "Deliverability"
"40 years reserves left at current production rates"
....This is a very misleading statement
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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
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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
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The real oil discovery trend
Longwell, 2002
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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 already a net importer
-4000
Quelle: BP Analyse: LBST, ß
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1000 Barrel/day
6000
Indonesia
3500
Consumption
1000
1965
1970
1975
1980
1985
1990
1995
2000
2005
Export
-1500
-4000
Quelle: BP; Analyse: LBST, ß
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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
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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
• Collectively we are still
in denial
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Cork, Ireland
17-18th September 2007
Jeff Rubin Canadian Imperial Banking Corporation
Chief Economist and Chief Strategist, Managing Director, CIBC World
Markets
Jeffrey Rubin has been the top-ranked economist in Canadian financial
markets over the last decade. Prior to joining CIBC World Markets in 1988,
he was a Senior Policy Advisor at the Ontario Ministry of Finance
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Lord Ron Oxburgh
Former Chairman, Shell UK
Chairman, House of Lords Select Committee
on Science and Technology
Honorary Professor, Cambridge University
Fellow of the Royal Society
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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
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Geoscience Australia, APPEA, ABARE
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Australia uses 45,000,000,000 litres of oil each year
a cube of about 360 metres size
80% of Australia’s oil usage is in transport
If Australia’s 20 M tpa wheat crop → ethanol = 9%
=1.3
EfT3
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
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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
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"Federal agency efforts that could reduce uncertainty about the timing of
peak oil production or mitigate its consequences are spread across
multiple agencies and are generally not focused explicitly on peak oil.
....there is no coordinated federal strategy for reducing uncertainty about
the peak’s timing or mitigating its consequences".
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PEAKING OF WORLD OIL PRODUCTION:
IMPACTS, MITIGATION, & RISK MANAGEMENT
Robert L. Hirsch, Roger Bezdek & Robert Wendling
February 2005
for US Dept of Energy
"The peaking of world oil production presents the U.S. and the
world with an unprecedented risk management problem.
without timely mitigation, the economic, social, and political costs
will be unprecedented.
Viable mitigation options exist on both the supply and demand
sides, but to have substantial impact, they must be initiated more
than a decade in advance of peaking."
"The world has never faced a problem like this.
.. oil peaking will be abrupt and revolutionary".
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Worldwide Crash Program Mitigation of
Conventional Oil Production Peaking
A Study for US DOE NETL
Hirsch, Bezdek and Wendling, 2005
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EOR
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Coal
Liquids
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Heavy Oil
5
GTL
Impact
(MM bpd)
Efficient
Vehicles
0
0
5
10
15
Years After Crash Program Initiation
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Delay / Rapid growth.
Roughly 35 MM bpd at year 20.
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Dr Roger Bezdek is a senior energy economist in
Washington
On his June 2007 Australian tour for ASPO he briefed ministers
for Transport and ministers for Energy in Victoria and
Queensland, prominent multinational firms, nationwide TV, the
Defence Department, the Federal Shadow Minister for Resources
and Energy and had a number of meetings at Queensland
Transport
3. HIGHER PRICES WILL CREATE MORE OIL?
Not true
“Economists are better at finding oil on paper than geologists are at
finding it in the ground”
7. GOVERNMENT INTERVENTION NOT REQUIRED?
Wrong: Intervention by governments will be required
Economic and social implications of oil peaking would otherwise be
chaotic
Full presentation slides and video at
www.ASPO-Australia.org.au
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COST AS A FUNCTION OF START TIME
(Notional)
Cost of
Error
Premature
Start
“It is also certain that the cost of
preparing too early is nowhere near the
cost of not being ready on time.”
Alannah MacTiernan, 2004
Time
- 20 Years
Scenario III
- 10 Years
Scenario II
Peaking
Scenario I
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Les Magoon,
USGS 2001
Is there a possible transition to another fuel for most cars?.
Probably not
Can we swap to public transport for most trips?
No
Will an urgent change now in transport planning practices
help us?
Yes, dramatically in the long term
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Mortgage and Oil Vulnerability
in Perth
at www.aspo-australia.org.au/content/view/120/55/
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$10 PER LITRE PETROL: A SCENARIO
David Rice, Senior WA Transport Planner
But why $10/l?
Simple
memorable
an illustration of ‘expensive’
see www.aspo-australia.org.au
in "bibliography"
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Analogy:
The Canberra firestorms of January 2003
destroyed over 400
houses; on the outer
edge of the outer
suburbs
Reliable predictions
had been ignored by
the authorities,
and there was no
effective action to
minimise the risks
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Landsat image of
Canberra region
showing firedamage from the
west. January
2003.
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Perth
Oil shocks, like the
$10/litre scenario,
may well wipe out the
entire outer rows of
suburbs from Perth,
with the same results
of destroyed homes,
broken dreams and
broken marriages.
30 km
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Perth
Oil shocks, like the
$10/litre scenario,
may well wipe out the
entire outer rows of
suburbs from Perth,
with the same results
of destroyed homes,
broken dreams and
broken marriages.
30 km
40
Perth
Oil shocks, like the
$10/litre scenario,
may well wipe out the
entire outer rows of
suburbs from Perth,
with the same results
of destroyed homes,
broken dreams and
broken marriages.
30 km
41
Perth
Oil shocks, like the
$10/litre scenario,
may well wipe out the
entire outer rows of
suburbs from Perth,
with the same results
of destroyed homes,
broken dreams and
broken marriages.
30 km
42
The outskirts of all Australian
cities will be hard hit by oil
depletion, as public transport
infrastructure is very poor
Perth
30 km
People who have borrowed
heavily to buy a house in a
distant suburb and a 4WD may
be left with a lot of negative
equity and have to walk away
from their homes.
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Gboe
Gboe/pa
World All Oil
60
50
40
NGL
Polar
Deepwater
Heavy etc
Regular Oil
30
20
}
10
2007
0
1930
Oil
1950
1970
www.PeakOil.net ASPO 2006
1990
2010
2030
2050
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Sydney
Perth
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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
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PERTH TRAVEL SURVEY - 2003
100%
Mode Shares
Walk only
10.6%
Cycle
1.6%
Public transport
3.9%
Car passenger
29.1%
Car driver
53.2%
Other (taxi, motorbike,
etc.)
1.5%
Total
100.0%
Perth Mode Share (2003)
80%
60%
If 25% of car users
change to public transport
{
40%
20%
0%
Walk
Bicycle
Transit
Car
We need both petrol rationing plans and
public transport rationing plans in place in
case of fuel emergencies.
There must be public transport input into
State and Federal fuel emergency planning.
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www.ASPO-Australia.org.au
Priorities
First:
Awareness and engagement
(including within public transport planning)
2:
3:
Last:
Frugality
Efficiency
Alternative fuels
Failure to act now will prove incredibly
costly.
Why are we waiting?
ASPO-Australia is keen to help with Public Transport advocacy
Oil vulnerability assessment and risk management is an important
mechanism of minimising exposure and maximising opportunities.
It is a new and very promising field.
Hint: Check your superannuation is not being invested
into urban toll-roads, tunnels and airports.
[email protected]
08-9384-7409
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a few more slides follow,
in case they are needed for questions
49
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 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.
50