Transcript Slide 1

Peak Oil
A crucial driver for biofuels
Bruce Robinson
Convenor, ASPO-Australia
9th May 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 ?
but
when?
30
the time when global oil production
stops rising and starts its final decline
20
10
We will never "run out of oil"
0
1930
1
When is the most probable forecast date ?
What might it mean for Biofuels
21
1970
41
61
2010
81
101
2050
121
perhaps 2010-2015
Lots!
Should Governments and investors be considering
Petrol Droughts and Peak Oil Yes!
Will Biofuels solve our Peak Oil problems No, sorry!
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
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
5
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
6
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
2007
1970
2010
2050
Chris Skrebowski
UK
Prof. Aleklett, ASPO
Sweden
7
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
"40 years reserves left at current production rates"
....This is a very misleading statement
8
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
9
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
10
Ghawar is Saudi Arabia's and the world's biggest oilfield
If it is at peak, then global peak is probably very close
Blue is water, green is water and oil mixed
and red/purple is “dry” oil with little water in it
11
The real oil discovery trend
Longwell, 2002
12
The real oil discovery trend
Longwell, 2002
1995-2025
Discovery
Forecast
USGS
13
How old are the fields?
• Of the 18 largest fields, 12 are in decline, 5 have
some potential and 1 is undeveloped
• 70% of production from fields 30+ years old
• Few large recent discoveries
• Relying more and more on ageing fields and new
small discoveries
14
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%
15
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
16
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
17
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
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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 will be a net importer by 2007
-4000
Quelle: BP Analyse: LBST, ß
19
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
20
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
21
Oil available for export
22
WTI price, US$/bbl
70
60
ABARE forecasts
50
40
30
20
10
"Forecasters' Droop" ??
0
Dec-00 Apr-02 Aug-03 Jan-05 May-06
Date
actual price
March 2006
prediction
March 2005
prediction
March 2004
prediction
March 2003
prediction
"If the price of eggs is high
enough, even the roosters will
start to lay."
ABARE to Senate inquiry into Australia's
future oil supplies
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New York Metals Exchange (NYMEX) Oil Futures Prices
NYMEX
NYMEX Futures WTI 10th April 2006
US$/bbl
70
ABARE
2005
US$67
in 2011
now US$67.44
(8th May 2007)
60
ABARE
50
US$39
US$35 in 2006
in 2011
40
30
20
10
1 5
May-06
Dec69 Dec
9 13 17 21 25 29 33 37 41 45 49 53 57 61 65
73 77
2012
2011
ABARE oil price forecasts
US$/bbl
2002 for 2004 $26
2004 for 2005 $32
2004 for 2005 $37.95 – 4.8%
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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
61
Geoscience Australia, APPEA, ABARE
25
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
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
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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.
As peaking is approached, liquid fuel prices and price volatility will increase
dramatically, and, 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.
Without massive mitigation more than a decade before the fact, the problem
will be pervasive and will not be temporary.
Previous energy transitions (wood to coal and coal to oil) were gradual and
evolutionary; 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
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.
30
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
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www.ASPO-Australia.org.au
Priorities
First:
Community awareness
and engagement
2:
Frugality
3:
Efficiency
Last:
Alternative fuels
“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
Failure to act now will prove incredibly costly
Oil vulnerability assessment and risk 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.
[email protected]
08-9384-7409
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Bicycles are powered
by biofuel,
renewable energy,
either Weetbix or
abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
33
a few more slides follow,
in case they are needed for questions
34
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.
35
Petrol taxes OECD
Au$
cents/litre
UK
Portugal
€
0.80
0.60
Australia
0.40
0.20
US
0.00
IEA Dec 2003
36
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
37
M bbl/d
Oil Consumption
million barrels/day
石油消費 （単位100万バレル／日）
6
Japan
日本
5
Japan
4
Australia
(x 5)
Australia
(x 5)
オーストラリア
（5倍に誇張）
3
2
UK
英国
UK
1
UK Fuel Tax Escalator
started
-0
1965
1975
1985
1995
2005
英国でのガソリン税課税強化開始
BP Statistical Review of World Energy, 2006
38
Sydney
Perth
39
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
40
41
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 SURVEYS - 1976 to 2003 (Prepared by Robin White 15 March 2007)
1976
PRTS
(weekdays,
school days?,
5yo+)
(see note 1)
1986 PTS
(See note 9)
(weekdays,
school days,
9yo+)
(see note 2)
2003
PARTS
(weekdays,
school days,
9yo+)
(see note 3)
(all days,
all ages)
(see note 3)
15.7%
3.0%
8.0%
11.6%
5.3%
7.4%
14.8%
59.1%
1.8%
100.0%
10.8%
1.6%
5.5%
18.0%
62.5%
1.6%
100.0%
10.6%
1.6%
3.9%
29.1%
53.2%
1.5%
100.0%
Mode Shares
Walk only
Cycle
Public transport
Car passenger (see note 4)
Car driver (see note 4)
Other (taxi, motorbike, etc.)
Total
69.8%
3.5%
100.0%
2003
PARTS
100%
We need both petrol rationing plans
and public transport rationing plans in
place in case of fuel emergencies.
Bicycle transport is one substantial
opportunity for public transport loadshedding in the event of a liquid fuel
emergency.
PTA must have more input into Liquid
Fuel Shortage planning
Perth Mode Share (2003)
80%
60%
If 25% of car users
change to public transport
{
40%
20%
0%
Walk
Bicycle
Transit
Car
43
Peak Oil
An urgent challenge
for sustainability
Bruce Robinson
Australian Association for the Study of Peak Oil & Gas
www.ASPO-Australia.org.au
6th February 2006
Look Out !!
Something serious
is looming on the radar
???
??
44
Hurricane Katrina New Orleans
Should we reduce fuel taxes? or strengthen the levees?
Govts warn of general hurricane risks,
forecast, and track individual hurricanes
Govts help: longterm; planning, standards,
short-term; preparations & consequences
They do not attempt to prevent hurricanes
Peak Oil is a natural phenomenon too.
45
Crude oil: Saudi versus Russia
12,000
10,000
8,000
6,000
4,000
2,000
0
1
1
2
5
5
6
2 03
3 04
6
0
0
0
0
0
0
0
0
0
20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20
/
1
8
3
5
7
2
9
4
10
12
11
Saudi Arabia
Russia
46
47
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.
48
Gboe/pa
World
All Oil
50
NGLs
40
Polar Oil
Deep Water
30
Heavy
Regular Oil
20
10
2007
0
1930
}
Oil
1950
1970
1990
2010
2030
2050
www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004 49
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
2007
0
1930
1950
1970
1990
www.PeakOil.net ASPO 2004
2010
2030
2050
50
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
51
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
2007
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
52
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
2007
1970
2010
2050
53
Australia
US
China
54