Transcript Slide 1

Peak Oil
What are the probabilities that the rate of global oil
production will start its final decline soon?
Bruce Robinson
Convenor, ASPO-Australia
10th August 2007
Curtin Corner
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
21
1970
41
61
2010
81
101
2050
121
Is "Peak Oil" a fallacy, a theory, a probability, or an inevitability? inevitable
When is the most probable forecast date ?
perhaps 2010-2015
Will market forces solve our Peak Oil problems ? no, sorry!
Should Governments, universities, businesses and communities
be preparing for Petrol Droughts and Peak Oil ? yes!
3
Unexpected transport pattern changes
and infrastructure provision decisions
Fremantle Passenger Terminal
completed 1962
4
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
-
5
6
Many books about
Peak Oil
Brian Fleay
Perth
1995
2005
Campbell &
Laherrère March 1998
Deffeyes
2001
2006
Campbell 2003 Heinberg 2003
Roberts 2004
7
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
8
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
9
Past World Oil Production
and Forecasts
440
0
330
Gb pa 0
220
0
110
0
000
1930
Dr Ali Samsam Bakhtiari
Iran
Deffeyes
IEA 2002
Shell
Prof. Bauquis
France
Bauquis, Total
ASPO & Skrebowski
2007
1970
2010
2050
Chris Skrebowski
UK
Prof. Aleklett, ASPO
Sweden
10
11
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" (Les Magoon, USGS)
"40 years reserves left at current production rates"
....This is a very misleading statement
12
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
13
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
14
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
15
The real oil discovery trend
Longwell, 2002
16
The real oil discovery trend
Longwell, 2002
1995-2025
Discovery
Forecast
USGS
17
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
18
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%
19
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
20
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
21
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
22
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
24
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
25
Oil available for export
26
WTI price, US$/bbl
70
60
ABARE forecasts
50
40
30
20
10
"Forecasters' Droop" ??
0
Dec-00 Apr-02 Aug-03 Jan-05 May-06
Date
actual price
March 2006
prediction
March 2005
prediction
March 2004
prediction
March 2003
prediction
"If the price of eggs is high
enough, even the roosters will
start to lay."
ABARE to Senate inquiry into Australia's
future oil supplies
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NYMEX
NYMEX Futures WTI 10th April 2006
US$/bbl
New York Metals Exchange
70
Oil Futures Prices
ABARE
2005
US$35
in 2006
60
NYMEX
US$67
50
40
in 2011
10th April 2006
now US$70
(10th August 2007)
30
ABARE
US$39
in 2011
20
10
1 5
May-06
Dec69 Dec
9 13 17 21 25 29 33 37 41 45 49 53 57 61 65
73 77
2012
2011
80
ABARE oil price forecasts
US$/bbl
2002 for 2004 $26
2004 for 2005 $32
2004 for 2005 $37.95 – 4.8%
ABARE: 25th June 2007
"In the second half of 2007,
oil prices are forecast
to average U$63 a barrel"
NYMEX WTI futures $US/bbl
60
40
10th August 2007
20
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
28
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
29
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
30
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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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%
32
33
"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".
34
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.
.. oil peaking will be abrupt and revolutionary".
35
Worldwide Crash Program Mitigation of
Conventional Oil Production Peaking
A Study for US 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.
36
Dr Roger Bezdek is a senior energy economist in
Washington
On his recent 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
37
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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SCENARIOS ANALYSIS CONCLUSIONS
Basis: Immediate crash program implementation
Scenario
Result
Wait for peaking
Oil shortages largest,
longest lasting
Start 10 years early
Delays peaking; still
shortages
Start 20 years early
Avoids the problem;
smooth transition
No quick fix!
39
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
40
Mortgage and Oil Vulnerability
in Perth
41
www.ASPO-Australia.org.au
Priorities
First:
Community awareness
and engagement
2:
Frugality
3:
Efficiency
Last:
Alternative fuels
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
42
a few more slides follow,
in case they are needed for questions
43
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.
44
Petrol taxes OECD
Au$
cents/litre
UK
Portugal
€
0.80
0.60
Australia
0.40
0.20
US
0.00
IEA Dec 2003
45
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
46
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
47
Gboe
Gboe/pa
World All Oil & Gas
(gas at 10,000 cft=1bbl)
60
50
40
30
Non-Con Gas
Gas
NGL
Polar
Deepwater
Heavy etc
Regular Oil
}
Gas
20
}
10
2007
0
1930
Oil
1950
1970
www.PeakOil.net ASPO 2006
1990
2010
2030
2050
48
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
49
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
50
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
51
Bicycles are powered
by biofuel,
renewable energy,
either Weetbix or
abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
52
Sydney
Perth
53
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
54
55
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
56
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
57
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
???
??
58
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.
59
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
60
61
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.
62
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
63
Australia
US
China
64