Transcript Peak Oil, an update and An Oil Vulnerability Assessment for the Albany region Bruce Robinson, Convenor 3rd November 2010 Look out !! Something serious is looming on.

Peak Oil, an update
and
An Oil Vulnerability Assessment for the Albany region
Bruce Robinson, Convenor
3rd November 2010
Look out !!
Something serious
is looming on the radar
???
?
1
www.ASPO-Australia.org.au
An Australia-wide network of professionals working to reduce oil vulnerability
Working groups
Urban and transport planning
Finance Sector
Health Sector
Social Services Sector
Regional and city an ASPO-Albany ?
Remote indigenous communities
Active transport (bicycle & walking)
Agriculture, Fisheries and Food
Biofuels
Oil & Gas industry
Construction Industry
Public transport sector
Defence and Security
Economics
Tourism
Children and Peak Oil
Young Professionals working group
The President of ASPO International, Prof
Kjell Aleklett, from Uppsala University is
coming to WA in mid-December
2
Outline
This is about Oil, not energy in general.
Transport Energy (largely)
Global oil supply, not about Climate Change
Peak Oil
40
but
when?
30
20
10
0
● What is Peak Oil ?
1930
1
21
1970
41
61
2010
81
101
2050
121
the time when global oil production stops rising and starts its final decline
We will never "run out of oil“
● Peak Oil will probably hit Albany much sooner and harder than climate change
● When is the most probable forecast date ? ? 2012 +/- 5 years
● “Peak Exports” will arrive sooner, as exporting countries use more of their
own oil internally, leaving less for export
● The Great Southern must consider Peak Oil risks urgently. Oil vulnerability
mitigation and adaptation strategies must be devised and implemented.
● An Oil Vulnerability Assessment is a good place to start.
3
"Anyone who believes exponential
growth can go on forever in a finite
world is either a madman or an
economist."
Metropolitan passenger travel Australia
BTRE
Car
Total Energy Usage
Australia, 2000
ABARE
Other
Gas
Kenneth E. Boulding,
economist
1910-1993
Oil
Coal
www.GrowthInTransition.eu
4
Two analogies for Peak Oil risks
1. Hurricane Katrina
(New Orleans, 2005)
2. Global Financial Crisis
(World, 2008-2010- ?)
Can we learn to prepare in advance
for probable events rather than
just hoping business will be as usual ?
KOSPI
5
Hurricane Katrina New Orleans
US Federal, State and local Governments were
shown to be shortsighted, ill-prepared, uncaring
and disorganised.
Most governments and communities are much
less prepared for Peak Oil
6
Tuesday 13 July 2010
www.chathamhouse.org.uk/publications/papers/view /-/id/891/
7
US military warns oil output
may dip causing massive
shortages by 2015
April 11th 2010
'Peak Oil' and the German
Government
Military Study Warns of a Potentially Drastic
Oil Crisis 1st September 2010
By 2012, surplus oil production capacity
could entirely disappear,
and as early as 2015, the shortfall in output
could reach nearly 10 MBD
February 2010
8
9
"A MIDDLE EAST VIEW OF THE GLOBAL OIL SITUATION"
A.M. Samsam Bakhtiari
National Iranian Oil Company
May 2002
Global oil crunch at the horizon --- most probably within the present decade.
"...It would take a number of miracles to thwart such a rational scenario..
A series of simultaneous miracles is not possible --for there are limits
even to God Almighty's mercifulness".
“Noah built his ark before it started raining”
It is very hard to build an ark under water !!!
We must start preparing for Peak Oil in advance
www.isv.uu.se/iwood2002
10
www.csiro.au/resources/FuelForThoughtReport.html
11
"The Big Oil Picture: We're not running out,
but that doesn't mean we'll have enough"
Macquarie
Financial Times
London
September 18, 2009
report September 16th 2009
Global oil production limits are in sight, demand should again
become constrained, oil sands et al. will be needed
M barrels/day
92
Macquarie Research September 2009
Base demand
90
88
Supply limit
86
84
82
2005
2009
2013
12
Oilfields and oil provinces "peak".
Oil Production UK, field by field
(EnergyWatch Group, 2007)
Their production rises, reaches a maximum and then declines
Mexico's Cantarell giant
(Simmons)
Alaska's giant Prudhoe Bay
(Simmons)
Oil production,OECD Europe
(EnergyWatch Group, 2007)
13
US oil peak 1970
10
mb/d
8
US Oil Production
1900-2006
(million barrels/day)
6
4
2
0
1900
1920
1940
1960
1980
2000
US economic and military power was built on its rising oil production,
What might happen down the decline side of the graph?? ( ? financial crisis ?)
14
Big fields are found first, and as they decline, they are replaced by smaller and smaller fields
soon the additional small fields can not match the decline of the large fields,
so the overall production begins its final decline
15
THE GROWING GAP
Regular Conventional Oil
Billion barrels of oil per year
Longwell, 2002
16
IEA November 2008
The world is heading for a catastrophic energy
crunch that could cripple a global economic
recovery because most of the major oil fields in the
world have passed their peak production, a leading
energy economist has warned. (IEA’s Fatih Birol)
The IEA estimates that the average production-weighted
observed decline rate worldwide is currently 6.7% pa for
fields that have passed their production peak”.
17
2008
Even if oil demand were to remain flat to 2030, 45 m barrels/day of gross capacity -roughly four times
the capacity of Saudi Arabia - would be needed just to offset the decline from existing fields
18
But….
Key oil figures were distorted by US pressure, says whistleblower
Exclusive: Watchdog's estimates of reserves inflated says top official
guardian.co.uk, Monday 9 November 2009
The world is much closer to running short of oil
than official estimates admit, according to a
whistleblower at the International Energy Agency
who claims it has been deliberately underplaying a
looming shortage for fear of triggering panic
buying.
19
Prof Kjell Aleklett
Global Energy Systems
Uppsala University, Sweden
The Peak of the Oil Age Analyzing the world oil production Reference Scenario in World Energy Outlook 2008
Published in
Energy Policy,
November 2009
20
International Energy Agency
(OECD)
IEA world oil forecast
World Energy Outlook 2008
110
80
60
100
Different World oil production forecasts (million barrels/day)
using the same reserve data
90
100
80
IEA 106 Mb/day
2008
2008
70
Production [Mb/d]
Production [Mb/d]
100
Uppsala University
Global Energy Systems group
2009
60
50
40
40 30
20
20 10
80
Uppsala 75 Mb/day
60
40
20
IEA
}
41%
Uppsala
0
0
2006
2008
2010
2012
2014
2016
2018 0 2020
2022
2024
2026
2028
2030
2030
2008
2020
2008 2011
2020
2030
2006
2016
2021
2026
2006
2011
2016
2021
2026
Currently producing
fields
Fields yet to be developed
Fields yet to be found
Currently producing fields
Fields yet to be developed
Currently producing
fieldsgas liquids
Fields yet to be developed
Additional EOR Additional EORNon-conventional
Natural
Fields yet to be found
Fields
yet
to
be
found
Additional EOR
Non-conventional
Natural gas liquids
Non-conventional
Natural gas liquids
Using the same IEA reserve data
Different conclusions.
IEA production forecasts are "outside reality", not possible.
(because IEA have assumed impossible production rates from the reserves)
21
Dr. Sadad I. Al Husseini, ex Saudi Aramco
Oil and Money Conference, London, October 30, 2007
...predicts a 10 year plateau
a structural ceiling determined by geology
Price
$/barrel
Production
M b/day
100
90
80
70
The economic mantra is that as prices rise, production will increase.
Clearly not true from these data.
22
World Oil Production Forecast
Billion
barrels/ year
ASPO-2010 base case (Dr Colin Campbell)
30
NGL natural gas liquids
Polar
Deepwater
20
Heavy oil etc
Regular oil
10
2010
0
1930
1950
1970
1990
2010
2030
23
World Oil Production
2012 +/- 5 years ?
and Forecasts
440
0
330
Gb pa 0
220
0
110
0
000
1930
Zittel & Schindler
Germany
Dr Ali Samsam Bakhtiari
Iran
IEA 2002
2006
2008
Deffeyes
Shell
Prof. Bauquis
France
Bauquis, Total
ASPO & Skrebowski
2009
1970
2010
2050
Chris Skrebowski
UK
Prof. Aleklett, ASPO
Sweden
24
A simple observation -- or why peak will be earlier
than most people expect
Chris Skrebowski
Petroleum Review
London
‘Global production falls when loss of output from countries in
decline exceeds gains in output from those that are expanding.’
Expansion
Decline
25
Australia uses 51,000,000,000 litres of oil each year
a cube of about 370 metres size
70% of Australia’s oil usage is in transport
If Australia’s 20 M tpa wheat crop → ethanol = ~10%
Perth’s Central Park
building is 249 m high,
to top of tower
26
How much energy is bound
in oil?
100 ml of oil contains 1 kWh
What can you do with 1
kWh?
You can move a small car to
the top of the Eiffel Tower!
Filling your car with 50 litres
is equal to the energy you
need to move 500 cars to the
top of the Tower.
27
50 litres of gasoline is equal to
the work of 1000 persons
during one day
A day’s work for a man is 0.5 kWh
= 50 ml of petrol
28
Million barrels/ day 2009
BP Statistical Review, 2010
Australia uses
0.94
China
8.6
US
18.7
World
84.1
US 1 cubic km oil / year
Australia
l
China
1 km
l
United States
29
ABARE Australian Commodities
March 2009
22 million in 2006
30
Consumption
1000 Barrel/day
7000
China
4000
250
Production estimates from
Chinese scholars (Pang, 2005)
200
150
100
1000
50
Production
0
1 3
1965 1970 1975 1980 1985 1990 1995 2000 2005
5
7
9
11
13
152020
17
-2000
-5000
Imports
Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi
31
1000 Barrel/day
6000
4000
UK
2000
Consumption
0
1965 1970 1975 1980 1985 1990 1995 2000 2005
-2000
Export/Import
Production decline rate ~ 10%
UK already a net importer
-4000
Quelle: BP Analyse: LBST, ß
32
1000 Barrel/day
6000
Indonesia
3500
1000
1965 1970 1975 1980 1985 1990 1995 2000 2005
Consumption
Export >
Import
-1500
-4000
Quelle: BP; Analyse: LBST, ß
33
Oil consumption in oil-producing
countries is rising sharply.
Less for export
from Oilwatch Monthly
August 2010
ASPO-Netherlands
Rembrandt Koppelaar
34
80
Per capita oil consumption
(Barrels/day/1000 people)
EU plus some others 2008
60
USA
Australia
Japan
Austria
40
Bangladesh
20
China
0
B C R P B SK H C P U IT LT To FR D SE A D ES Ja E FI A IE N N U B
an hi O L G
or L SA +
E
us
U Z T K
T K
pa L
ta
w
gl na
tr
LU
lE
n
ay
a
ad
l
U
ia
es
(+
N
h
or
w
ay
)
35
ENERGYwww.energyfiles.com
FILES
Rich
Poor
Energyfiles Ltd
Oil consumption is not shared equitably
US:
5% of world's population
uses ~ 25% of world oil
36
Energy2030 has four strategic goals:
Competitive Energy
Cleaner Energy
Secure Energy and
Reliable Energy.
These are all completely irrelevant
(or impossible) goals for liquid fuels
It is misleading and deceptive for
Governments to be so casual
about Peak Oil
Governments deliberately, or in ignorance,
confuse stationary energy and transport energy.
We have lots of coal and gas (electricity), but very little oil
www.energy.wa.gov.au
37
Australia
Actual
Forecast
1.0
Million barrels/day
}
0.8
Consumption
0.6
$17.8 billion
2007/08
0.4
P50
0.2
Production
0.0
1965
1975
1985
1995
2005
2015
2025
About 80% of Australia's transport fuel is now imported,
either directly, or refined in Australia from imported crude (AIP, 2008)
38
Mortgage and Oil Vulnerability
in Perth
Mapping oil vulnerability at high resolution
provides useful information for planners.
Like US cities, the outer suburbs of
Australian cities are more at risk from rising
fuel prices and mortgage interest rates.
Oil vulnerabilities of cities and regions
would be very useful to see where the
biggest oil vulnerability risks are (and to
help devise relevant mitigation and
adapation stragies)
www.griffith.edu.au/__data/assets/pdf_file/0003/88851/urp_rp17_dodsonsipe-2008.pdf
39
Sunshine Coast
Regional Council
September 2009
Maribyrnong City Council’s
Peak Oil Contingency Plan
a first for Australia
40
The Economist
17th June 2010
41
www.ASPO-Australia.org.au
General priorities for facing Peak Oil
1: Awareness and engagement
2:
Frugality
3:
Efficiency
4:
Equity
Low priority
Alternative fuels
and technologies
Failure to act now will prove incredibly costly
Noah built the Ark before the flood. It is very
hard to build an ark under water.
An oil vulnerability assessment and risk
management plan for Albany is an essential
first step
Hint: Check your superannuation
is not being invested into urban tollroads, tunnels and airports.
[email protected]
0427 398 708
08-9384-7409
42
a few more slides follow,
in case they are needed for questions
43
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 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.
44
Australian petrol & diesel rationing using 2010 technology
Smart-card based, scalable, tradeable, flexible, quick to change, equitable, transparent.
Fuel allocations should be per person, not per vehicle, and depend on
Location
(inner or outer suburb, public transport access, regional or remote)
Health status (elderly or infirm, expectant mothers with toddlers), less for the fit
who can ride a bicycle 20kms if needed
Job importance (defence, essential services, hospitals, food)
People are encouraged to conserve by being
able to trade unused allowances electronically
and automatically.
Martin Feldstein,
Chief Economic Advisor to
President Reagan,
now at Harvard, (WSJ 2006)
"tradeable gasoline rights
are more efficient than
fuel economy standards
or gasoline taxes"
45
Bicycles are powered by
biomass, renewable
energy
either Weetbix
or abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
46
Water Analogy for Fuel Pricing
A rational pricing system
Perth domestic water
Renewable scarce resource
A personal fuel SmartCard
system could tax petrol and
diesel on a sliding scale like
water.
People could trade unused
allocations to those who
want more fuel.
$2.00
Perth domestic water prices
per kilolitre 2008
$1.50
$1.00
$0.50
$0.00
0
150
350
550
Consumption range kilolitre/year
950
47
48
There are innumerable “Perverse” subsidies
to
roads,
4WDs
profligate vehicle users
heavy inefficient vehicles
FBT tax on cars
as part of salary
FBT tax on motor vehicles
30%
20%
10%
Supermarkets subsidise
CO2 $18/tonne
with their fuel dockets
0%
0
15,000
25,000
km range
40,000
Supermarket petrol discounts
People who walk to the
supermarket are subsidising
those who drive in the big SUVs
49
Gb/year
50
40
Efficiency
Transport
mode shifts
Demand
Growth
World oil
shortfall scenarios
Pricing / taxes
30
City design/lifestyle
Other petroleum fuels
gas, tar-sands
Other fuels
Past Production of Oil
20
Forecast
Production
10
0
1930
Deprivation, war
2009
1950
1970
1990
2010
2030
2050
• no single “Magic Bullet” solution,
• probably no replacement ever for cheap plentiful oil
• Urgent preparation and adjustment are vital
50
Rembrandt Koppelaar Oilwatch Monthly, January 2010
51
Gb/year
50
40
30
20
10
50
Demand
Trend
World oil
shortfall scenarios
40
Shortfall
Past Production of Oil
30
20
Forecast
Production
10
0
1930
2007
2030
2010
2030
0
1950
1970
1990
2050
By 2030, the gap is equivalent to 6,000 nuclear reactors
52
“OK, it’s agreed – we announce that to do nothing is not an
option and then we wait and see how things pan out”
from ‘Private Eye’
53
Government of Western Australia
STATE LIQUID FUEL SHORTAGE
EMERGENCY PLAN
OPERATIONAL PLAN
PREPARED BY
ENERGY SAFETY DIRECTORATE
DEPARTMENT OF CONSUMER
AND EMPLOYMENT PROTECTION
20 Southport Street, W Leederville WA 6007
Tel: (08) 9422 5200
Fax: (08) 9422 5244
January 2003
Current WA Government planning for a sudden fuel shortage
Ineffective and inequitable. Odds & Even number plates etc
Nothing significant about public transport
54
discussion paper, Liquid Fuel Emergency Act review, 2004
55
Petrol taxes OECD
Au$
cents/litre
UK
Korea
€
0.80
0.60
Australia
0.40
0.20
US
0.00
IEA Dec 2003
56
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
57
Australia
US
China
58
Bicycles are powered by
biomass, renewable
energy
either Weetbix
or abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
59
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
60
Million barrels
per day
(equivalent)
140000
140
120000
120
kb/doe
100000
100
80000
80
60000
60
WORLD OIL & GAS PRODUCTION
ASPO 2008 base case
NonCon Gas
Gas
NGL
Polar Oil
Deepwater Oil
Heavy Oil
Reg.Oil
40000
40
20000
20
00
1930
2009
1950
1970
1990
2010
2030
61
Iran 10c/litre
Venezuela 2c/l
Jeff Rubin
September 2007
Canadian Imperial Banking
Corporation
www.aspo-ireland.org/contentfiles/ASPO6/2-3_ASPO6_JRubin.pdf
62
World Liquids Exports estimate to March 2009
“Peak Exports” occurs before “Peak Oil”
million b/d
forecast
Rubin 2007
from Oilwatch Monthly: ASPO-Netherlands
Rembrandt Koppelaar
63
64
65
66
67
68
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.
69
Why are oil supplies peaking?
• Too many fields are old and declining
•
54 of 65 oil producing countries are in decline!
• 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
70
Macquarie report September 16th 2009
"The Big Oil Picture:
We're not running out,
but that doesn't mean
we'll have enough"
Financial Times
September 17th 2009
2005
2009
2013
Toronto
71
Australia
Actual
Forecast
1.0
Million barrels/day
}
0.8
Consumption
$17.8 billion
2007/08
0.6
0.4
P50
0.2
Production
0.0
1965
1975
1985
1995
2005
2015
2025
72
released 2nd March 2010
73
The graphed number of discoveries is misleading and deceptive.
It would be far more honest and relevant to graph the cumulative volume discovered.
This would not be so encouraging.
74
75
76
Dr Roger Bezdek, MISI, Washington
77
78
79
"The Big Oil Picture: We're not running out,
but that doesn't mean we'll have enough"
Macquarie report September 16th 2009
September 17th 2009
2005
2009
2013
80
Australia must not let the
opportunities slip away
Many of the policy options to reduce
fuel usage will also lead to wealthier,
healthier and happier communities.
Australia is very well placed globally
 Big attitude changes in past;
to race, gender, smoking, water..
 World-leading demand management skills
TravelSmart and water conservation
 Considerable uncommitted gas reserves
Failure to act now will prove incredibly costly
Abstract at www.STCwa.org.au/aspo
See our “Oil: Living with Less” policy
Sustainable Transport Coalition www.STCwa.org.au
81