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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.

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Presentation on theme: "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."— Presentation transcript:

1 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

2 2 Outline What is Peak Oil ? the time when global oil production stops rising and starts its final decline We will never "run out of oil" ● When is the most probable forecast date ? perhaps (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 Peak Oil but when?

3 3 An Australia-wide network of professionals working to reduce oil vulnerability ASPO-Australia Working groups 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 ASPO-Australia is part of the international ASPO movement Senate Inquiry into Australia's future oil supply and alternative transport fuels

4 4 Rolf Willkrans Director Environmental Affairs ASPO Lisbon 2005

5 5 Unexpected transport pattern changes, infrastructure & planning decisions Fremantle Passenger Terminal completed 1962

6 6 Passengers p.a. Fremantle Port Fremantle Passenger Terminal opened Unexpected transport pattern changes, and infrastructure

7 7 Passengers p.a. Fremantle Port Fremantle Passenger Terminal opened Unexpected transport pattern changes, and infrastructure World Air travel

8 8 Fremantle Passenger Terminal

9 9 Many books about Peak Oil Campbell & Laherrère March 1998 Campbell 2003 Brian Fleay Perth 1995 Deffeyes 2001 Heinberg 2003 Roberts

10 10 Please put your hand up if you think that we have crossed the Hubbert Peak and hands up those who don’t? Undecided Eric Streitberg Executive Director ARC Energy Limited Australian Petroleum Production & Exploration Association conference APPEA April 2005 Perth 1/3 rd

11 11 Mb/d US oil production: Peak in Jeremy Gilbert, ex BP

12 12 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 The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in much earlier than most experts had expected. Monday October Fig. 7 Oil production world summary

13 13 Prof. Aleklett, ASPO Sweden

14 14

15 15 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

16 16 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.’

17 17 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

18 18 The real oil discovery trend Longwell, 2002

19 Barrel/day UK Consumption Export/Import Quelle: BP Analyse: LBST, ß Production decline rate ~ 10% UK already a net importer

20 Barrel/day Indonesia Consumption Export Quelle: BP; Analyse: LBST, ß

21 Barrel/day China Consumption Imports Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi 2020 Production

22 22 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 million barrels/day Oil supply in international trade may peak earlier Collectively we are still in denial

23 23 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 Cork, Ireland 17-18th September 2007

24 24

25 25 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

26 Geoscience Australia, APPEA, ABARE Australia’s oil production and consumption Million barrels/day Actual Forecast Consumption Production P50

27 27 Perth’s Central Park building is 249 m high, to top of tower Australia uses 45,000,000,000 litres of oil each year a cube of about 360 metres size 100 ml of oil contains 1 kWh of energy. Enough to move a small car to the top of the Eiffel tower 80% of Australia’s oil usage is in transport If Australia’s 20 M tpa wheat crop → ethanol = 9% =1.3 EfT 3

28 28 Australia China United States 1 km l l Million barrels/ day 2005 BP Statistical Review, 2006 Australia uses 0.9 China7.0 US20.6 World82.5 US 1 cubic km oil / year

29 29 "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".

30 30 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".

31 Years After Crash Program Initiation Impact (MM bpd) EOR Coal Liquids Heavy Oil GTL Efficient Vehicles Worldwide Crash Program Mitigation of Conventional Oil Production Peaking A Study for US DOE NETL Hirsch, Bezdek and Wendling, 2005 Delay / Rapid growth. Roughly 35 MM bpd at year Study

32 32 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 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 Full presentation slides and video at

33 33 Time Cost of Error COST AS A FUNCTION OF START TIME (Notional) Premature Start Peaking Scenario I - 10 Years Scenario II - 20 Years Scenario III “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

34 34 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 Les Magoon, USGS 2001

35 35 Mortgage and Oil Vulnerability in Perth at

36 36 $10 PER LITRE PETROL: A SCENARIO David Rice, Senior WA Transport Planner But why $10/l? Simple memorable an illustration of ‘expensive’ see in "bibliography"

37 37 Analogy: The Canberra fire- storms 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

38 38 Landsat image of Canberra region showing fire- damage from the west. January 2003.

39 39 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. Perth 30 km

40 40 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. Perth 30 km

41 41 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. Perth 30 km

42 42 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. Perth 30 km

43 43 Perth 30 km The outskirts of all Australian cities will be hard hit by oil depletion, as public transport infrastructure is very poor 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.

44 } Oil Gboe/pa World All Oil ASPO 2006

45 45 Perth Sydney

46 46 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) Fax: (08) January 2003

47 47 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. { If 25% of car users change to public transport PERTH TRAVEL SURVEY Mode Shares Walk only10.6% Cycle1.6% Public transport3.9% Car passenger29.1% Car driver53.2% Other (taxi, motorbike, etc.)1.5% Total100.0%

48 48 Priorities First: Awareness and engagement (including within public transport planning) 2: Frugality 3: Efficiency Last: 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.

49 49 a few more slides follow, in case they are needed for questions

50 50 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. Australian Government Policy and Action Options 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 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.


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