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2 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

3 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) Will market forces solve our Peak Oil problems ? no, sorry! Why is there no sign that anyone is taking Peak Oil risks seriously? don't know Should local Government be helping prepare the community for Petrol Droughts and Peak Oil ? YES, indeed ! Can WALGA and regional council groupings help to nudge State and Federal Govts into action ? please ! Peak Oil but when?

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

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

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9 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 don’t? Undecided Eric Streitberg Executive Director ARC Energy Limited Australian Petroleum Production & Exploration Association conference APPEA April 2005 Perth 1/3 rd

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

11 Prof. Aleklett, ASPO Sweden

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13 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

14 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.’

15 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

16 The real oil discovery trend Longwell, 2002

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

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

20 Chris Skrebowski's conclusions

21 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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23 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 80% of Australia’s oil usage is in transport If Australia’s 20 M tpa wheat crop → ethanol = 9%

24 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

25 "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".

26 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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28 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

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33 $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"

34 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

35 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%

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37 Bicycles are powered by biofuel, renewable energy, either Weetbix or abdominal fat No shortage of either

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

39 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.. 8. Railways, cyclepaths and public transport are better investments than more roads. 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.

40 Assessing Transport Disadvantage

41 Land Use and Public Transport Accessibility Index (LUPTAI)

42 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 load- shedding in the event of a liquid fuel emergency. PTA must have more input into Liquid Fuel Shortage planning

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46 The UK Fuel Tax Escalator Margaret Thatcher Australian fuel taxes should be raised to European levels on a fuel tax escalator Nominal tax per litre (pence) Real tax pence

} Oil Gboe/pa World All Oil ASPO Gboe NGL Polar Deepwater Heavy etc Regular Oil

} Oil } Gas Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl) ASPO Gboe Non-Con Gas Gas NGL Polar Deepwater Heavy etc Regular Oil

World oil shortfall scenarios Past Production of Oil Forecast Production Demand Trend Gb/year Shortfall By 2030, the gap is equivalent to 6,000 nuclear reactors 2030

50 Urban passenger mode shares Australia Potterton BTRE 2003 High automobile-dependence Public transport share is very low Car

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52 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

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55 February 2004

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61 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 Monday October 22, 2007 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.

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