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Peak Oil Values & Policy for 21C Towards 2020 Climate Change Conference Sunshine Coast, Queensland 8-9th June 2007. Ian T. Dunlop Deputy Convenor. The Peak Oil Opportunity. Peaking of Oil Supply oil is not running out

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Peak OilValues & Policy for 21CTowards 2020Climate Change ConferenceSunshine Coast, Queensland8-9th June 2007

Ian T. Dunlop

Deputy Convenor


The peak oil opportunity
The Peak Oil Opportunity

  • Peaking of Oil Supply

    • oil is not running out

    • but soon it will not be physically possible to expand oil supply to meet increasing demand

  • Climate Change and Peak Oil are inextricably linked

    • and converging

  • Solutions to Peak Oil must reinforce, and not conflict with, solutions to Climate Change

  • Convergence will profoundly alter our way of life, our institutions & our prosperity

    • for the better, as our current lifestyle is not sustainable


Global drivers
Global Drivers

  • Population Growth

  • Poverty & Inequality

  • Liberalisation

  • Globalisation

  • Technological Change

  • Sustainability


World population
World Population

Where to ?

BC

AD

Source: J.E.Cohen, Columbia University, New York, 2005


Poverty inequality
Poverty & Inequality

Enjoy 80% of World GDP

World Population = 6.5 billion

Source: World Bank Global Database 2004


World ecological footprint
World Ecological Footprint

Source: Global Footprint Network


World energy consumption
World Energy Consumption

Source: BP Statistical Review of World Energy 2006



Energy demand growth official forecast 1971 2030
Energy Demand Growth“Official Forecast” 1971 - 2030



World oil production
World Oil Production

Source: BP Statistical Review of World Energy 2006


Peak oil matters oil dominates its markets
Peak Oil matters Oil dominates its markets

  • 80-95% of all transport is fuelled by oil products

  • 50-75% of all oil is used for transportation

  • All petrochemicals are produced from oil

  • 99% of all lubrication is done with oil products

  • 95% of all goods in the shops get there using oil

  • 99% of our food involves oil or gas for fertilisers, agrochemicals, tilling, cultivation and transport

  • Oil is the most important source of primary energy on the planet accounting for 36.4% of all energy




The oil triangle of the middle east
The Oil Triangle of the Middle East

Within the Oil Triangle you can find roughly 60 percent of the remaining oil reserves in the world. The 2001 Cheney report, US Energy Policy, says that in year 2020 around 54 to 67 percent of the world consumption of oil needs to come from the Oil Triangle.

Qatar


Typical oil province production profile
Typical Oil Province Production Profile


The growing gap
The Growing Gap

Source: Exxon Mobil 2002 - updated


Oil availability the official future in 2005
Oil Availability The “Official Future” in 2005

Availability of oil resources as a function of economic price

Source: IEA (2005)


Official future today
“Official Future” Today

“ The energy future which we are creating is unsustainable. If we continue as before, the energy supply to meet the needs of the world economy over the next 25 years is too vulnerable to failure arising from under-investment, environmental catastrophe or sudden supply interruption”

Claude Mandil

Executive Director

International Energy Agency

World Energy Outlook 2006


Global Oil Depletion - ASPO

Source: Association for the Study of Peak Oil


Crude oil prices 1861 2005
CRUDE OIL PRICES1861-2005

Source: BP Statistical Review of World Energy 2006


The economist s view
The Economist’s View

“If the price of eggs is high enough, even the roosters will start to lay”

Perhaps, but if economists were farmers, geologists or petroleum engineers it would be a strange world !

Dr. Brian Fisher

Executive Director

ABARE

May 2006


Why are oil supplies peaking
Why are oil supplies peaking?

  • We are not finding oil fast enough

  • It is getting harder

  • We are not developing fields fast enough

  • Too many fields are old and declining

  • We are short of people and equipment

  • Oilfield inflation is soaring

  • Our societies are totally oil dependent

  • Oil supply will peak soon.



Deep water oil vs mt everest
Deep Water Oil vs Mt. Everest

8,848 metre

Sea Level

2,100 metre to seabed

8,588 metre to oil reservoir

New US Gulf of Mexico oilfield

Jack 2


What will the peak look like
What will the Peak look like ?

  • It could be sharp and nasty

    • geopolitical supply disruption / constraint

    • major oilfield depletion acceleration

    • producing countries consume more oil internally

    • climate change impact - Hurricane Katrina

  • It could be an “undulating plateau”

    • demand destruction

      • developing world cannot afford high prices

      • climate change emissions constraints

    • extra supply accelerates

      • to balance depletion

  • We will probably only see it in the rear-vision mirror

    • we may already be there


Solutions but hurry
Solutions -- but hurry

  • Efficiency in use

  • Demand management

  • Biofuels

  • Heavy oils and tarsands

  • Clean coal to create syngas

  • Gas to liquids

    The solutions must not worsen climate change


2005

Gbbls/year

Efficiency

Demand

Growth

Global Oil Solutions

Filling the gap

Transport

mode shifts

Pricing / taxes

City design/lifestyle

Past Production of Oil

Other petroleum fuels

gas, tar-sands

Other fuels

Deprivation, war

Forecast

Production

  • no single “Magic Bullet” solution, but lots of “Magic Buckshot” !

  • probably no replacement ever for cheap plentiful oil

  • urgent preparation and adjustment are vital



Australia uses 45,000 megalitres of oil each year

= a 360m cube

Sydney Harbour Bridge

is 134 m high

80% of Australia’s oil usage is in transport

If Australia’s 20 M tpa wheat crop was all converted to ethanol:

= 9% of Australian oil usage


Oil Consumption

Comparison

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

1 km

l

l

Australia

United States

China


Total Oil Consumption

Production Net imports

M bbl/day

China

20

EU 15 + Norway

Australia

10

l

l

1 km

United States

0

Aust Eu-15+ USA China Japan

Aust Eu-15 USA China Japan

Oil consumption bbl/day/1000 people

Registered vehicles /1000 people

70

60

50

40

30

20

10

0

Aust Eu-15 USA China Japan


Who gets the available oil
Who Gets The Available Oil ?

  • Market forces

    • the wealthy win

  • The “Washington Consensus”

    • send in the marines !

  • A global “Oil Depletion Protocol”

    • sharing equitably

    • an oil equivalent of the Kyoto Protocol


Oil depletion protocol
Oil Depletion Protocol

  • A Developed World View:

    • Every nation would reduce their oil consumption annually by at least the global depletion rate

    • No country would produce oil at above its present depletion rate

    • No country would import oil at above the global depletion

  • A Developing World View

    • Equal per capita oil allocation globally, by a date to be agreed

  • National oil descent budget managed by a Tradeable Energy Quota system

    • with personal per capita oil allocation

  • Climate change and peak oil TEQ systems work in parallel

Sources: Dr. Colin Campbell, ASPO Australia


Community awareness commitment
Community Awareness & Commitment

  • Transition to a low-carbon economy will fundamentally alter lifestyle of entire community

  • Peak Oil is barely on our radar

    • but it may be the issue which has a greater impact than climate change in the short-term

  • Be aware and prepare!

  • Requires principled, long term leadership

  • Community involvement and pressure are essential drivers

  • A unique opportunity to set humanity on a new course built on sustainable principles


Technology alone is not enough values must change
Technology alone is not enough.Values must change

Technology

New

Existing

New

Values

Existing

Source: Hardin Tibbs


21st century value shift
21st Century Value Shift

Population

  • Values in 20th C

  • Quantity

  • Economy

  • Growth

  • Consumption

  • Materialism

  • Competition

  • Selfism

  • Nationalism

  • Short-term

  • Chains

  • Values in 21st C

  • Quality

  • Environment

  • Sustainability

  • De-materialisation

  • Self-restraint

  • Cooperation

  • Mutualism

  • Globalism

  • Long-term

  • Loops

Time

[email protected]


Adaptive change
Adaptive Change

“It is not the strongest of the species that survive, nor the most intelligent, rather it is those most responsive to change”

Charles Darwin




How old are the fields
How old are the fields?

  • Of the 18 largest fields, 12 are in decline, 5 have some potential and 1 is undeveloped

  • The 120 largest fields give 50% of total

  • 70% of production from fields 30+ years old

  • Few large recent discoveries

  • We’re dependent on the oil equivalent of ‘Old men and young boys’


Sustainability
Sustainability

“ Meeting the needs of the present without compromising the ability of future generations to meet their own needs”

Gro Harlem Brundtland, “Our Common Future”,1987

“In a sustainable society, the rates of:

  • use of renewable resources do not exceed their rates of regeneration

  • use of nonrenewable resources do not exceed the rate at which sustainable renewable substitutes are developed

  • pollution emissions do not exceed the assimilative capacity of the environment”

    Herman Daly


Tradeable energy quotas
Tradeable Energy Quotas

An electronic system for rationing carbon-rated energy…

for all energy users…

at national level.

Also can be used to maintain a fair distribution of a scarce commodity such as oil or water


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