Peak Oil: Impacts on MDGs and options for Australia Bruce Robinson Convenor 15th March 2008

1. Peak Oil: Impacts on MDGs and options for Australia Bruce Robinson Convenor 15th March 2008

2. www.ASPO-Australia.org.au An Australia-wide network of professionals working to reduce oil vulnerability 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 Regional and city working groups Construction Industry Public transport sector Defence and Security Economics Tourism Children and Peak Oil Young Professionals working group

3. Peak Oil 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 ? ? 2012 +/- 5 years "Peak Exports" is even more important, and sooner ● Peak Oil will impact very dramatically on the MDGs, unless the developed world reduces its consumption to leave enough for developing countries. ● Options for Australia and Australians but when? 2050 2010 1970 1930

4. US oil peak 1970

5. "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” www.isv.uu.se/iwood2002

6. 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 Production M b/day Price $/barrel 100 90 80 70

7. Monday October 22 2007 Fig. 7 Oil production world summary MDG target 2015 2008

9. Chris Skrebowski Editor, Petroleum Review, LondonThe practical realities • Worry aboutflows not reserves • "Deliverability" “It isn't the size of the tank; it’s the size of the tap” (ASPO-USA)

10. 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.’

11. The real oil discovery trend Longwell, 2002

12. Iran 10c/litre Venezuela 2c/l Jeff Rubin September 2007 Canadian Imperial Banking Corporation

13. World Liquids Exports estimate to November 2007 “Peak Exports”occurs before “Peak Oil” forecast Rubin 2007 from Oilwatch Monthly: ASPO-Netherlands Rembrandt Koppelaar

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

15. Australia uses 51,000 megalitres of oil each year a 370m 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 → ethanol = 10% 100 ml of oil contains 1 kWh of energy. Enough to move a small car to the top of the Eiffel tower

16. Million barrels/ day 2006 BP Statistical Review, 2007 Australia uses 0.9 China 7.4 US 20.6 World 83.7 US 1 cubic km oil / year 1 km l l China Australia United States

17. Australia Actual Forecast } Consumption $12.5 billion 2006/07 P50 Production

18. Worldwide Crash Program Mitigation of Conventional Oil Production Peaking A Study for US DOE NETL Hirsch, Bezdek and Wendling, 2005 2005 Study 35 EOR Coal Liquids 25 Impact (MM bpd) Heavy Oil 15 GTL 5 Efficient Vehicles 0 0 5 10 15 20 Years After Crash Program Initiation Delay / Rapid growth. Roughly 35 MM bpd at year 20.

19. 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

20. VAMPIRE Oil vulnerability and mortgage rate risk Sydney Dodson & Sipe, Griffith University, 2006 www.aspo-australia.org.au/content/view/120/55/

21. Gboe/pa World All Oil www.PeakOil.netASPO 2006 } Oil 2007

22. ABARE's oil price forecasts have proven to be systematically low Economists' forecasts published Nov 2005 Prof Tony Owen, UNSW, now at Curtin $35/barrel in a couple of years Nobel Economics winner, Vernon Smith (at UNSW) $15/barrel in the near future

23. 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 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.

24. Available oil is not shared equitably US: 4% of world's population uses 25% of world oil China: 21% of world population uses 8% of world oil Australia's per capita oil use is 70 times that of Bangladesh There is a car-population explosion underway, especially outside the OECD. Energyfiles Ltd Peak Oil will impact very dramatically on the MDGs, as well as on Australia The developed world must reduce its consumption to leave enough for developing countries "Live simply, so others may simply live"

25. Priorities 1: Awareness and engagement 2: Frugality 3: Efficiency Last: Alternative fuels www.ASPO-Australia.org.au Failure to act now will prove incredibly costly, both to us, and especially to the MDGs Ecological footprints Hint: Check your superannuation is not being invested into urban toll-roads, tunnels and airports. Bruce.Robinson@ASPO-Australia.org.au 0427 398 708 61-8-9384-7409

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

27. Petrol taxes OECD € UK Au$ cents/litre Portugal 0.80 0.60 Australia 0.40 0.20 US 0.00 IEA Dec 2003

28. 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

29. Australia US China

31. Bicycles are powered by biofuel, renewable energy, either Weetbix or abdominal fat No shortage of either www.ASPO-Australia.org.Au

32. Look out !! Something serious is looming on the radar ? ? ? ? Peak Oil: Impacts on MDGs and options for Australia Bruce Robinson Convenor 15th March 2008

33. Hurricane Katrina New Orleans US Federal, State and local Governments were shown to be shortsighted, ill-prepared, uncaring and disorganised. Australian governments are much less organised for Peak Oil

37. Gb/year Efficiency Demand Growth World oil shortfall scenarios Transport mode shifts Pricing / taxes City design/lifestyle Past Production of Oil Other petroleum fuels gas, tar-sands Other fuels Deprivation, war Forecast Production 2007 • no single “Magic Bullet” solution, • probably no replacement ever for cheap plentiful oil • Urgent preparation and adjustment are vital

38. 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

39. } Oil 2007 Gboe/pa World All Oil www.PeakOil.net ASPO 2006

40. } Gas } Oil 2007 Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl) www.PeakOil.net ASPO 2006

41. } Gb/year 50 Demand Trend World oil shortfall scenarios 40 Shortfall Past Production of Oil 30 20 Forecast Production 10 2007 2030 0 By 2030, the gap is equivalent to 6,000 nuclear reactors

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

43. 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.

45. 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 internationaltrade may peak earlier • Collectively we are still in denial

46. Global liquids capacity to 2015

48. Past World Oil Production and Forecasts IEA 2002 Dr Ali Samsam Bakhtiari Iran Schindler & Zittel, Oct 2007 Germany 4 4 40 Prof. Bauquis France Shell 0 0 3 3 30 Deffeyes Bauquis, Total 0 0 Gb pa 2 2 20 ASPO & Skrebowski 0 0 1 1 10 0 0 2007 0 0 0 0 1930 1970 2010 2050 Chris Skrebowski UK 1 1 2 2 4 4 6 6 8 8 10 10 12 12 1 1 1 1 1 1 1 1 1 1 1 1 Prof. Aleklett, ASPO Sweden

49. 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