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Australia’s Energy Future Where to from here

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  1. ARC Energy Directors Dinner Keynote 18 November 2006 Perth W Australia Australia’s Energy FutureWhere to from here Annimac / Anni Macbeth Futurist www.annimac.com.au

  2. Most powerful industries • Technology I C T • Energy Oil & gas www.annimac.com.au

  3. Big Picture • Global trends impacting industry • Industry trends for the future • Where Perth fits in all this www.annimac.com.au

  4. Rate of Change • Exponential • Amount in one day same as Grandfather had in one year • Younger means faster www.annimac.com.au

  5. I’m never having kids. I hear they take nine months to download. www.annimac.com.au

  6. Driving all Change :Technology by 2020 70%of job types new because www.annimac.com.au

  7. Driving all Change : Technology by 2020 80%technology then not imagined yet www.annimac.com.au

  8. Likely jobs in next 10 years : • Director of Emerging Thought • Robotics Ethicist • Creative Undertaker • Biotech Rigger • Chief Nanotech Geologist • Hacker Relations Manager • Valuer of Intangible Assets * • Human Interface Manager * * Exists 2003 www.annimac.com.au

  9. Big PictureWhat’s pushing the industry • O&G Peak Oil • Political power shift • Global economic shift • Global values shift www.annimac.com.au

  10. O & G Peak Oil or The Big Rollover • Supply > Demand www.annimac.com.au

  11. From Chris Skrebowski's recent visitThe practical realities • world needs oil production flows • consumers need delivery flows • reserves only useful as flows • Peak Oil : flows can’t meet demand • worry about flows not reserves www.annimac.com.au

  12. Why does it matter ? www.annimac.com.au

  13. Industry attitudesThree Wise Monkeys • Oil Companies : - hear no depletion • Governments & International Agencies : - see no depletion • And all agree it would be best to : - talk no depletion www.annimac.com.au

  14. Four Corners Peak Oil? 10.7.06 Dr Brian Fisher ABARE : If the price of eggs is high enough, even the roosters will start to lay. Running on empty August 27, 2006 You're about to hear two of the scariest words in the English language — "peak oil".Effectively, they mean the end of the world as we know it. The Prime Minister is selling Australia short by pinning his hopes on a fall in petrol prices. 31/8/06 Min Alannah MacTiernan : major Federal investment in public transport was vital if Australia was to avoid major disruption as global petroleum production reached its peak. Oil prices will keep rising: analyst The Age, August 21, 2006 Chris Skrebowski."The price of oil will continue to rise until world oil production peaks in 2010 at around 94 million barrels of oil per day Oil production limit reached: expert ABC NewsJuly 10, 2006. An international oil industry expert says the limit of global oil production has been reached. Former National Iranian Oil Company executive Dr Ali Samsam Bakhtiari has told the Financial Services Institute in Sydney the world's oil fields are producing as much oil as they can. www.annimac.com.au

  15. The Peak of World Oil Production OIL BUYERS MARKET SELLERS MARKET 3 5 3 0 CHEAP & EASY-TO-EXTRACT OIL 2 5 2 0 We are here Past oil production 1 5 US Previous Rollovers Forecast oil production North Sea 1 0 5 0 1 9 3 0 1 9 5 0 1 9 7 0 1 9 9 0 2 0 1 0 2 0 3 0 2 0 5 0 EXPENSIVE & HARD-TO-EXTRACT OIL Annual Oil Production Gbbl www.annimac.com.au

  16. How much O&G is there ?(ASPO 2005 estimate) www.annimac.com.au

  17. www.annimac.com.au

  18. Norway (North Sea) Typical Oil Depletion Curve Werner Zittel , LBST www.annimac.com.au

  19. Saudi Reserves Seriously Overstated Matthew Simmons February 2004 2004 www.SimmonsCo-Intl.com www.annimac.com.au

  20. IHS and O&GJ Remaining Reserves Francis Harper ASPO 2004, Berlin Data from IHS Energy and OGJ annual reports www.PeakOil.net www.annimac.com.au

  21. Study : World oil forecast beset with reserves shortfalls 2004 2016 Oil & Gas Journal12/4/2004 Douglas - Westwood Ltd Cambridge UK www.annimac.com.au

  22. Oil discovery Oil production Forecast ? ASPO Newsletter 40 April 2004www.PeakOil.net www.annimac.com.au

  23. What about Australia ? Haven’t we got plenty ? (Geosciences Australia) www.annimac.com.au

  24. www.annimac.com.au

  25. Why Peaking sooner than expected ‘Global production falls when loss of output from countries in decline exceeds gains in output from those that are expanding.’ www.annimac.com.au

  26. Why supplies are peaking • We are not finding oil fast enough • We are not developing fields fast enough • Too many fields are old & declining • We are short of people & equipment • Oilfield inflation is soaring www.annimac.com.au

  27. The real discovery trend Past discovery according to Exxon Mobil www.annimac.com.au

  28. Discovery to Production: takes 2 to 25 years Global new field discovery (7-10bn b/y) Tar sands and Heavy oil Biofuels + others Known oil reserves in production (90%) NIP 10% EOR Yet-to-find probable Yet-to-find possible Current supply 84mn b/d or 30bn b/y 2 to 25 years www.annimac.com.au

  29. Ageing fields • 18 largest fields • 12 are in decline • 5 have some potential • 1 is undeveloped • 120 largest fields give 50% of total • 70% of production from fields 30+ yrs old • few large recent discoveries • dependent on ‘Old men & young boys’ www.annimac.com.au

  30. BP statistics • OECD production peaked 1997 • OECD output declined by 2 million b/d : 8.8% • Non-OPEC non-FSU production peaked 2002 • North America/ Mexico peaked 1997 • North Sea - UK/Norway/Denmark peaked 2000 now declined by 1.2 million b/d (19.2%) • 25 significant producers in decline • 28% of global production from decliners www.annimac.com.au

  31. Top five decliners 2005 www.annimac.com.au

  32. Others about to decline • Denmark 2005 • Malaysia 2005 • Mexico 2005 • Vietnam 2005 • India 2006/07 • China 2007/08 • Iran struggling -- next to go ? 9.9m b/d or 12.3% of all production www.annimac.com.au

  33. Real new capacity to 2012 ( Peak in first quarter of 2011 ) www.annimac.com.au

  34. Chris Skrebowski's conclusions • Supply will remain tight & prices high barring major economic setback • Oil supply will peak in 2010/2011 at around 92-94 million barrels/day • Oil supply in international trade may peak earlier than oil production peak • Collectively we are still in denial • Only 1,500 DAYS to PEAK ! www.annimac.com.au

  35. ABARE forecasts Random number generator ABARE differs "If the price of eggs is high enough, even the roosters will start to lay." ABARE to Senate inquiry into Australia's future oil supplies www.annimac.com.au

  36. 15th December 2003 Common Myth (super +) Leonardo Maugeri, Economist ENI SPA Rome “..just as the Stone Age did not end for the lack of stones, the Oil Age will not end because of the scarcity of oil. Rather oil will inevitably be surpassed in convenience by a new source of energy in the future ” BiomassWalking, horses, horse & cart, horse-drawn barge Coal 40% world’s electricity Trains Oil (& gas) Cars, trucks, trains, planes ?? Thermodynamics ? Theology ? Nuclear Thorium ? www.annimac.com.au

  37. Common Myth (-) Richard Miller BP Exploration Operating Co. Ltd. Middlesex, UK 12th January 2004 “ oil, the most energy-dense of the natural, non-nuclear fuels on the planet. But there isn't anything conceivable that could replace conventional oil, in the same quantities or energy densities, at any meaningful price…” Whom should we believe ? www.annimac.com.au Whom should we believe ?

  38. Everyone agrees : Change is inevitable . Bookies’ odds : Peaking in 2010 - 2015 www.annimac.com.au

  39. What’s pushing the industry : • O&G Peak Oil • Political Power Shift • Global Economic Shift • Global Values Shift www.annimac.com.au

  40. Global Economic Power www.annimac.com.au

  41. Economic domination 200 yrs www.annimac.com.au

  42. shiftingto Western Pacific Rim www.annimac.com.au

  43. Global Cultural power www.annimac.com.au

  44. Christian domination 500 yrs www.annimac.com.au

  45. Pope’s Funeral 2 billion people watched world media www.annimac.com.au

  46.  to Confucian / Islam influence www.annimac.com.au

  47. Chi master class with MIT engineers www.annimac.com.au

  48. Japanese Robanoids 2006 Your next receptionist ? Mine site tour guide ? Fastest www.annimac.com.au

  49. What’s pushing the industry : • O&G Peak Oil • Political Power Shift • Global Economic Shift • Global Values Shift www.annimac.com.au

  50. Global Shifting Values Gap widening : • knowledge • haves / have nots • age generations • technologically connected www.annimac.com.au