1 The Impact of Oil Depletion on Australia Bruce Robinson, Brian Fleay & Sherry Mayo Sustainable Transport Coalition ASPO Lisbon May 2005 ? ? ? ? ? Look Out Australia ! Something serious is looming on the radar Sustainable Transport Coalition

2 Summary Australia, now Oil demand, production, use (transport) Geography, population 3 different countries remote, rural, urban High Oil Vulnerability Australia will be badly affected by oil depletion, unless substantial changes are made Possible change options for government

3 80% of Australia’s oil usage is in transport If Australia’s 20 M tpa wheat crop → ethanol = 9% Australia uses 45,000 megalitres of oil each year a 360m cube Sydney Harbour Bridge is 134 m high =1.3 EfT 3

Oil consumption bbl/day/1000 people Aust Eu-15 USA China Japan Registered vehicles /1000 people Total Oil Consumption Production Net imports Aust Eu-15+ USA China Japan M bbl/day EU 15 + Norway 1 km Australia China United States ll

5 Australia's liquid fuel production decline began in Powell, Geoscience Australia, 2001

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

Evolution of Forecasts of Australian Oil Production Geoscience Australia (Australian Geological Survey) k bbl/day Actual Forecasts

Evolution of Forecasts of Australian Oil Production Geoscience Australia (Australian Geological Survey) k bbl/day Actual Forecasts Past liquids production forecasts have often proven too low. NGL production depends on gas contracts

9 Australia “A wide brown land” “The Tyranny of Distance” Annual rainfall mm Perth to Sydney 3300 km Big Mostly arid Mostly low fertility soils 20 M people Already exceeding sustainable population

10 Europe and Australia by night – same scale, same brightness

11 Remoteness classification Major cities Inner regional Outer regional Remote Very remote Major cities Outer regional Remote Inner regional 3 separate countries Remote Regional Urban 3% 31% 66%

12 Indigenous communities Blackstone community ROAD ACCESS: 800 km to Alice Springs km to Kalgoorlie Weekly police patrol visits by vehicle from Laverton, 750 km to the West. Twice weekly small aircraft from Alice Springs to Kalgoorlie, The largest dots indicate 500 people or more, the smallest less than % of Australians are indigenous Remote Australia mining, pastoral, indigenous

13 Blackstone Community Circa people ROAD: 800 km to Alice Springs (food and fuel)

14 Iron ore train, Pilbara ~ 200M tonne p.a. Road trains

15 Brockman Iron Formation, near Mt Tom Price, NW Western Australia

16 Rural Australia Sparsely populated

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18 Urban/Suburban Australia Institute for Sustainability and Technology Policy Murdoch University, Perth City wealth vs car use per capita (1990) Aus US Europe car use wealth

19 Urban Australia Keilor Downs NW Melbourne

20 Melbourne Urban Sprawl 30 km Keilor Downs

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

22 Non-urban passenger outlook: Air grows faster than other modes Potterton BTRE 2003 Air passenger Car

23 $10 PER LITRE PETROL: A SCENARIO (a ten-fold increase) David Rice, Senior WA Transport Planner The scenario means “What if petrol reaches $10/l? Planners should include this scenario, as well as “business-as-usual” But why $10/l? Simple memorable an illustration of ‘expensive’

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25 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 The impact of oil depletion on Australian cities. The bushfire analogy

26 Satellite image of Canberra region showing fire- damage from the west. January Red hues are burnt areas. White lines show suburbs

27 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

28 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

29 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

30 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

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

32 The Guardian Tuesday December 2, 2003 “Bottom of the barrel The world is running out of oil - so why do politicians refuse to talk about it? Every generation has its taboo..the resource upon which our lives have been built is running out. We don't talk about it because we cannot imagine it. This is a civilisation in denial”. George Monbiot see short most ^ UK National Newspaper

33 Govt releases new energy strategy Future oil summary, IEA only “No Worries” Another “Intelligence Failure” like WMD? June 15, 2004

34 “Production itself is likely to peak, maybe as early as 2006, but more conventionally 2010 – 2015” “It is also certain that the cost of preparing too early is nowhere near the cost of not being ready on time.” WA Minister Alannah MacTiernan “Peak oil represents the most serious and immediate challenge to our prosperity and security. It will impact on our lives more certainly than terrorism, global warming, nuclear war or bird flu.” Queensland State Parliament Western Australian State Government

35 World oil shortfall scenarios Past Production of Oil Forecast Production Demand Growth Deprivation, war City design/lifestyle Pricing / taxes Transport mode shifts Efficiency Other petroleum fuels gas, tar-sands Other fuels Gb/year no single “Magic Bullet” solution, Noah! Start now! Hard to build the ark under water 2005 after Swenson, 2000

36 Individualised Marketing: Travel behaviour change Equivalent to discovering another Iraq? Reducing automobile travel can produce “nega-barrels”* of oil more cheaply than oil can be found by exploration. (*negative oil, saved by conservation) Large programs in cities in Germany, Australia & Sweden have shown sustained average reductions of 13% in car-kms travelled. Individualised Marketing informs interested people of available travel options. They are empowered to choose different travel modes and to reduce unnecessary travel. The strategy (IndiMark®) was developed by Munich firm Socialdata. About half the world’s 80 million barrels of oil per day goes on road transport. A 5% reduction in global motor vehicle transport usage would save about as much oil as Iraq now produces (circa 2M b/d). Reduction of 10% in US travel alone would save half an “Iraq”. Discovering another Iraq ?

37 Petrol taxes OECD IEA Dec 2003 Portugal UK Australia US € Au$ cents/litre

38 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

39 “Add in the geopolitical costs of oil and the case for raising petrol taxes, especially in America, becomes overwhelming” April 30 th - May 6 th 2005

40 A rational pricing system Perth domestic water Renewable scarce resource A personal fuel SmartCard system could tax petrol and diesel on a sliding scale like water. People could trade unused allocations to those who want more fuel. Water Analogy for Fuel Pricing

41 to roads, 4WDs profligate vehicle users heavy inefficient vehicles Supermarket petrol discounts People who walk to the supermarket are subsidising those who drive in the big SUVs There are innumerable “Perverse” subsidies Tax on cars as part of salary

42 Participatory Democracy 1300 people at city planning workshop Perth 2003 Oil depletion action needs an informed and engaged community

43 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 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.

44 Australia must not let the opportunities slip away Many of the policy options to reduce fuel usage will also lead to wealthier, healthier and happier communities. Australia is very well placed globally  Big attitude changes in past; to race, gender, smoking, water..  World-leading demand management skills TravelSmart and water conservation  Considerable uncommitted gas reserves Failure to act now will prove incredibly costly Abstract at See our “Oil: Living with Less” policy Sustainable Transport Coalition

45 Two spare slides follow in case of questions

46 “Oil: Living with Less” at Bicycles are powered by biomass, renewable energy, either breakfast cereal or abdominal fat No shortage of either

47 China US Australia