Implications of Global Oil Depletion for Transport Planning in South Africa Jeremy Wakeford Research Director Association for the Study of Peak Oil SA South African Cities Network Sustainable Public Transport Seminar 15 August 2008

2 Outline Introduction Global oil depletion Alternative transport fuels for SA Implications for SA transport & planning Conclusions

Introduction Transport planning traditionally rests on demand projections This assumes cheap & plentiful fuel (oil) Evidence suggests global oil production might peak & decline within a few years Business-as-usual will no longer be feasible 3

4 A World ‘Addicted to Oil’ Oil provides: –35% of total energy supply –95% of transport fuels –inputs for industrial agriculture –petrochemical feedstock Demand is surging in China & India

Source: International Energy Agency 5

6 40 yrs Source: ASPO Ireland

Oil Production in Europe 7 Source: Energy Watch Group (2007)

Source: ASPO Ireland8

Oil Producers Past Peak 9 Source: Energy Watch Group (2007)

World Oil Production Forecast 10 Source: Energy Watch Group (2007)

World Oil Production 11

World Liquid Fuels Supply 12

Peak Oil Exports Consumption growing in leading exporters World oil exports set to decline soon 13

Alternative Energy Sources Unconventional oil has low net energy Coal is polluting & may peak by 2025 Natural gas supplies are already very tight Biofuels threaten food & water security Nuclear electricity is limited & risky –uranium may peak by 2020 Renewables produce electricity All viable alternatives require time & money to be scaled up 14

15 Alternative Technology Replacement of current inefficient vehicles will take many years and $ billions Costs of new infrastructure are soaring Fuel prices will have to rise high enough to destroy demand

16 Hirsch Report to US DoE (2005) “ The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, 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.”

Source: IMF17

18 Likely Consequences Supply/demand crunch  Rising oil price & volatility  Fuel shortages  Rising inflation & interest rates  Recession & growing unemployment  Food insecurity & social instability  Financial crash?  Resource wars?

Oil Dependence in SA Petroleum = 97% of transport fuels –± 63% imported –± 30% Sasol (coal-to-liquids) –± 7% PetroSA (crude & gas-to-liquids) Transport heavily dependent on roads –80% of freight –95% of motorised passengers 19

Domestic Fuel Supply Options Sasol might expand CTL to 50% of SA’s fuel needs by 2014 PetroSA’s gas reserves are rapidly depleting Even if there are new off-shore oil & gas fields, they will take 7-10 years to deliver Biofuel target is 2% of liquid fuels by 2013 Electricity supply is already constrained Hydrogen is a net energy loser 20

Likely Impacts Further rising fuel prices Fuel shortages within a few years Rising costs of new infrastructure & road maintenance Falling demand for new road vehicles Reduced traffic congestion & pollution 21

22 Source: SAPIA

23 Source: SARB

24

Implications for Transport End of ‘mass’ air travel Decline in private car use Wealthier will switch to hybrids, electric & compressed air cars; electric bikes Growing demand for public transport Non-motorised options more popular Changing land use patterns –urban densification 25

Fewer of these... 26

... more of these... 27

...and perhaps even: 28

Transport Vulnerabilities High dependence on imported fuels & road transport Inadequate public transport Aged railways & rolling stock Geographic distances, stranded townships & suburban sprawl Poverty & unemployment Taxi industry a potential flashpoint 29

Opportunities AsgiSA infrastructure programme Transnet capex programme 2010 World Cup funds NATMAP New niches to exploit –electric vehicles –renewable energy 30

Principles for Transport Planning Sustainability Energy independence Improve efficiency & conserve Prioritise fuel use –food production & distribution –essential services Promote public awareness & cooperation Manage taxi industry carefully 31

Transport Energy Efficiency 32 Source:

33 Transport Policies Reduce road speed limits Mandate higher vehicle fuel efficiency Improve traffic management Expand public transport –enhance safety & security Promote non-motorised transport –cycle lanes, pedestrian walkways, safety Ration liquid fuels

34 Conclusions Peak oil is inevitable & imminent Energy supply constraints & higher fuel prices will drive transport options –on both supply & demand sides The sooner we prepare, the better we’ll manage the transition

35 Thank you.