1. Convenor, ASPO-Australia
Peak Oil
What are the probabilities that the rate of global oil production will start its final decline soon?
Bruce Robinson
Convenor, ASPO-Australia
10th August 2007
Curtin Corner

2. ASPO-Australia is part of the international ASPO movement
An Australia-wide network of professionals working to reduce oil vulnerability
ASPO-Australia 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
Behavioural change
Local Government sector
Regional and city working groups
Construction Industry
Freight sector
Public transport sector
Defence and Security
Economics
Tourism
Young Professionals working group 
 Senate inquiry submission
ASPO-Australia is part of
the international ASPO movement
Senate Inquiry into Australia's future oil supply and alternative transport fuels

3. Outline 1930 1970 2010 2050 Peak Oil What is Peak Oil ? but
the time when global oil production
stops rising and starts its final decline
We will never "run out of oil"
Is "Peak Oil" a fallacy, a theory, a probability, or an inevitability? inevitable
When is the most probable forecast date ? perhaps
Will market forces solve our Peak Oil problems ? no, sorry!
Should Governments, universities, businesses and communities
be preparing for Petrol Droughts and Peak Oil ? yes!
1930
1970
2010
2050
Peak Oil
but
when?

4. Fremantle Passenger Terminal
Unexpected transport pattern changes
and infrastructure provision decisions
Fremantle Passenger Terminal
completed 1962

5. Unexpected transport pattern changes, and infrastructure
Passengers p.a. Fremantle Port
Fremantle Passenger Terminal
opened
Unexpected transport pattern changes, and infrastructure
World Air travel

7. Many books about Peak Oil
Campbell &
Laherrère March 1998
Campbell 2003
Brian Fleay
Perth
1995
Deffeyes
2001
Heinberg 2003
Roberts 2004
2005
2006

8. 1/3rd 1/3rd 1/3rd APPEA April 2005 Perth
Australian Petroleum Production & Exploration Association conference
Please put your hand up if you think that we have crossed the Hubbert Peak and we are entering a demand driven pricing era,
and hands up those who don’t?
Undecided
1/3rd
1/3rd
Eric Streitberg
Executive Director
ARC Energy Limited
1/3rd

9. US oil production: Peak in 1970
Mb/d
US oil production: Peak in 1970
2007
Jeremy Gilbert, ex BP

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

12. The world needs oil production flows Reserves are only useful as flows
Chris Skrebowski Editor, Petroleum Review, London The practical realities
The world needs oil production flows
Reserves are only useful as flows
Worry about flows not reserves
"Deliverability" (Les Magoon, USGS)
When you take your car to a filling station you expect to simply fill up
You’d be very alarmed if you were told to put the nozzle in the tank and come back 6 hours later
You’d be even more alarmed if you were told to come back in a week and they might have supplies
If there aren’t reliable flows you go somewhere else
What if there’s no somewhere else?
"40 years reserves left at current production rates"
....This is a very misleading statement

13. 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.’
It is like a scales. Although we will still be finding oil, still developing new fields if just slightly more of the world’s production capacity -- maybe just 51% -- is declining. Then production will have peaked. This is why it will be far earlier than most people expect.

14. Why are oil supplies peaking?
We are not finding oil fast enough
We are not developing fields fast enough
Too many fields are old and declining
A pretty comprehensive set of shortfalls.

15. Blue is water, green is water and oil mixed
and red/purple is “dry” oil with little water in it
Ghawar is Saudi Arabia's and the world's biggest oilfield
If it is at peak, then global peak is probably very close

16. The real oil discovery trend
Longwell, 2002

17. The real oil discovery trend
Discovery Forecast USGS
The real oil discovery trend
Longwell, 2002

18. How old are the fields?
Of the 18 largest fields, 12 are in decline, 5 have some potential and 1 is undeveloped
70% of production from fields 30+ years old
Few large recent discoveries
Relying more and more on ageing fields and new small discoveries
Ghawar, Burgan, Canterell and Daqing are the four largest oil fields in the world. All are now in decline. By global standards most of the new developments are tiddlers. You need a lot of tiddlers to offset declining giants.

19. The top five decliners in 2005
1970
US boosted by Gulf of Mexico but capacity has been permanently lost. That may not be conventional capacity loss to depletion but it is still capacity loss.
Norway has moved off the slow decline shoulder to the ski slope
Mexico is worrying 60% of production comes from Canterell. The IEA hopes Pemex will get enough money to restrict the decline to 10%/year!!!!
Iran is struggling. Is improvement likely?

20. How the Megaprojects database is created and used
Megaprojects Report, Petroleum Review April 2006
All publicly available data
Opec and 70 non-Opec projects
Opec data (from their website)
Incremental production allocated by start up date
Graphed to show volumes available to meet demand
Have been doing it now for over three years. Constantly revised month by month. Increasingly the changes are project slippage.
Last big changes when Opec published future projects.
Few new non-Opec projects.
Listing of all key discoveries likely to be projects.
Future projections now pretty stable.
Average 6.4 years from discovery to first oil even excluding all projects involving discoveries more than 12 years ago

21. Global liquids capacity to 2015

22. Chris Skrebowski's conclusions
Supply will remain tight and prices high barring a major economic setback
Oil supply will peak in 2010/2011 at around million barrels/day
Oil supply in international trade may peak earlier
Collectively we are still in denial
Greatly to my surprise the new Medium Term outlook confirms my analysis. Output reaches 93mn b/d in Demand reaches 93.7mn b/d. No mention of peak of course but ‘Increments slow to kb/d after 2008’ they mean 2009 because of the way they do things but my analysis is becoming less controversial by the day.

23. UK Consumption Export/Import Production decline rate ~ 10%
1000 Barrel/day UK
Consumption
Export/Import
Quelle: BP Analyse: LBST, ß
Production decline rate ~ 10%
UK already a net importer

24. Indonesia Consumption Export 1000 Barrel/day
Quelle: BP; Analyse: LBST, ß

25. China Consumption Production Imports 1000 Barrel/day 2020
Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi
2020
Production

26. Oil available for export

27. "Forecasters' Droop" ?? ABARE forecasts
"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
"Forecasters' Droop" ??

28. New York Metals Exchange NYMEX WTI futures $US/bbl
ABARE
US$39
in 2011
NYMEX
US$67
now US$70
(10th August 2007)
2005
US$35
in 2006
ABARE oil price forecasts
US$/bbl
2002 for $26
2004 for $32
2004 for 2005 $ – 4.8%
New York Metals Exchange
Oil Futures Prices
10th August 2007
ABARE: 25th June 2007
"In the second half of 2007,
oil prices are forecast
to average U$63 a barrel"
NYMEX WTI futures $US/bbl
10th April 2006

29. Australia’s oil production and consumption
1965
2025
2005
1985
1.0
0.0
0.2
0.4
0.6
0.8
Geoscience Australia, APPEA, ABARE
Australia’s oil production and consumption
Million barrels/day
Actual Forecast
Consumption
Production
P50

30. Australia uses 45,000,000,000 litres of oil each year
a cube of about 360 metres size
80% of Australia’s oil usage is in transport
If Australia’s 20 M tpa wheat crop → ethanol = 9%
=1.3
EfT3
Perth’s Central Park building is 249 m high,
to top of tower
100 ml of oil contains 1 kWh of energy.
Enough to move a small car to the top of the Eiffel tower

31. China Million barrels/ day 2005 Australia uses 0.9 China 7.0 US 20.6
United States
1 km l
Million barrels/ day 2005
BP Statistical Review, 2006
Australia uses 0.9
China 7.0 US
World
US 1 cubic km oil / year

32. Oil production is not shared equitably
ENERGYFILES
Energyfiles Ltd
Oil production is not shared equitably
US: % of world's population uses 25% of world oil
China: 21% %

34. "Federal agency efforts that could reduce uncertainty about the timing of peak oil production or mitigate its consequences are spread across multiple agencies and are generally not focused explicitly on peak oil.
....there is no coordinated federal strategy for reducing uncertainty about the peak’s timing or mitigating its consequences".

35. PEAKING OF WORLD OIL PRODUCTION:
IMPACTS, MITIGATION, & RISK MANAGEMENT
Robert L. Hirsch, Roger Bezdek & Robert Wendling
February 2005
for US Dept of Energy
"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."
"The world has never faced a problem like this.
.. oil peaking will be abrupt and revolutionary".

36. Years After Crash Program Initiation Hirsch, Bezdek and Wendling, 20055 10 15 25
Years After Crash Program Initiation
Impact
(MM bpd) 20 35
EOR
Coal Liquids
Heavy Oil
GTL
Efficient Vehicles
Worldwide Crash Program Mitigation of Conventional Oil Production Peaking
A Study for US DOE NETL
Hirsch, Bezdek and Wendling, 2005
Delay / Rapid growth.
Roughly 35 MM bpd at year 20.
2005 Study

37. Dr Roger Bezdek is a senior energy economist in Washington
On his recent Australian tour for ASPO he briefed ministers for Transport and ministers for Energy in Victoria and Queensland, prominent multinational firms, nationwide TV, the Defence Department, the Federal Shadow Minister for Resources and Energy and had a number of meetings at Queensland Transport
3. HIGHER PRICES WILL CREATE MORE OIL?
Not true
“Economists are better at finding oil on paper than geologists are at finding it in the ground”
7. GOVERNMENT INTERVENTION NOT REQUIRED?
Wrong: Intervention by governments will be required
Economic and social implications of oil peaking would otherwise be chaotic
Full presentation slides and video at

38. 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

39. Scenario
Wait for peaking
Start 10 years early
Start 20 years early
Result
Oil shortages largest, longest lasting
Delays peaking; still shortages
Avoids the problem; smooth transition
SCENARIOS ANALYSIS CONCLUSIONS Basis: Immediate crash program implementation
No quick fix!

40. Is there a possible transition to another fuel?.
Probably not.
Can we run ALL our cars on water, hydrogen, ethanol, GTL ??
No.
EROEI (Energy return on energy invested)
Very important
Les Magoon,
USGS 2001

41. Mortgage and Oil Vulnerability
in Perth

42. First: Community awareness and engagement 2: Frugality 3: Efficiency
Priorities
First: Community awareness
and engagement
2: Frugality
3: Efficiency
Last: Alternative fuels
Failure to act now will prove incredibly costly
Oil vulnerability assessment and risk management is an important mechanism of minimising exposure and maximising opportunities.
It is a new and promising field.
Hint: Check your superannuation is not being invested
into urban toll-roads, tunnels and airports.

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

44. 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.

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

46. Nominal tax per litre (pence)
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 10 30 50 40 20
pence

47. Gboe/pa World All Oil }
Oil
2007
ASPO 2006

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

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

50. 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,
probably no replacement ever for cheap plentiful oil
Urgent preparation and adjustment are vital
2007

51. BP Statistical Review of World Energy, 2006
Oil Consumption
million barrels/day UK
Australia
(x 5)
Japan
M bbl/d
BP Statistical Review of World Energy, 2006
UK Fuel Tax Escalator
started
石油消費 （単位100万バレル／日） 英国 日本
オーストラリア
（5倍に誇張）
英国でのガソリン税課税強化開始

52. either Weetbix or abdominal fat
Bicycles are powered
by biofuel,
renewable energy,
either Weetbix or abdominal fat
No shortage of either

53. Perth
Sydney

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

56. STATE LIQUID FUEL SHORTAGE
Government of Western Australia
STATE LIQUID FUEL SHORTAGE
EMERGENCY PLAN
OPERATIONAL PLAN
PREPARED BY
ENERGY SAFETY DIRECTORATE
DEPARTMENT OF CONSUMER
AND EMPLOYMENT PROTECTION
20 Southport Street, W Leederville WA 6007
Tel: (08) Fax: (08)
January 2003

57. change to public transport{
If 25% of car users
change to public transport
We need both petrol rationing plans and public transport rationing plans in place in case of fuel emergencies.
Bicycle transport is one substantial opportunity for public transport load-shedding in the event of a liquid fuel emergency.
PTA must have more input into Liquid Fuel Shortage planning

58. Australian Association for the Study of Peak Oil & Gas
An urgent challenge
for sustainability
Bruce Robinson
Australian Association for the Study of Peak Oil & Gas
6th February 2006
? ? ? ? ?
Look Out !!
Something serious
is looming on the radar

59. Hurricane Katrina New Orleans
Govts warn of general hurricane risks,
forecast, and track individual hurricanes
Govts help: longterm; planning, standards,
short-term; preparations & consequences
They do not attempt to prevent hurricanes
Peak Oil is a natural phenomenon too.
Should we reduce fuel taxes? or strengthen the levees?

62. 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.

63. 1 2 4 6 8 10 12 3 Past Oil Production and Forecasts Australia World3 40 30 20
1930
1970
2010
2050
IEA
Shell
Bauquis
Deffeyes
ASPO
World
ASPO and others Gb pa
Samsam Bakhtiari
Demand
Australia
Geoscience Australia
2007
Past Oil Production
and Forecasts
Total
Bass Strait

64. China US
Australia