1. 1 Peak Oil A valuable lever for bicycle advocacy Bruce Robinson Convenor, ASPO-Australia 7 th February 2007

2. 2 www.ASPO-Australia.org.au 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. 3 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 ? perhaps 2010-2015 What mitigation and adaptation strategies are practical? How can we use Peak Oil to enhance the case for bicycle transport? 1930 1970 2010 2050 Peak Oil but when?

4. 4 Many books about Peak Oil Campbell & Laherrère March 1998 Campbell 2003 Brian Fleay Perth 1995 Deffeyes 2001 Heinberg 2003 Roberts 2004 2005 2006

5. 5 Running on empty August 27, 2006 You're about to hear two of the scariest words in the English language — "peak oil". The point where oil production reaches its absolute peak; the point when supplies start running out. 31/8/06 WA Planning and Infrastructure Minister Alannah MacTiernan said that major Federal investment in public transport was vital if Australia was to avoid major disruption as global petroleum production reached its peak. Four Corners Peak Oil? 10/07/2006 Dr Brian Fisher of ABARE was positively jovial. If the price of eggs is high enough, even the roosters will start to lay. Oil production limit reached: expert ABC News July 10, 2006. 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. 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 Sept 11 2006 The world has an abundant supply of oil, ExxonMobil Australia chairman Mark Nolan said today. He debunked the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.

6. 6 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 Eric Streitberg Executive Director ARC Energy Limited Australian Petroleum Production & Exploration Association conference APPEA April 2005 Perth 1/3 rd

7. 7 Mb/d US oil production: Peak in 1970 2002 Jeremy Gilbert, ex BP www.PeakOil.net

8. 8 1 1 1 1 1 1 1 1 1 1 1 1 1 24681012 1 24681012 0 1 0 2 0 3 0 4 0 0 1 0 2 0 3 0 4 0 40 10 30 20 0 1930 1970 2010 2050 IEA Shell Bauquis, Total Deffeyes ASPO & Skrebowski Gb pa 0 2005 Past World Oil Production and Forecasts Prof. Bauquis France Dr Ali Samsam Bakhtiari Iran Chris Skrebowski UK Prof. Aleklett, ASPO Sweden

9. 9 Chris Skrebowski Editor, Petroleum Review, London The practical realities The world needs oil production flows Consumers need delivery flows Reserves are only useful as flows Worry about flows not reserves "40 years reserves left at current production rates"....This is a very misleading statement

10. 10 Alaskan North Slope Production Reserves grow -- Production falls Prudhoe Bay, Alaska

11. 11 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.’

12. 12 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 We are short of people and equipment Oilfield inflation is soaring

13. 13 The real oil discovery trend Longwell, 2002

14. 14 1995-2025 Discovery Forecast USGS The real oil discovery trend Longwell, 2002

15. 15 Oil production flows -- all new flows take two to twenty-five years Current supply 84mn b/d or 30bn b/y Global new field discovery (7-10bn b/y) Tar sands and Heavy oil Biofuels + others Known oil reserves in production (90%) NIP 10% Yet-to-find probable Yet-to-find possible 2 to 25 years EOR

16. 16 How old are the fields? Of the 18 largest fields, 12 are in decline, 5 have some potential and 1 is undeveloped The 120 largest fields give 50% of total 70% of production from fields 30+ years old Few large recent discoveries Relying more and more on ageing fields and new small discoveries

17. 17 What are the BP statistics saying? OECD production peaked in 1997 and has now declined by just under 2 million b/d (8.8%) Non-Opec, non-FSU production peaked 2002 North America/Mexico peaked in 1997 North Sea - UK/Norway/Denmark peaked in 2000 now declined by 1.2 million b/d (19.2%) Around 25 significant producers in decline About 28% of global production from decliners

18. 18 The UKCS depletion reality -- production down to 1mn b/d by 2010 UK North Sea

19. 19 North Sea production by field Forties monthly production to date

20. 20 The top five decliners in 2005 1970

21. 21 How the Megaprojects database is created and used All publicly available data 2006-2012 148 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 Megaprojects Report, Petroleum Review April 2006

22. 22 Global liquids capacity to 2015

23. 23 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 92-94 million barrels/day Oil supply in international trade may peak earlier than the oil production peak Collectively we are still in denial WE HAVE JUST 1,500 DAYS TO PEAK

24. 24 ABARE forecasts ASPO Random number generator "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" ??

25. 25 1965 20252005 1985 1.0 0.0 0.2 0.4 0.6 0.8 Geoscience Australia, APPEA, ABARE Australia’s oil production and consumption 1965-2030 Million barrels/day Actual Forecast Consumption Production P50

26. 26 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 3 100 ml of oil contains 1 kWh of energy. Enough to move a small car to the top of the Eiffel tower

27. 27 Million barrels/ day 2005 BP Statistical Review, 2006 Australia uses 0.9 China7.0 US20.6 World82.5 US 1 cubic km oil / year Australia China United States 1 km l l

28. 28 Energyfiles Ltd E NERGY F ILES E NERGY F ILES www.energyfiles.com Oil production is not shared equitably US: 5% of world's population uses 25% of world oil China: 21% 8%

29. 29 1000 Barrel/day UK Consumption Export/Import Quelle: BP Analyse: LBST, ß Production decline rate ~ 10% UK will be a net importer by 2007

30. 30 1000 Barrel/day Indonesia Consumption Export Quelle: BP 2003; Analyse: LBST, ß

31. 31 1000 Barrel/day China Consumption Imports Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi 2020 Production

32. 32 Common Myth Leonardo Maugeri 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 ”. Biomass Walking, horses, horse & cart, horse-drawn barge Coal Trains Oil ( & gas) Cars, trucks, trains, planes ?? Is there anything else better than oil & gas ?? or even as good ? Thermodynamics? Theology? Economist Ultra-optimist 15 th December 2003

33. 33 Richard Miller BP Exploration Operating Co. Ltd. Middlesex, UK …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… Realist ?, Pessimist ? 12 th January 2004

34. 34 0 5 10 15 5 0 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 DOE NETL Hirsch, Bezdek and Wendling, 2005 Delay / Rapid growth. Roughly 35 MM bpd at year 20. 2005 Study

35. 35

36. 36 } 2005 World oil shortfall scenarios Past Production of Oil Forecast Production Demand Trend Gb/year 0 10 20 30 40 50 Shortfall By 2030, the gap is equivalent to 6,000 nuclear reactors 2030

37. 37 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

38. 38 December 2005 July 2006

39. 39 VIPER Oil vulnerability and socioeconomic factors

40. 40 VAMPIRE Oil vulnerability and mortgage rate risk

41. 41 We must acknowledge oil depletion All of us: industry, governments community, media, academia... We must not let the opportunities slip away Many of the policy options to reduce fuel usage will also lead to economic opportunities and healthier and happier communities. We are very well placed globally  Long, growing awareness of oil depletion, (Senate report)  World-leading demand management skills TravelSmart and water conservation  Considerable uncommitted gas reserves  lots of bicycles and bicycle advocates Failure to act now will prove incredibly costly 1: Oil vulnerability risk assessment and management 2: Check your superannuation is not being invested into urban toll-roads, tunnels and airports. www.ASPO-Australia.org.au

42. 42 www.ASPO-Australia.org.Au Bicycles are powered by biomass, renewable energy, either Weetbix or abdominal fat No shortage of either

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

44. 44 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 2005

45. 45 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.

46. 46 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.

47. 47 } Oil www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004 Gboe/pa World All Oil 2005

48. 48 } Gas } Oil Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl) 2005 www.PeakOil.net ASPO 2004

49. 49 China US Australia

50. 50 E NERGY F ILES E NERGY F ILESwww.energyfiles.com

51. 51 Australian Parliament, Senate Rural and Regional Affairs and Transport References Committee Inquiry into Australia's future oil supply and alternative transport fuels 194 submissions Interim report "Peak between now and 2030" September 2006

52. 52 We must acknowledge oil depletion All of us: industry, governments community, media, academia... We must not let the opportunities slip away Many of the policy options to reduce fuel usage will also lead to economic opportunities and healthier and happier communities. We are very well placed globally  Long, growing awareness of oil depletion, but no reliable information from Federal Govt, only ABARE, BTRE  World-leading demand management skills TravelSmart and water conservation  Considerable uncommitted gas reserves Failure to act now will prove incredibly costly Govts should set up "Office of Oil Vulnerability" "Oil vulnerability risk assessment and management" www.ASPO-Australia.org.au

53. 53 This is the real new capacity to 2012 (Peak in first quarter of 2011)

54. 54 Running on empty August 27, 2006 You're about to hear two of the scariest words in the English language — "peak oil". The point where oil production reaches its absolute peak; the point when supplies start running out. 31/8/06 WA Planning and Infrastructure Minister Alannah MacTiernan said that major Federal investment in public transport was vital if Australia was to avoid major disruption as global petroleum production reached its peak. Four Corners Peak Oil? 10/07/2006 Dr Brian Fisher of ABARE was positively jovial. If the price of eggs is high enough, even the roosters will start to lay. Oil production limit reached: expert ABC News July 10, 2006. 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. 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 Sept 11 2006 The world has an abundant supply of oil, ExxonMobil Australia chairman Mark Nolan said today. He debunked the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.

55. 55 Probably yes. As the Senate report shows, the "no-worries" camp are remarkably short on reliable future production data and remarkably long on hope. What should we do.? Governments and businesses should each set up an "Office of Oil Vulnerability" to help people plan for the probability of Peak Oil. There are many options useful for mitigation and adaptation. No "Silver Bullet", but "silver buckshot" Oil vulnerability risk assessment and 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. www.ASPO-Australia.org.au The Peak Oil Debate Will global oil production start its final decline soon, or not? E NERGY F ILES E NERGY F ILESwww.energyfiles.com Bruce.Robinson@ASPO-Australia.org.au 08-9384-7409 0427 398 708 offshore onshore