1. 1 The Peak Oil Debate Will global oil production start its final decline soon, or not? What might it mean for public transport? Bruce Robinson Convenor, ASPO-Australia 1st May 2007 PTA

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 might it mean for public transport in Perth lots! Should transport planners be considering Petrol Droughts and Peak Oil YES! 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 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

6. 6 Mb/d US oil production: Peak in 1970 2007 Jeremy Gilbert, ex BP www.PeakOil.net

7. 7 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 2007 Past World Oil Production and Forecasts Prof. Bauquis France Dr Ali Samsam Bakhtiari Iran Chris Skrebowski UK Prof. Aleklett, ASPO Sweden

8. 8 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

9. 9 Alaskan North Slope Production Reserves grow -- Production falls Prudhoe Bay, Alaska

10. 10 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.’

11. 11 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

12. 12 The real oil discovery trend Longwell, 2002

13. 13 1995-2025 Discovery Forecast USGS The real oil discovery trend Longwell, 2002

14. 14 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

15. 15 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

16. 16 The top five decliners in 2005 1970

17. 17 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

18. 18 Global liquids capacity to 2015

19. 19 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

20. 20 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" ??

21. 21 ABARE oil price forecasts US$/bbl 2002 for 2004 $26 2004 for 2005 $32 2004 for 2005 $37.95 – 4.8% ABARE US$39 in 2011 NYMEX US$67 in 2011 now US$68.87 (30th April 2007) ABARE 2005 US$35 in 2006

22. 22 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

23. 23 Perth’s Central Park building is 249 m high, to top of tower Australia uses 45,000,000,000 litres of oil each year a cube of about 360 metres size 100 ml of oil contains 1 kWh of energy. Enough to move a small car to the top of the Eiffel tower 80% of Australia’s oil usage is in transport If Australia’s 20 M tpa wheat crop → ethanol = 9% =1.3 EfT 3

24. 24 Australia China United States 1 km l l Million barrels/ day 2005 BP Statistical Review, 2006 Australia uses 0.9 China7.0 US20.6 World82.5 US 1 cubic km oil / year

25. 25 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%

26. 26 1000 Barrel/day UK Consumption Export/Import Quelle: BP Analyse: LBST, ß Production decline rate ~ 10% UK will be a net importer by 2007

27. 27 1000 Barrel/day Indonesia Consumption Export Quelle: BP 2003; Analyse: LBST, ß

28. 28 1000 Barrel/day China Consumption Imports Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi 2020 Production

29. 29 Oil available for export

30. 30 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 et al., 2005 Delay / Rapid growth. Roughly 35 MM bpd at year 20. 2005 Study

31. 31 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

32. 32 Mortgage and Oil Vulnerability in Perth

33. 33 VAMPIRE Oil vulnerability and mortgage rate risk VIPER Oil vulnerability and socioeconomic factors

34. 34 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

35. 35 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 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.

36. 36 Petrol taxes OECD IEA Dec 2003 Portugal UK Australia US € 0.80 0.60 0.00 0.20 0.40 Au$ cents/litre

37. 37 The UK Fuel Tax Escalator Margaret Thatcher Australian fuel taxes should be raised to European levels on a fuel tax escalator 1988 1990 1992 1994 1996 1998 Nominal tax per litre (pence) Real tax 10 30 50 40 20 0 pence

38. 38 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 Japan Australia (x 5) UK 0 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

39. 39 Priorities First: Community awareness and engagement 2: Frugality 3: Efficiency Last: Alternative fuels 優先順位 社会全体の認 識と関与 質素な生活, つつましい手段 効率的な生活, 燃費向上 代替燃料 www.ASPO-Australia.org.au Bruce.Robinson@ASPO-Australia.org.au 61-8-9384 7409 Failure to act now will prove incredibly costly 今行動しなければ天文学的な出費を生む オーストラリア石油・天然ガスピーク研究会

40. 40 Perth Sydney

41. 41 Urban passenger mode shares Australia Potterton BTRE 2003 High automobile-dependence Public transport share is very low Car

42. 42

43. 43 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) 9422 5200 Fax: (08) 9422 5244 January 2003

44. 44 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 { If 25% of car users change to public transport

45. 45 www.ASPO-Australia.org.Au Bicycles are powered by biomass, renewable energy, either Weetbix or abdominal fat No shortage of either

46. 46 a few more slides follow, in case they are needed for questions

47. 47

48. 48 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, found in 1948 If it is at peak, then global peak is probably very close

49. 49

50. 50 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.

51. 51 } Oil www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004 Gboe/pa World All Oil 2007

52. 52 } Gas } Oil Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl) www.PeakOil.net ASPO 2004 2007

53. 53 } 2007 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

54. 54 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

55. 55

56. 56 China US Australia