1. 1 Peak Oil: Impacts on MDGs and options for Australia Bruce Robinson Convenor 15th March 2008

2. 2 www.ASPO-Australia.org.au An Australia-wide network of professionals working to reduce oil vulnerability 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 Regional and city working groups Construction Industry Public transport sector Defence and Security Economics Tourism Children and Peak Oil Young Professionals working group

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 ? ? 2012 +/- 5 years "Peak Exports" is even more important, and sooner ● Peak Oil will impact very dramatically on the MDGs, unless the developed world reduces its consumption to leave enough for developing countries. ● Options for Australia and Australians 1930 1970 2010 2050 Peak Oil but when?

4. 4 US oil peak 1970

5. 5 "A MIDDLE EAST VIEW OF THE GLOBAL OIL SITUATION" A.M. Samsam Bakhtiari National Iranian Oil Company May 2002 Global oil crunch at the horizon --- most probably within the present decade. "...It would take a number of miracles to thwart such a rational scenario.. A series of simultaneous miracles is not possible --for there are limits even to God Almighty's mercifulness". “Noah built his ark before it started raining” www.isv.uu.se/iwood2002

6. 6 Dr. Sadad I. Al Husseini, ex Saudi Aramco Oil and Money Conference, London, October 30, 2007...predicts a 10 year plateau a structural ceiling determined by geology 100 90 70 80 Production M b/day Price $/barrel

7. 7 Monday October 22 2007 Fig. 7 Oil production world summary 20082015 MDG target

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9. 9 Chris Skrebowski Editor, Petroleum Review, London The practical realities Worry about flows not reserves "Deliverability" “It isn't the size of the tank; it’s the size of the tap” (ASPO-USA)

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 The real oil discovery trend Longwell, 2002

12. 12 Jeff Rubin September 2007 Canadian Imperial Banking Corporation Iran 10 c /litre Venezuela 2 c /l

13. 13 from Oilwatch Monthly: ASPO-Netherlands Rembrandt Koppelaar World Liquids Exports estimate to November 2007 “Peak Exports” occurs before “Peak Oil” forecast Rubin 2007

14. 14 Please put your hand up if you think that we have crossed the Hubbert Peak 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

15. 15 80% of Australia’s oil usage is in transport If Australia’s 20 M tpa wheat crop → ethanol = 10% Australia uses 51,000 megalitres of oil each year a 370m cube Sydney Harbour Bridge is 134 m high 100 ml of oil contains 1 kWh of energy. Enough to move a small car to the top of the Eiffel tower

16. 16 Australia China United States 1 km l l Million barrels/ day 2006 BP Statistical Review, 2007 Australia uses 0.9 China7.4 US20.6 World83.7 US 1 cubic km oil / year

17. 17 Actual Forecast Australia } $12.5 billion 2006/07 P50 Consumption Production

18. 18 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 US DOE NETL Hirsch, Bezdek and Wendling, 2005 Delay / Rapid growth. Roughly 35 MM bpd at year 20. 2005 Study

19. 19 Time Cost of Error COST AS A FUNCTION OF START TIME (Notional) Premature Start Peaking Scenario I - 10 Years Scenario II - 20 Years Scenario III “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

20. 20 www.aspo-australia.org.au/content/view/120/55/ VAMPIRE Oil vulnerability and mortgage rate risk Sydney Dodson & Sipe, Griffith University, 2006

21. 21 2007 } Oil Gboe/pa World All Oil www.PeakOil.net ASPO 2006

22. 22 ABARE's oil price forecasts have proven to be systematically low Economists' forecasts published Nov 2005 Prof Tony Owen, UNSW, now at Curtin$35/barrel in a couple of years Nobel Economics winner, Vernon Smith (at UNSW) $15/barrel in the near future

23. 23 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.

24. 24 Peak Oil will impact very dramatically on the MDGs, as well as on Australia The developed world must reduce its consumption to leave enough for developing countries "Live simply, so others may simply live" Energyfiles Ltd Available oil is not shared equitably US: 4% of world's population uses 25% of world oil China: 21% of world population uses 8% of world oil Australia's per capita oil use is 70 times that of Bangladesh There is a car-population explosion underway, especially outside the OECD.

25. 25 Priorities 1: Awareness and engagement 2: Frugality 3: Efficiency Last: Alternative fuels Bruce.Robinson@ASPO-Australia.org.au 0427 398 708 61-8-9384-7409 Failure to act now will prove incredibly costly, both to us, and especially to the MDGs Ecological footprints www.ASPO-Australia.org.au Hint: Check your superannuation is not being invested into urban toll-roads, tunnels and airports.

26. 26 a few more slides follow, in case they are needed for questions

27. 27 Petrol taxes OECD IEA Dec 2003 Portugal UK Australia US € 0.80 0.60 0.00 0.20 0.40 Au$ cents/litre

28. 28 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

29. 29 China US Australia

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31. 31 www.ASPO-Australia.org.Au Bicycles are powered by biofuel, renewable energy, either Weetbix or abdominal fat No shortage of either

32. 32 Peak Oil: Impacts on MDGs and options for Australia Bruce Robinson Convenor 15th March 2008 ? ? Look out !! Something serious is looming on the radar

33. 33 Hurricane Katrina New Orleans US Federal, State and local Governments were shown to be shortsighted, ill-prepared, uncaring and disorganised. Australian governments are much less organised for Peak Oil

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37. 37 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

38. 38 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

39. 39 2007 } Oil Gboe/pa World All Oil www.PeakOil.net ASPO 2006

40. 40 2007 } Oil } Gas Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl) www.PeakOil.net ASPO 2006

41. 41 } 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

42. 42 Urban passenger mode shares Australia Potterton BTRE 2003 High automobile-dependence Public transport share is very low Car

43. 43 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.

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45. 45 Why are oil supplies peaking? Too many fields are old and declining 54 of 65 oil producing countries are in decline! Oil supply will peak in 2010/2011 at around 92-94 million barrels/day Oil supply in international trade may peak earlier Collectively we are still in denial

46. 46 Global liquids capacity to 2015

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48. 48 Prof. Aleklett, ASPO Sweden

49. 49 Lord Ron Oxburgh Former Chairman, Shell UK Chairman, House of Lords Select Committee on Science and Technology Honorary Professor, Cambridge University Fellow of the Royal Society

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