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How Peak Oil Could Impact Transport Planning
1. Peak Oil
Will the rate of global oil production start to
decline soon?
And what might this mean for WA transport
planning? Transport Panel
27th March 2008
Bruce Robinson, Convenor
Look out !!
Something serious
is looming on the radar
??? ?
1
2. 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
2
3. 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
4. Outline Peak Oil
What is Peak Oil ? but
the time when global oil production when?
stops rising and starts its final decline
We will never "run out of oil"
1930 1970 2010 2050
● 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 transport
● Options for Australia and Australians
4
12. World Oil Production
and Forecasts 2012 +/- 5 years ?
IEA 2002
Dr Ali Samsam Bakhtiari
4
40 Iran
Shell Prof. Bauquis
France
0
3
30 Deffeyes
Bauquis, Total
Gb pa 0
2
20
ASPO & Skrebowski
0
1
10
0 2007
0
0
0
1930 1970 2010 2050
Zittel & Schindler, Oct 2007 Chris Skrebowski
Germany UK
Prof. Aleklett, ASPO
Sweden 12
13. "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
13
14. 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
Production
Price M b/day
$/barrel
100
90
80
70
14
15. 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 •1/3rd
Eric Streitberg •and hands up those who •1/3rd
Executive Director don’t?
ARC Energy Limited
•Undecided •1/3rd 15
17. 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)
17
18. 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.’
Expansion
Decline
18
23. Iran 10c/litre
Venezuela 2c/l
Jeff Rubin
September 2007
Canadian Imperial Banking
Corporation
23
24. World Liquids Exports estimate to December 2007
“Peak Exports” occurs before “Peak Oil”
forecast
Rubin 2007
from Oilwatch Monthly: ASPO-Netherlands
Rembrandt Koppelaar
24
25. Australia’s oil production and consumption
Actual Forecast
1.0
Million barrels/day
0.8
0.6
Consumption
} $12.5 billion
2006/07
0.4
P50
0.2
Production
0.0
1965 1975 1985 1995 2005 2015 2025
Geoscience Australia, APPEA, ABARE
25
26. Australia uses 51,000,000,000 litres of oil each year
a cube of about 370 metres size
80% of Australia’s oil usage is in transport
If Australia’s 20 M tpa wheat crop → ethanol = ~10%
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 26
27. Million barrels/ day 2006
BP Statistical Review, 2007
Australia uses 0.9
China 7.4 l 1 km l
US 20.6
World 83.7
US 1 cubic km oil / year
Australia China United States
27
28. "....there is no coordinated federal strategy for reducing
uncertainty about the peak’s timing or mitigating its
consequences".
28
29. 05
Peaking of World Oil Production
20 dy Impacts, Mitigation and Risk Management
Stu
for US DOE NETL
Hirsch, Bezdek and Wendling, 2005
"The peaking of world oil production presents the U.S. and the world
with an unprecedented risk management problem"
"The world has never faced a problem like this. .. oil peaking will be
abrupt and revolutionary".
35
EOR
25 Coal
Liquids
Impact
(MM bpd)
15 Heavy Oil
5 GTL
Efficient
0 Vehicles
0 5 10 15 20
Years After Crash Program Initiation 29
30. COST AS A FUNCTION OF START TIME
(Notional)
Cost of Premature
Error 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 - 10 Years Peaking
Scenario III Scenario II Scenario I
30
31. Les Magoon,
USGS 2001
Is there a possible transition to another fuel for most cars?.
Probably not
Can we swap to public transport for most trips?
No
Will an urgent change now in transport planning practices
help us? Yes, dramatically in the long term
31
33. Mortgage and Oil Vulnerability
in Perth
at www.aspo-australia.org.au/content/view/120/55/ 33
34. $10 PER LITRE PETROL: A SCENARIO
David Rice, Senior WA Transport Planner
But why $10/l?
Simple
memorable
an illustration of ‘expensive’
see www.aspo-australia.org.au
in "bibliography"
34
35. Analogy:
The Canberra fire-storms of
January 2003 destroyed over
400 houses; on the outer
edge of the outer suburbs
Reliable predictions had
been ignored by the
authorities,
and there was no effective
action to minimise the
risks
35
36. Perth
Oil shocks, like the 30 km
$10/litre scenario, may
well wipe out the entire
outer rows of suburbs
from Perth, with the same
results of destroyed
homes, broken dreams
and broken marriages.
36
37. Perth
Oil shocks, like the 30 km
$10/litre scenario, may
well wipe out the entire
outer rows of suburbs
from Perth, with the same
results of destroyed
homes, broken dreams
and broken marriages.
37
38. Perth
Oil shocks, like the 30 km
$10/litre scenario, may
well wipe out the entire
outer rows of suburbs
from Perth, with the same
results of destroyed
homes, broken dreams
and broken marriages.
38
39. Perth
Oil shocks, like the 30 km
$10/litre scenario, may
well wipe out the entire
outer rows of suburbs
from Perth, with the same
results of destroyed
homes, broken dreams
and broken marriages.
39
40. Perth
Oil shocks, like the 30 km
$10/litre scenario, may
well wipe out the entire
outer rows of suburbs
from Perth, with the same
results of destroyed
homes, broken dreams
and broken marriages.
40
46. Government of Western Australia
STATE LIQUID FUEL SHORTAGE
EMERGENCY PLAN
OPERATIONAL PLAN
PREPARED BY
ENERGY SAFETY DIRECTORATE
DEPARTMENT OF CONSUMER
AND EMPLOYMENT PROTECTION
20 Southport Street, W Leederville WA 6007
Tel: (08) 9422 5200 Fax: (08) 9422 5244
January 2003
46
47. PERTH TRAVEL SURVEY - 2003
100%
Mode Shares
Perth Mode Share (2003)
Walk only 10.6% 80%
Cycle
Public transport
1.6%
3.9% 60%
If 25% of car users
change to public transport
{
Car passenger 29.1%
40%
Car driver 53.2%
Other (taxi, motorbike,
20%
etc.) 1.5%
Total 100.0%
0%
Walk Bicycle Transit Car
We need both petrol rationing plans and
public transport rationing plans in place in
case of fuel emergencies.
There must be public transport input into
State and Federal fuel emergency planning.
47
48. ABARE's oil price forecasts have proven to be
systematically low
Actual price
120
100
WTI (US$/barrel)
March 2008
80 prediction
60 March 2007
prediction
40
March 2006
20 prediction
0 March 2005
prediction
30 9/2 1
30 9/2 2
30 9/2 3
30 9/2 4
30 9/2 5
30 9/2 6
30 9/2 7
30 9/2 8
30 9/2 9
9/ 0
11
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 00
/ 0 01
March 2004
20
30 9/2
prediction
/0
30
March 2003
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
48
49. 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.
49
50. www.ASPO-Australia.org.au
Priorities
First: Awareness and engagement
(including in transport planning circles)
Frugality
Efficiency
Last: Alternative fuels
Failure to act NOW will prove incredibly costly
Oil vulnerability assessment and risk
management is an important tool
The proposed Oil Vulnerability Research Network is
a timely opportunity. Suggestions invited
Hint: Check your superannuation is not being
invested into urban toll-roads, tunnels and airports
Bruce.Robinson@ASPO-Australia.org.au
0427 398 708 61-8-9384-7409
50
51. Bicycles are powered
by biofuel,
renewable energy,
either Weetbix or
abdominal fat
No shortage of either
www.ASPO-Australia.org.Au
51
52. No footpath or cyclepath on the bridge
WHY??
Roe Highway Bridge
Kwinana Freeway
52
53. Perth Train station
Shopping centre
Lack of bicycle transport
access. Atwell & Harvest Lakes
Landcorp, Main Roads Main Roads
cyclepath
The Harvest Lakes subdivision is close
to the Cockburn train station and the
shopping centre, but there is no
cyclepath on the eastern side of the
freeway.
Harvest Lakes
subdivision
53
54. We will need a deeper
oil vulnerability index
for Keralup than just
a dark red like
Rockingham
and Armadale
54
55. www.ASPO-Australia.org.au
Priorities
First: Awareness and engagement
(including in transport planning circles)
Frugality
Efficiency
Last: Alternative fuels
Failure to act NOW will prove incredibly costly
Oil vulnerability assessment and risk
management is an important tool
The proposed Oil Vulnerability Research Network is
a timely opportunity. Suggestions invited
Hint: Check your superannuation is not being
invested into urban toll-roads, tunnels and airports
Bruce.Robinson@ASPO-Australia.org.au
0427 398 708 61-8-9384-7409
55
56. a few more slides follow,
in case they are needed for questions
56
57. Petrol taxes OECD
Au$ UK €
Portugal 0.80
cents/litre
0.60
Australia
0.40
0.20
US
0.00
IEA Dec 2003
57
58. The UK Fuel Tax Escalator Margaret Thatcher
pence
Nominal tax per litre (pence)
50
Real tax
40
30
20
10
0
1988 1990 1992 1994 1996 1998
Australian fuel taxes should be raised to European
levels on a fuel tax escalator
58
62. Gb/year
5 0
50 Efficiency
Demand
World oil Growth
Transport
40
4 0
shortfall scenarios mode shifts
Pricing / taxes
City design/lifestyle
30 Past Production of Oil
3 0
Other petroleum fuels
gas, tar-sands
20 2 0
Other fuels
Forecast Deprivation, war
Production
10 1 0
2007
0 0
1930 1950 1970 1990 2010 2030 2050
• no single “Magic Bullet” solution,
• probably no replacement ever for cheap plentiful oil
• Urgent preparation and adjustment are vital 62
63. Ghawar is Saudi Arabia's and the world's biggest oilfield
If it is at peak, then global peak is probably very close
Blue is water, green is water and oil mixed
and red/purple is “dry” oil with little water in it
63
65. Gboe/pa World All Oil & Gas (gas at 10,000 cft=1bbl)
60
Non-Con Gas
50 Gas
NGL
Polar
40 Deepwater
Heavy etc
30 Regular Oil
Gas
20
10
0
2007
} Oil
1930 1950 1970 1990 2010 2030 2050
www.PeakOil.net ASPO 2006 65
66. Gb/year
50
50
Demand
World oil Trend
40 shortfall scenarios
40
30 30
Past Production of Oil Shortfall
20 20
Forecast
Production
10 10
2007 2030
0 0
1930 1950 1970 1990 2010 2030 2050
By 2030, the gap is equivalent to 6,000 nuclear reactors
66
67. 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.
67
68. Past Oil Production Demand
1.0
and Forecasts
0.8
0.6
Australia
0.4
Geoscience Australia
0.2 Total
Bass Strait
0.0
1930
1930
1970
1970
2010
2010
2050
2050
4
40 IEA
Shell
0 World
ASPO and others
3
30
Bauquis
Gb pa 0
Samsam Bakhtiari
2
20
Deffeyes ASPO
0
1
10
0 2007
0
0
0
1930 1970 2010 2050 68
74. Global liquids capacity to 2015
120.00
110.00
100.00
Million b/d
Supply IEA
90.00 Capacity CS
Capacity CERA
80.00
70.00
60.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year
74
75. SCENARIOS ANALYSIS CONCLUSIONS
Basis: Immediate crash program implementation
Scenario Result
Oil shortages largest,
Wait for peaking longest lasting
Delays peaking; still
Start 10 years early shortages
Avoids the problem;
Start 20 years early smooth transition
No quick fix!
75