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,

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The Peak Oil Debate

Will global oil production start its final decline soon, or not?What might it mean for public transport?

Bruce RobinsonConvenor, ASPO-Australia

1st May 2007 PTA

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www.ASPO-Australia.org.auAn Australia-wide network of professionals working to reduce oil vulnerability

ASPO-Australia Working groupsFinance SectorHealth Sector Social Services SectorRemote indigenous communitiesActive transport (bicycle & walking)Agriculture, Fisheries and FoodBiofuels Urban and transport planning Oil & Gas industryBehavioural changeLocal Government sectorRegional and city working groupsConstruction IndustryFreight sectorPublic transport sectorDefence and Security EconomicsTourism 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

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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 Oilbutwhen?

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Many books about Peak Oil

Campbell & Laherrère March 1998

Campbell 2003

Brian Fleay Perth 1995

Deffeyes 2001

Heinberg 2003 Roberts 2004

2005

2006

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•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 StreitbergEric StreitbergExecutive Director Executive Director ARC Energy LimitedARC Energy Limited

Australian Petroleum Production & Exploration Association conference

APPEAApril 2005Perth

•1/3rd

•1/3rd

•1/3rd

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Mb/d

US oil production: Peak in 1970

2007

Jeremy Gilbert, ex BP www.PeakOil.net

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IEA Shell

Bauquis, Total Deffeyes

ASPO & Skrebowski

Gb pa

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2007

Past World Oil Production and Forecasts

Prof. BauquisFrance

Dr Ali Samsam BakhtiariIran

Chris SkrebowskiUK

Prof. Aleklett, ASPOSweden

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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

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Alaskan North Slope ProductionReserves grow -- Production fallsPrudhoe Bay, Alaska

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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.’

Decline

Expansion

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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

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The real oil discovery trendLongwell, 2002

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1995-2025 Discovery Forecast USGS

The real oil discovery trendLongwell, 2002

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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

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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

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The top five decliners in 2005

Country Production Peak Year DeclineUSA 6.8mn b/d 1985 -5.51%Norway 2.9mn b/d 2001 -7.50%UK 1.8mn b/d 1999 -11.00%Mexico 3.8mn b/d 2004 -1.60%Syria 0.5mn b/d 1995 -11.40%

1970

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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

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/d Supply IEA

Capacity CS

Capacity CERA

Global liquids capacity to 2015

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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

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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" ??

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ABARE oil price forecastsUS$/bbl2002 for 2004 $262004 for 2005 $322004 for 2005 $37.95 – 4.8%

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1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77May-06 Dec 2012Dec 2011

NYMEX Futures WTI 10th April 2006 US$/bbl

ABAREUS$39

in 2011

NYMEXUS$67

in 2011now US$68.87

(30th April 2007)

ABARE2005

US$35 in 2006

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Geoscience Australia, APPEA, ABARE

Australia’s oil production and consumption1965-2030

Million barrels/day

Actual Forecast

Consumption

Production

P50

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Perth’s Central Park building is 249 m high, to top of tower

Australia uses 45,000,000,000 litres of oil each yeara 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 EfT3

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Australia China United States

1 kml l

Million barrels/ day 2005 BP Statistical Review, 2006

Australia uses 0.9 China 7.0US 20.6World 82.5 US 1 cubic km oil / year

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Energyfiles LtdEnergyfiles Ltd

EENERGYNERGYFFILEILESS

www.energyfiles.cowww.energyfiles.comm

Oil production is not shared equitablyUS: 5% of world's population uses 25% of world oilChina: 21% 8%

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UK

Consumption

Export/Import

Quelle: BP Analyse: LBST, ß

Production decline rate ~ 10%UK will be a net importer by 2007

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Export

Quelle: BP 2003; Analyse: LBST, ß

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Data: BP. Analyse: Zittel LBST, ß, Pang Xiongqi

2020

Production

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Oil available for export

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Years After Crash Program Initiation

Impact (MM bpd)

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35EOR

Coal Liquids

Heavy Oil

GTL

Efficient Vehicles

Worldwide Crash Program Mitigation of Conventional Oil Production Peaking

A Study for DOE NETLHirsch et al., 2005

Delay / Rapid growth.

Roughly 35 MM bpd at year 20.

2005

Study

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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

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Mortgage and Oil Vulnerabilityin Perth

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VAMPIREOil vulnerability and mortgage rate risk

VIPEROil vulnerability and socioeconomic factors

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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 managementis an important mechanism of minimising exposureand 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?

EENERGYNERGYFFILILESESwww.energyfilewww.energyfile

s.coms.com

[email protected] 0427 398 708

GLOBAL OIL PRODUCTION FORECAST: 1950 to 2050

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© Energyfiles Ltd

DISCOVERIES

PRODUCTION

offshore

onshore

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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.

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Petrol taxes OECD

IEA Dec 2003

PortugalUK

Australia

US

€ 0.80

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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

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BP Statistical Review of World Energy, 2006

UK Fuel Tax Escalator started

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石油消費 （単位 100 万バレル／日）

英国

日本

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英国でのガソリン税課税強化開始

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Priorities

First: Community awareness and engagement

2: Frugality3: 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

[email protected] 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

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Perth

Sydney

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Urban passenger mode shares Australia

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BusOther

Potterton BTRE 2003

High automobile-dependence

Public transport share is very low

Car

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Government of Western Australia

STATE LIQUID FUEL SHORTAGE

EMERGENCY PLAN

OPERATIONAL PLAN PREPARED BY

ENERGY SAFETY DIRECTORATEDEPARTMENT OF CONSUMER

AND EMPLOYMENT PROTECTION20 Southport Street, W Leederville WA 6007Tel: (08) 9422 5200 Fax: (08) 9422 5244

January 2003

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PERTH TRAVEL SURVEYS - 1976 to 2003 (Prepared by Robin White 15 March 2007)

1976 1986 PTS 2003 2003PRTS (See note 9) PARTS PARTS

(weekdays, school days?,

(weekdays, school days,

(weekdays, school days, (all days,

5yo+) 9yo+) 9yo+) all ages)(see note 1) (see note 2) (see note 3) (see note 3)

Mode SharesWalk only 15.7% 11.6% 10.8% 10.6%Cycle 3.0% 5.3% 1.6% 1.6%Public transport 8.0% 7.4% 5.5% 3.9%Car passenger (see note 4) 14.8% 18.0% 29.1%Car driver (see note 4) 59.1% 62.5% 53.2%Other (taxi, motorbike, etc.) 3.5% 1.8% 1.6% 1.5%Total 100.0% 100.0% 100.0% 100.0%

69.8%

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

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Walk Bicycle Transit Car

Perth Mode Share (2003)

{If 25% of car users change to public transport

45www.ASPO-Australia.org.Au

Bicycles are powered by biomass, renewable energy,either Weetbix or abdominal fat

No shortage of either

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

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Crude oil: Saudi versus Russia

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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 1948If it is at peak, then global peak is probably very close

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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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NGLs

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www.PeakOil.net Association for the Study of Peak Oil & Gas, 2004

Gboe/pa World All Oil

2007

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www.PeakOil.net ASPO 2004

2007

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World oil shortfall scenarios

Past Production of Oil

ForecastProduction

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By 2030, the gap is equivalent to 6,000 nuclear reactors

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Deprivation, war

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Efficiency

Other petroleum fuels gas, tar-sands

Other fuels

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• no single “Magic Bullet” solution, • probably no replacement ever for cheap plentiful oil• Urgent preparation and adjustment are vital

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2007

Past Oil Production and Forecasts

1930 1970 2010 2050

TotalBass Strait

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China

US

Australia