7 years of peak oil mav presentation november 2011 matt mushalik (mieaust, cpeng)...
TRANSCRIPT
Contents
1.1 Global production plateau in year #71.2 Net available crude oil exports have peaked already1.3 Peak oil in key countries triggers social unrest2 Why we still have our heads in the sand3 We are too blind to see when peak oil pops up here and
there: Some impacts for Australia: EVs, Transurban, Qantas4 We really screw it up: gas, our only viable alternative
transport fuel, is exported in huge quantities5 Links between peak oil and debt crisis 6 All together now: System dynamics: peak oil, financial and
CO2 debt, ME geo-politics
Peak oil is a process
Export peak
Available net crude oil exports
Projection by Jeff Brown: Available net exports by 2020
ASPO Projection
The other side of the coin - imports
What some are “saving’ is consumed by others
Peak oil in key countries: Egypt
Comparison diesel prices Egypt/International
Egypt energy subsidies
Surprise waiting in Libya
Sudan
Syria
Yemen
Oil prices in US$ to balance oil producer’s budgetsBanque Saudi Fransi PIRA PFC Energy MEES
Saudi Arabia 66/84 81/85 49 50/58
Iran 80/89 95 66 60/95
Iraq 71/78 112 72 62/76
Kuwait 65/75 66 38 43/60
Qatar 58/65 55/55
Algeria 72/80 97 73 37
Venezuela 81/85 83 40/40
Russia 98 75/105
Angola 63
Indonesia 60/95
Iran’s oil export extinction
Summary: Strategic shift for oil supplies from MENA countries
• Convergence of many problems with peak oil• Young, aspiring and growing population• Oil industry does not create many jobs• Fluctuating revenue from oil as a result of oil
price roller coaster• Budget problems as a result of subsidies which
are hard to reduce• The era of the West’s cosy relationship with
strong rulers who guaranteed oil supplies is over
Heads in the sand: Responses to my emails
1. I suspect he sent this to every email he could find. I would have ignored it. (inadvertent c/c )
2. I believe you are a legend in your own mind, keep living in it.
3. I am not sure why I get these emails 4. I am sick of receiving these messages5. Your emails are of no relevance and no interest to me6. For a simpler 2011, please remove me from your mailing
list 7. Interesting but I just have too many emails 8. It's great that you're advocating for more critical
approach to infrastructure decision making. But I'm quite busy, so could you please remove me from your list?
What Ministers say
1. May 2008 in front of ABC studios: “Prime Minister, we need electric rail on all free-ways like in Perth”. PM Rudd:“Yes, I have seen that”. No action.
2. July 2008 Transport Minister Albanese at Petersham Climate Forum: “We cannot solve the problem of peak oil in 5 minutes tonight”. Result: More highways funded.
3. April 2010 Resource Minister Ferguson at Community Cabinet Meeting, Epping: “We can always buy oil”
4. April 2010: “Prime Minister, OPEC’s paper barrels require your immediate attention”. Sadad-Al-Husseini’s graph disappeared in a big heap of files
What top bureaucrats sayNSW Director General Planning
At a Sydney Uni Sunset seminar on the Metropolitan Strategy, May 2010
• Question: “How many million barrels of oil, million tons of coal and million m3 of gas are needed to implement plans for, say, 10 years and what is the CO2 absorption capacity of the atmosphere when burning these fossil fuels?”
• Answer: “That question goes too deep”
What top bureaucrats say Secretary Infrastructure in budget hearing May 2011
Senator LUDLAM: So what is going on?Mr Mrdak: In relation to peak oil? Senator LUDLAM: Yes, in relation to peak oil and the biggest road construction
program in 40 years. Is there any contradiction inherent in those two concepts? Mr Mrdak: I do not believe so……..Senator LUDLAM: Where are we going to be getting our oil from?Mr Mrdak: For a decision on what alternative fuel sources may be available, a
whole range of technological and vehicle investment decisions are taken. I do not think anyone is suggesting that peak oil, if and when it is reached, will reduce demand for private travel. The reality is consumers look to alternative modes of power source for travel.
Senator LUDLAM: No, they will look to public transport. As to your saying 'if and when', the International Energy Agency said the rollover for conventional oil was 2006. We are not having the if-and-when conversation any more.
Mr Mrdak: I do not think that debate is completely closed
Summary heads in the sand
1. Top decision makers • are unconcerned• think we can endlessly debate• assume market forces and technologies will solve
demand problems• have complete confidence in business as usual2. Current set of decision makers cannot and will
not prepare for declining oil production and reduction of CO2
3. Some really dramatic and continuing events must happen for this to change
Geoscience Australia: oil decline
WA oil production profile
Australia’s oil import dependencies
Australia’s import dependency
End of car culture in this decade: EVs will have marginal impact
Qantas hit by invisible hand of peak oil
Profits global airline industry only 1.2% of revenue in 2011
Transurban
Tolls too low topay back $ 4bn debt
40% of distributions financed by printing shares
ConnectEast
Equivalent of EDR gas produced in just 20 yearsThere are no plans to use gas as transport fuel
• EDR = Economic Demonstrated Resources
Natural gas squandered in LNG exports
Natural gas as transport fuel
Total Australian requirement equivalent to 5.5 LNG trains – this is planned to be exported
No provision for coal seam gas to be used as transport fuel
Peak oil = peak debt
• Gail Tverberg, actuary from Atlanta: the US 65 year old debt bubble now pricked by peak oil
• Debt can only be paid back in growing economy, but oil-dependent economy cannot grow if oil production does not grow
• Only way out is to fundamentally increase oil use productivity in economy, but governments do not work on a portfolio of projects which would do that, e.g. rail
Oil prices economies can afford
<= Trend is running at +$10 pa
Price spike in 2008 caused by additional Chinese demand forOlympic games
Spare capacity now only 1 mb/d
Analysis from Chris Skrebowski, ODAC =>Blue line: Brent price going up at $10 paRed line: affordable price with efficiency increase of 3% paCrossover: 2014
Energy Consumption & GDP – (by Euan Mearns)
Timelines mitigation
Global warming
• NASA climatologist James Hansen: "Australia doesn't agree now that they got to stop their coal, but they are going to agree. I can guarantee you that within a decade or so because the climate change will become so strongly apparent that's going to become imperative"http://www.usyd.edu.au/sydney_ideas/lectures/2010/professor_james_hansen.shtml
• http://www.stormsofmygrandchildren.com/ • Future compensation claims to be decided by courts
M.H. Talukder, State Minister, Water Resources (Bangladesh)"Regionally, we are sufferer, and it is not created by us, it is our national argument that the responsible parties must compensate for it"http://www.youtube.com/watch?v=UisJSsPw-U0
System diagram peak oil,
global warming,
debt, Middle
East
http://crudeoilpeak.info http://www.crudeoilpeak.com Matt Mushalik (MEAust, CPEng) [email protected]