1

The Impact of Oil Depletion on Australia

Bruce Robinson, Brian Fleay & Sherry MayoSustainable Transport Coalition

ASPO Lisbon May 2005

? ? ? ? ?

? ? ? ? ?

Look Out Australia ! Something serious is looming on the radar

Sustainable Transport Coalition

2

Summary

Australia, now Oil demand, production, use (transport)

Geography, population3 different countries remote, rural, urban

High Oil Vulnerability Australia will be badly affected by oil depletion,

unless substantial changes are made

Possible change options for government

3

80% of Australia’s oil usage is in transport

If Australia’s 20 M tpa wheat crop → ethanol = 9%

Australia uses 45,000 megalitres of oil each year

a 360m cube

Sydney Harbour Bridge is 134 m high

=1.3 EfT3

4

0

10

20

30

40

50

60

70

Oil consumption bbl/day/1000 people

Aust Eu-15 USA China Japan0

100

200

300

400

500

600

700

800

900

Australia EU-15 USA China Japan

Registered Vehicles per 1000

Aust Eu-15 USA China Japan

Registered vehicles /1000 people

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

Australia EU-15 USA China J apan

Oil Consumption bbl/day (blue = net imports, red = production)Total Oil Consumption

Production Net imports

Aust Eu-15+ USA China Japan

20

0

10

M bbl/day

EU 15 + Norway

1 km

Australia

China

United Statesl l

5

Australia's liquid fuel production decline began in 2001.

Powell, Geoscience Australia, 2001

6

0.0

0.2

0.4

0.6

0.8

1.0

1 11 21 31 41 51 611965 202520051985

1.0

0.0

0.2

0.4

0.6

0.8

Geoscience Australia, APPEA, ABARE

Australia’s oil production and consumption1965-2030

Million barrels/day

Actual Forecast

Consumption

Production

P50

Evolution of Forecasts of Australian Oil ProductionGeoscience Australia (Australian Geological Survey)

k bbl/day Actual Forecasts

Evolution of Forecasts of Australian Oil ProductionGeoscience Australia (Australian Geological Survey)

k bbl/day Actual Forecasts

Past liquids production forecasts have often proven too low.NGL production depends on gas contracts

9

Australia“A wide brown land”“The Tyranny of Distance”

Annual rainfall

3200

1600

mm

800

400

Perth to Sydney 3300 km

BigMostly aridMostly low fertility soils20 M people Already exceeding sustainable population

10

Europe and Australia by night – same scale, same brightness

11

Remoteness classificationMajor citiesInner regionalOuter regionalRemoteVery remote

Very remote

Major cities

Outer regional

Remote

Inner regional

3 separate countries Remote Regional Urban 3% 31% 66%

12

Indigenous communities

Blackstone community

ROAD ACCESS:800 km to Alice Springs. 1110 km to Kalgoorlie

Weekly police patrol visits by vehicle from Laverton, 750 km to the West.

Twice weekly small aircraft from Alice Springs to Kalgoorlie,

The largest dots indicate 500 people or more, the smallest less than 50

2.4% of Australians are indigenous

Remote Australia mining, pastoral, indigenous

13

Blackstone Community Circa 100-200 peopleROAD: 800 km to Alice Springs (food and fuel)

14

Iron ore train, Pilbara ~ 200M tonne p.a.

Road trains

15Brockman Iron Formation, near Mt Tom Price, NW Western Australia

16

Rural Australia

Sparsely populated

17

18

Urban/Suburban Australia

Institute for Sustainability and Technology PolicyMurdoch University, Perth

City wealth vs car useper capita (1990)

AusUSEurope

car use wealth

19

Urban AustraliaKeilor DownsNW Melbourne

20

Melbourne Urban Sprawl30 km

Keilor Downs

21

Urban passenger mode shares Australia

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Mo

de

sh

are

(p

er

cen

t)

Car

Rail

BusOther

Potterton BTRE 2003

High automobile-dependence

Public transport share is very low

Car

22

Non-urban passenger outlook: Air grows faster than other modes

0

50

100

150

200

250

1970 1980 1990 2000 2010 2020

(bil

lio

n p

km)

Air

Rail

Other

Bus

Car

Actual Projections

Potterton BTRE 2003

Air passenger

Car

23

$10 PER LITRE PETROL: A SCENARIO(a ten-fold increase)

David Rice, Senior WA Transport Planner

The scenario means “What if petrol reaches $10/l?Planners should include this scenario, as well as “business-as-usual”

But why $10/l?

Simplememorable

an illustration of ‘expensive’

www.stcwa.org.au/beyondoil/$10petrol.doc

24

25

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

The impact of oil depletion on Australian cities.

The bushfire analogy

26

Satellite image of Canberra region showing fire-damage from the west. January 2003.

Red hues are burnt areas.

White lines show suburbs

27

Oil shocks, like the $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.

Perth30 km

28

Oil shocks, like the $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.

Perth30 km

29

Oil shocks, like the $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.

Perth30 km

30

Oil shocks, like the $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.

Perth30 km

31

Perth30 kmThe outskirts of all

Australian cities will be hard hit by oil depletion, as public transport infrastructure is very poor

32

The Guardian Tuesday December 2, 2003

“Bottom of the barrel

The world is running out of oil - so why do politicians refuse to talk about it?

Every generation has its taboo ..the resource upon which our lives have been built is running out. We don't talk about it because we cannot imagine it.

This is a civilisation in denial”.

George Monbiot see www.monbiot.com

short

most^

UK National Newspaper

33

Govt releases new energy strategy

Future oil summary, IEA only “No Worries”

Another “Intelligence Failure” like WMD?

June 15, 2004

34

“Production itself is likely to peak, maybe as early as 2006, but more conventionally 2010 – 2015”

“It is also certain that the cost of preparing too early is nowhere near the cost of not being ready on time.”

WA Minister Alannah MacTiernan

“Peak oil represents the most serious and immediatechallenge to our prosperity and security.

It will impact on our lives more certainly than terrorism, global warming, nuclear war or bird flu.”

Queensland State Parliament

Western Australian State Government

35

0

10

20

30

40

50

1930 1950 1970 1990 2010 2030 2050

0

1 0

2 0

3 0

4 0

5 0

World oil shortfall scenarios

Past Production of Oil

ForecastProduction

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, • Noah! Start now! Hard to build the ark under water

2005

after Swenson, 2000

36

Individualised Marketing: Travel behaviour change

Equivalent to discovering another Iraq?

Reducing automobile travel can produce “nega-barrels”* of oil more cheaply than oil can be found by exploration. (*negative oil, saved by conservation)

Large programs in cities in Germany, Australia & Sweden have shown sustained average reductions of 13% in car-kms travelled.

Individualised Marketing informs interested people of available travel options. They are empowered to choose different travel modes and to reduce unnecessary travel.

The strategy (IndiMark®) was developed by Munich firm Socialdata.

About half the world’s 80 million barrels of oil per day goes on road transport. A 5% reduction in global motor vehicle transport usage would save about as much oil as Iraq now produces (circa 2M b/d).

Reduction of 10% in US travel alone would save half an “Iraq”.

Discovering another Iraq ?

www.STCwa.org.au/negabarrelswww.Socialdata.de

37

Petrol taxes OECD

IEA Dec 2003

PortugalUK

Australia

US

€ 0.80

0.60

0.00

0.20

0.40

Au$cents/litre

38

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

39

“Add in the geopolitical costs of oil and the case for raising petrol taxes, especially in America, becomes overwhelming”

April 30th- May 6th 2005

40

$0.00

$0.50

$1.00

$1.50

0 150 350 550 750 1150 1950

WA domestic water prices, 2002/03

/kl

kl range

A rational pricing system Perth domestic water

Renewable scarce resource

A personal fuel SmartCard system could tax petrol and diesel on a sliding scale like water.

People could trade unused allocations to those who want more fuel.

Water Analogy for Fuel Pricing

41

toroads,4WDsprofligate vehicle usersheavy inefficient vehicles

Supermarket petrol discounts

People who walk to the supermarket are subsidising those who drive in the big SUVs

There are innumerable “Perverse” subsidies

0%

10%

20%

30%

0 15,000 25,000 40,000

FBT tax on motor vehicles

km range

Tax on cars as part of salary

42

Participatory Democracy 1300 people at city planning workshop Perth 2003

Oil depletion actionneeds an informed and engaged community

43

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 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.

44

Australia must not let the opportunities slip awayMany of the policy options to reduce fuel usage will also lead to wealthier, healthier and happier communities.

Australia is very well placed globally Big attitude changes in past;

to race, gender, smoking, water..

World-leading demand management skills TravelSmart and water conservation

Considerable uncommitted gas reserves

Failure to act now will prove incredibly costly

Abstract at www.STCwa.org.au/aspo

See our “Oil: Living with Less” policySustainable Transport Coalition www.STCwa.org.au

45

Two spare slides follow in case of questions

46“Oil: Living with Less” at www.STCwa.org.au

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

No shortage of either

47

China

US

Australia