Peak energy and limits to growth
One hundred years ago today (as I write this in late May), sulfur fumes permeated the air at Masjid-i-Suleiman. A good sign indeed for an experienced oil hand like Reynolds. At 4am, the drill reached 360 metres under the desert sand and struck oil. A gusher, 25-metres-high, shot into the air. Arabian oil was born.
The site was so remote that it took five days before D'Arcy got word by telegram in England.
"If this is true," he replied, "all our troubles are over." It was indeed true, and more rigs hit oil elsewhere in Persia, including another huge one in September.
How things have changed. Whatever happened to telegrams? Whatever happened to the oil?
The 20th Century will undoubtedly be remembered for the explosion of technology, steam, then oil, then nuclear and solar powered technology. I stress, powered technology. Most people confuse technology with energy and unfortunately, they are not interchangeable; something fast becoming obvious as we approach the 21st Century era of peak energy and limits to growth.
There is so much nonsense in the media today about the reasons why petrol (and diesel of course) is so expensive, that it's mind boggling. Surfing the media's web blogs' tailing articles on petrol prices quickly exposes the man in the street's ignorance of the truth. Not that we can point the finger at 'people'. The media, outside of publications like this one, is doing very little to educate or inform their readers or viewers.
So, when I predict that within as little as four or five years we may not be able to buy any fuel at all, at any price, people of course think I'm a complete nut case. I can understand this. The government is hardly showing signs of any such concerns, especially when they propose to build new freeways and tunnels to the airport.
Peak oil is often misconstrued as 'running out' of oil. In fact, it's 'only' the point at which roughly half the oil has been extracted. This has been thoroughly documented in the USA which was by far the largest oil producer until after WWII. That nation peaked in 1971 and even though the largest oil field in all of North America (Prudhoe Bay) was put into service shortly thereafter, US oil production never recovered: inexorably decreasing to its current level, slightly less than 50 per cent of peak. Peak Oil is no theory, the American experience proves this beyond any doubt.
So what of Australia? The news, I'm afraid, is grim indeed. Australia's oil production peaked in 2000. The Australian Bureau of Agricultural and Resource Economics (ABARE) has, for reasons known only to itself, consistently incorrectly predicted our future oil production. This is most baffling. Just who are they trying to kid? Do they pick figures out of thin air?
Greens Senator, Christine Milne and Ian Dunlop, formerly an international oil, gas and coal industry executive, now also challenge our resources peak body for misleading everyone, not just once, but at least for five years running. This, in my opinion at least, borders on criminal negligence. One has to realise that very important decisions are made on the back of these predictions like enlarging airport runways.
When a nation's oil production peaks, it must then rely on imports from elsewhere. The US imports oil from Canada, Mexico (now collapsing) and Venezuela, with some top up from the Saudis and Africa. We in Australia, you may be surprised to find out, import oil from Vietnam, PNG, the United Arab Emirates, Malaysia, Brunei and, as a further surprise, New Zealand. We actually get more oil from NZ than we do from Saudi Arabia.
There is a problem with importing oil from less developed nations. They want what we have, and they are developing at an accelerating rate. Since Vietnam is our biggest single supplier (currently 28 per cent of all imports), let's analyse their situation.
Figure 1 shows Vietnam's oil production, which did not start until 1986 and steadily rose to a peak of just over 400,000 barrels per day in 2004. It has declined ever since.
Figure 1
Figure 2 shows Vietnam's domestic oil consumption, rising very quickly to 275,000 barrels per day (in 2006) as that country's economy grew at a mighty 7.1 per cent annually -- a doubling of GDP (and by definition, consumption), every ten years. By now, production is probably down to 300,000 barrels per day and consumption is up to about 300,000 barrels per day.
So where's our oil going to come from now? And, how dare they use it all up! Figure 3 shows Vietnam's net export in virtual free fall from 175,000 barrels to 90,000 barrels per day in a matter of just five years.
Figure 2
At the time of writing it might be possible, that like Indonesia (which has just left OPEC), Vietnam has become a net oil importer, just like we are. Minister for Resources and Energy and Minister for Tourism, Martin Ferguson worries about a deepening trade deficit of some 25 billion dollars from importing oil, but I worry about there being none at all left to buy.
There is not the room here to analyse what is happening to the other nations we import from, but I can tell you that apart from the United Arab Emirates (representing just 12.5 per cent of our imports), the picture is similar everywhere, including Saudi Arabia. Oil exporting nations are rapidly declining and soon there will be none to turn to.
Figure 3
Within five years (give or take a year or two), unless another Bass Strait is found, Australia will be left with a maximum of 10 per cent of the oil we now take for granted. This is what extrapolating ABARE's own optimistic data shows.
Now we might find another Bass Strait, but you have to understand that even if another 250,000 barrels per day of Australian oil comes on-line over the next five years, we would still only have about one-third of the current demand.
This is not the time to build new freeways and tunnels to airports, which may even be quasi abandoned within five years as airlines all over the world go belly up. What we need is a major effort to build new rail infrastructure and other associated public transport. I see no other option but to start rationing fuel and fairly soon, allowing only essential services like farming, medicine, fire brigades and so on to continue operating. Time is short, we must act now. We need visionary leadership.
Suggested reading:
The Oil Drum
Future Scenarios
Peak Oil
Discussion group
Permaculture Noosa
Liquid Fuel Emergency Amendment Bill 2007
About the Author: Mike Stasse is a Sustainable Housing and Energy Efficiency consultant and an accredited BERS energy rating Assessor. He lives with his wife in the Noosa hinterland at Cooran in their Award Winning eco-solar house.
Also see Mike Stasse on You Tube.
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- Crude facts about peak oil
- Solutions to peak oil
- Nambour ahead in peak oil race
- Illustrating peak oil
- Sunshine Coast is Australia’s first Transition Region
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A brilliant article, one that points up the need for Australia to seriously consider nuclear power stations, and actually plan for perhaps 3 to start with. After all, if we ever expect to do without oil (and what about reducing the amount of carbon gas we produce through the coal-fired power stations), we will eventually have to find some other means of fuelling our cars.
Great article Mike... Look forward to reading more of your ideas in future editions... Lets hope and pray that there are some 'visionary leaders' listening who are brave enough to impliment the necessary changes... Cheers Debee
Disappointing comment Geoff.
The car is soon to be dead, except for the very wealthy and powerful. Get over it.
And the nuke option does not reduce GH gas production. The proponents of nuclear power never mention the amount of finite fossil fuel (the stuff we are running out of) that is needed during the mining and processing of uranium, the construction and maintenance of nuclear facilities and the return of these facilities to benign conditions post their useful economic energy generation period. In fact, no nuclear electrical power generating facility has ever been successfully shut down having it’s waste being rendered as “safe” for the thousands of years that it remains toxic to humans and other species. “Successful shutdown” is just too expensive, both fiscally and energetically. Our kids will have to deal with this massive problem that we keep putting off.
The nuke option does not reduce GH gas production. And uranium, similar to the fossil fuels, is finite.
And I doubt whether the remote mining machinery that is necessary for the extraction of uranium will continue to be available for too much longer. Already, the massive tyres on the mining dump trucks are becoming very scarce/expensive. Rio Tinto in Oz will not buy new machines unless the suppler guarantees tyres. Currently the waiting time for delivery is about a year for some dump trucks.
Whether we like it or not, whether we plan for it or not, we will all have to face a massive drop in lifestyle as we run out of finite fossil fuel (coal, oil and gas). Perhaps this won’t be so bad. Cuba faced their own “Peak Oil” at the beginning of the 1990s and they made it despite the additional problem of the trade embargo that was imposed by the USA many years beforehand. They lost about 50% of their oil imports most of which used to come from the USSR before it collapsed and about 80% of their food imports. Cubans lost an average of about 10kg in weight during this difficult period. Maybe this would be a positive for we Aussie fatties.
Despite these difficulties the Cubans still have a higher literacy rate and superior health care than their northern neighbour the USA. They export educators to the rest of the world and their food producers are the highest paid members of their communities. Public transport or low energy transport (bicycles) are a grudgingly accepted way of life.
We could learn from the Cubans if only our leaders would accept that we have a problem and attempt to address it.
Ha! Doubt it. There are no votes in promoting altruism.
How much oil does PNG export? I found the article very interesting especially since more oil comes from NZ'd than Saudi.
We imported (in 2006) 185ML (Mega Litres) of oil from NZ, as opposed to 112ML from Saudi Arabia. It's a pity the online article does not include all the URL I tagged on the end of the printed article, but the data (and further links) is available at http://anz.theoildrum.com/node/3657
Ditto the comments from Bucko on nuclear. What we've done is to build a whole way of life around a finite, non-renewable energy source--fossil fuels. Uranium is also a finite non-renewable energy source, so even if it did not have massive dangerous waste disposal problems, the same scenario is going to apply. We've simply got to scale down energy use to something which is more sustainable (and safer) to use.
Someone famously said insanity is doing the same thing over and over and expecting different results every time. Trying to continue business-as-usual with uranium is pure insanity.
To Peter I should've said we imported 362 ML of oil from PNG...