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Australia: Oil: Living with Less

It looks like the peak oil message is starting to make some inroads at the state government level, at least in Western Australia. The Sustainable Transport Coalition's 'Oil: Living with Less' conference was held at the Perth Convention Centre on Monday August 9th and was opened by the state Minister for Planning and Infrastructure, Ms Alannah MacTiernan.

Alanah MacTiernan, who seems to be a genuine peak oil convert, recognises that "a problem is emerging" and mentioned peak in the time frame 2010-2035 although obviously thought it was more likely sooner than later. While she is perhaps the only one in cabinet who is onto the problem her portfolio is perfect for a peak oil advocate. There are some large projects underway in Western Australia such as a new train line tunneling under the CBD and a second gas pipeline coming down from the North West shelf that apparently have been brought forward at least in part by the oil supply concerns. An emphasis on bus transport and a move away from our car based culture was also evident.

The view from the convention centre windows at the lunch break was informative, there is a big field of mud where there used to be a freeway onramp soon to be a rail station for the new line. Is Perth the only capital city in Australia that is demolishing freeway to make way for rail?

Bruce Robinson of the Sustainable Transport Coalition claimed that WA is a 'world leader' in its approach to oil depletion although I think we've got a long way to go as it is still very much a car based culture with massive suburban sprawl.


World and Australian oil production projections.
Republished from a related presentation by Bruce Robinson. Image added by Eds.

Brian Fleahy warned that while "water is renewable the energy used in its delivery systems isn't". A new peak capacity power station is being built to cope with growth in electricity consumption, probably using gas, and the desalination plant will use a lot of that as well. A sustainable water policy is important for Perth's future as rainfall runoff into our catchments has apparently fallen by over 50% since the mid-70's and the drought is accelerating. Fossil fuel based global warming is having a drastic effect on our local climate and apparently Perth is the canary in the coal mine for all of Australia with Dr Tim Flannery warning recently it may become a ghost town.

Dr Ali Samsam Bakhtiari, of the National Iranian Oil Company, suggested that Australia is better placed than perhaps most other nations and was surprised at the level of discussion of the problem in WA. He sees a global peak in oil production by 2006-2007, no later than 2008 and does not think non-conventional (deepwater and arctic) oil will make much of a difference. Outside of the Middle East, oil production worldwide is already falling and the Persian Gulf oil supply is itself largely founded on old super giant fields like Ghawar.

He claims both Saudi and Iranian fields are overextended and the only good fields left are in Iraq. The largely unexplored Iraq western desert may hold upwards of 40 Gbl, or nothing at all, and if ever brought online optimum production in all of Iraq could be over 6 mbl/d according to his calculations. However, this optimistic level of production should be compared with our current consumption of 81+ mb/d and strong demand growth of 3% or more per annum, a production level that Dr Bakhtiari thinks is already very close to its peak.

There will probably be a fairly long plateau period for Persian Gulf oil though which will therefore increasingly play an even more important role in world supply but there is currently very little leeway as far as spare capacity goes. He warns that our way of life will change 'very, very soon' and that change will be absolute and unprecedented.

Dr Bakhtiari left after his talk to brief state cabinet on the oil situation before returning for the afternoon sessions. He also appeared on the local commercial news with Channel 10 leading with a short interview and the headline 'petrol to rise to $3/L in 2-3 years'. It's the first mainstream peak oil news byte I've seen on Australian TV, and both the conference and cabinet meeting made the business section headline in the West Australian newspaper. His talk at the conference seemed to make the biggest impact as he stressed the global urgency of the problem and its massive implications for our way of life, something the STC perhaps isn't as focused on with its emphasis on transportation issues. The food production problem for instance didn't get much of a hearing, an omission Brian Fleahy pointed out.

Overall there was a good mix of people from business, the unions, government, charity organisations and others. There was even a talk by David Smith from the state Treasury Department on the modeling they've done based on a 20% rise in fuel prices. Nothing particularly interesting apart from the fact they're looking at the problem in the first place. Lisa Baker of the WA Council of Social Services (WACOSS) gave a talk on the growing poverty levels in WA and the problems faced by especially rural communities that rely on car transport to connect with services that are already shrinking along with employment. She claimed charity organisations around the state are already strained by rising fuel costs and the regional poor are very vulnerable especially where demand for charity assistance has risen sharply the last couple of years with over 500 000 transactions per year statewide. So much for trickle down economics.

The afternoon session was divided into three scenarios, fuel prices staying at $1, rising to $3, and the supposedly extreme scenario of $10/L oil. I opted to see what they thought of the $10 scenario. It started out rather optimistically with estimates of the timeframe for $10 petrol within about 20 years or so until we considered the possibility of the outbreak of a wider Middle East conflict. The scenario was then split into two possibilities, one being a short term spike in price due to war or other unforeseen circumstances and the second due to the longer term supply decline as the resource depletes. The severe oil shock was seen as much more problematic as far as its economic consequences and our community's ability to respond goes.

Generally there seemed to be, at least initially, an emphasis on how we might transition to more efficient transport and the STC people seem to believe that a hydrogen economy is possible. The ultra-light sub 1 litre car was even economical at $10/L petrol. However, after it was pointed out that the US economy is over $US30 trillion in debt, the Australian economy over $AUS1 trillion in debt with both economies driven by middle class credit spending, the possible economic chaos caused by this $10 scenario highlighted the difficulties that might be faced in any transition to a more energy efficient economy.

Basically by the end we seemed to agree that the $10/L scenario is quite probably a national and state emergency scenario, especially in the event of a sudden oil shock driven by war. Such a shock could very well result in a global economic crash and the collapse of international trade as air and sea freight costs go through the roof. By the time I mentioned the possibility of hyperinflation and terminal economic depression with the debt ridden middle classes being just as vulnerable as the poor the discussion got rather heated. I think there may have been a few debt ridden middle income earners there.

Overall the scenario calls for a massive localisation of travel, manufacturing of basic commodities, food production, education and other services - that is, a return to earlier modes of community. The STC delegates put the big picture together rather quickly and stressed the need for a move to cycling and public transport, to the use of trains and even shipping for moving goods around Australia, and the necessity of a coordinated response at the local, state and national level. In the medium term WA's gas supply looks like a lifesaver so long as we don't turn into a desert too quickly and the stated reserves don't deplete too quickly. A point was made that transport and travel will revolve more around considerations of cost rather than time, for instance moving freight by truck in 36 hours coast to coast will give way to slower rail and even possibly shipping as the costs scale up. There may even be a return to passenger shipping with someone mentioning the cheap Asian sea fares that students took advantage of in the 70's.

Dr Bakhtiari sat in on the session for the last 30 minutes or so and by the end we were into emergency government and war economy scenarios in the context of a severe oil price shock and/or global economic depression. Dr Bakhtiari suggested that it would require an act of god for the world to avoid warring over depleting energy resources, at which point our time was up. He also said the best thing we could do is to talk about it as we were already doing since planning and change needs to happen now, and that change is already on its way whether we plan for it or not.

Sustainable Transport Coalition - 'Oil: Living with Less'
Media Statement - WA Dept Planning and Infrastructure
Association for the Study of Peak Oil
Energy Bulletin

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