Six converging threats to our way of life... and how to be ready for the ripples!

 

Wise Up - The Crash Course

Chapter 1C - Peak Oil and Australia

(8 minutes)

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Go Next To:  Chapter 2:  The Climate Change Wildcard

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For Further Information:

www.aspo-australia.org.au  (Australian branch of the Assoc. for the Study of Peak Oil)

www.anz.theoildrum.com  (Focus on energy & the future)

 

 

Prefer to Read? Here it is...

 

Chapter 1C - Peak Oil and Australia

Now let’s look at Australia specifically. How is it situated in regards to peak oil? 

 

There’s the bad news and
the good news...

 

The Bad News... We Peaked in 2000

As previously mentioned.. the bad news is that Australian oil production peaked in 2000 when the Bass Strait oil fields went into decline. As a result in the last few years Australia’s oil imports have risen, from a few percent in 2000, to 30 to 40 percent of our total oil consumption. Demand is expected to keep growing while production is predicted to go into a long-term decline. Hence our need for expensive oil imports will rise sharply in the coming years. The gap will grow.

Note:

Australia's oil deficit blow-out

by Keith Orchison - www.businessspectator.com.au   31 May 2010

The federal government dropped a rather startling statistic on the table during May and hardly anyone noticed.

Speaking to the Australian Petroleum Production & Exploration Association conference in Brisbane, Martin Ferguson revealed that we now have a national trade deficit in crude oil, refined products and LPG of $16 billion a year, heading for $30 billion by 2015.

The national energy resource assessment Ferguson released earlier this year says that, without a major oil discovery, domestic crude production will continue to decline while consumption, even depressed by carbon policies, is forecast to grow by an annual average of 1.3 per cent out to 2030.

In simple terms, we were self-sufficient in oil production in 2000 and are now a little less than half self-sufficient – and by 2030 on present trends will be meeting only a fifth of our needs from our own resources.

In a television interview two years ago Martin Ferguson acknowledged “huge problems on the (fuels) trade front” and, on his own numbers, the elephant in the room has put on a lot of weight since then.

 

CSIRO – Future Fuels Forum – June 2008

In 2008 CSIRO led a Future Fuels Forum with representatives from Australia’s transport stakeholders including major organisations suchs as oil companies, governments and automobile associations.

 

CSIRO: Key Conclusions

Their key conclusions were that…. Australia is more vulnerable than some other countries due to its high vehicle use (which is code for inadequate public transport), high fuel consumption by vehicles, its 97% reliance on oil for transport and declining domestic reserves of conventional oil.   

 

They predicted that… Petrol prices could…

And that… Transport intensive…

 

The Good News... Coal Seam Methane Gas
Reserves in Central Qld

I promised you some good news. Here it is… Coal Seam Methane Gas reserves in Central Queensland and some other eastern states. It is well known that Australia has some large natural gas reserves off the northern coast of Western Australia. Less people are aware of the potential of the massive coal seam gas reserves in eastern Australia. While there are some technical challenges it is widely accepted that these Central Queensland reserves are major commercially viable sources of natural gas.

 

The global situation with natural gas is complex as markets tend to be regional due to the higher costs and energy inputs needed to liquefy and transport natural gas when pipelines are not practical. In Australia, due to our large coal seam methane reserves not far from our major eastern cities, natural gas is the most likely alternative to oil to keep our society functioning as oil becomes increasingly expensive. However it will take years to develop production flow rates and we will be paying the international price for gas which is expected to rise a lot as oil prices rise. Much of this gas, as in Western Australia, is committed to export to other countries by the major companies involved. This is why massive natural gas liquidification plants are planned for Gladstone in Queensland and the Kimberly region in Western Australia. It is possible to convert our trucks and cars to run on compressed natural gas but it will take time and huge investments in distribution systems and engine conversions.

 

In the meantime LPG conversions will be a practical short-term alternative for some as Australia currently meets all of its LPG demand from domestic reserves. LPG is different to LNG or natural gas. LPG or Liquid Petroleum Gas is mainly a by product of oil drilling and refining and is much easier than natural gas to store and use in existing vehicles.

 

Where Does This Leave Australia?

Where does that leave us here in Australia. We have a big problem with falling oil production and a rising need to import oil but are fortunate to have higher natural gas reserves per capita than most countries. If used wisely these gas reserves may protect us from some of the worst impacts of peak oil in the next two decades but natural gas will not be a cheap, easy substitute. Strong international demand for gas after peak oil will push up natural gas prices. Also gas does not have many of the advantages or uses of oil.

 

Australia may be better off than many countries but we will not be immune from the problems in the rest of the world. If the global financial crisis can already cause the Australian and world economic growth to falter then long-term economic contraction is even more likely once the era of cheap oil ends and energy descent on the other side of peak oil begins. Many mitigation options to cope with the changes will no longer be affordable for the Australian government or other governments as the economy and the tax base shrink and energy costs for infrastructure projects such as public transport, dams, and pipelines spike higher. Just maintaining our existing transport, energy, water and sewerage infrastructure will be difficult enough in the post-peak world as they all depend on cheap fuel.

And remember, peak oil is just one of the six global stresses that Australia will need to cope with in a relatively short time span.

 

Go now to the next chapter in Wise Up - The Crash Course to look at the Climate Change wildcard and what it might mean for Australia.