peak oil 2005-2008 stay connected matt mushalik (mieaust, cpeng) [email protected]

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Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) [email protected]

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Page 1: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Peak Oil 2005-2008Stay connected

• Matt Mushalik (MIEAust, CPEng) [email protected]

Page 2: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

1973 oil crisis: Sunday driving bans in Europe

70/71 5.8%

71/72 5.6%

72/73 8.9%

73/74 0.3%

74/75 -4.8%

Page 3: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

2nd oil crisis 1979

Page 4: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Queues in Harare

Page 5: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Get your petrol quota and use your motor bike

Page 6: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Why peak oil?

Page 7: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

UK in terminal decline

Alpha Piper Accident July 1988

3 main causes for peak oil:

• Peak in fields• Drive for growth• New, smaller

fields cannot stop decline

1

2

3

Page 8: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Russian Oil Peak

Volga-Ural peaked mid 70sTotal mid 80s (West Siberia)Chernobyl 1986èEnergy double whammyExports end 2020-2030

Page 9: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Global Peak Oil

Page 10: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

IEA’s World Energy Outlook 2008

Page 11: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Crude peak started May 2005

Page 12: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Russia is peaking, Saudi Arabia lost swing role

Page 13: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

OPEC crude double peak

Page 14: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

20% of reserves => 45% of global production

Page 15: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

WA crude and condensate production

Page 16: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Financial crisis and peak oil

Peak oil

Accumulated

debt

Expectation of growth

Banking & credit crisis Recession

Oil market failure OECD demand down

Lower oil prices and OPEC production cuts

High gas prices in US car dependent suburbia and exurbia; high inflation

Subprime mortgage Airline and car industry crisis in difficulties falling house prices

Less investments to offset 5 mb/d pa decline

Oil production decline; next oil price shock / shortage

Marginal barrel costs US$ 70-80

Page 17: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Marginal barrel costs US $70-80

Page 18: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Paleo climate: We are outside natural change Last 450 K years:natural climate change

(orbital changes + CO2 feedback)

Temp. Sea level CO2

Last

warm

+ 1 C + 2-3m 300

ppm

Ice

age

- 5 C - 120 m 180

ppm

385 ppm: back millions of years

Page 19: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Tipping points & surprises

National Academy of Sciences of the USA

We conclude that the greatest (and clearest) threat is to the Arctic with summer sea-ice loss likely to occur long before (and potentially contribute to) Greeland icesheet melt.

Tipping elements in the tropics, the boreal zone, and West Antarctica are surrounded by large uncertainty and, given their potential sensitivity, constitute candidates for surprising society.

Page 20: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Maslowski: Arctic summer sea ice free by 2013

Page 21: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

NASA climatologist James Hansen

If we look at the history of the Earth, we know that at the warmest interglacial periods, which were probably less than 1 degree Celsius warmer than today, it was still basically the same planet. Sea level was perhaps a few metres higher.

But if we go back to the time when the Earth was 2 or 3 degrees Celsius warmer, that's about 3 million years ago, sea level was about 25 metres higher, so that tells us we had better keep additional warming less than about one degree.

And the other piece of evidence is not from the history of the Earth but from looking at the ice sheets themselves, and what we see is that the disintegration of ice sheets is a wet process and it can proceed quite rapidly. We see that the ice streams have doubled in their speed on Greenland in the last few years and even more concern is West Antarctica because it's now losing mass at about the same rate as Greenland, and West Antarctica, the ice sheet is sitting on rock that is below sea level. So it is potentially much more in danger of collapsing and so we have both the evidence on the ice sheets and from the history of the Earth and it tells us that we're pretty close to a tipping point, so we've got to be very concerned about the ice sheets.

www.abc.net.au/7.30/content/2007/s1870955.htm

Page 22: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action #1: All coastal Councils to send delegation to State/Federal Environment and Climate Change Ministers

Every coal ship = one nail in the coffin of coastal cities

Prof. Rahmstorf, PIK, up to 1.4 m

Prof. Tad Pfeffer, up to 2m

Approved by Peter Garrett; all AU

motorists must walk to offset emissions just from stage 1

Page 23: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Time line of events determines strategy

• 2010 More oil price spikes and/or global oil shortages• 2011 Mexico’s net oil exports approach zero• 2012 Australia’s oil import crisis starts• 20?? China peak oil• 2013 Arctic summer sea ice disappears• 20?? Oil war in the Middle East• 2015 Saudi fossil water exhausted• 20?? Mother of all bubbles bursts: OPEC’s oil reserves• 2015 Iran’s oil exports end; social unrest• 2016 WA crude oil at 10% of current levels• 2020 Different Middle East• =>> very limited time, 5-10 years max. to prepare

Page 24: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action # 2: No more business as usual

• Moratorium on oil dependent infrastructure: No Pacific Highway bypass and/or duplication to Grafton

• Review all growth plans; most of them may not be sustainable (financially, environmentally, fuel supplies)

• no more car dependent subdivisions; allow 2nd floor extensions of single story homes

• Avoid high rises forced upon Councils by unrealistic population targets of State government; immigration to be reduced (already happening)

• Keep agricultural land for local food production

• Car based shopping centres will have to be replaced with local corner shops

• Create jobs in food and renewable industry

Page 25: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Land lost for bypass

Land will be needed for local agricultural production when long distance transport of foodbreaks down

Land would also be fragmented by new road; natural drainage flows disturbed

Page 26: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action #2: Biofuels to be used in agriculture

• All Australian sugarcane distilled into ethanol would yield 5 litres per week per car

• Don’t waste precious biofuels on private urban motorist

• Agriculture’s dependence on oil must be reduced

• Install E85 and bio diesel bowsers at rural filling stations for preferential use by those working in and for the agricultural sector

• Transport of food to cities will get absolute priority

Page 27: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action #3: Develop compressed natural gas (CNG)

• For buses, trucks, construction and mining machinery• If this is not done with determination and urgency to a tight

timetable, everything will get bogged down in diesel shortages• LNG supplied by road tanker is quickest solution before any

pipeline arrives in Coffs Harbour• 250 vehicles minimum; $7 million for a 20 tonne per day

liquefaction plant, storage, transport and dispensing equipment (CNG and LNG)

Page 28: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Case study: Gosford City Council (CNG)

FLEET CHARACTERISTICS

• Approximately 90 vehicles

• Municipal application (17,000 km/year)

• Turnover of 10-12 years (for new gas trucks)

PARTNERSHIP DETAILS

• Partnership commenced in May 2004

• Vehicles commissioned in February 2005

VEHICLE DETAILS

• 5 ISUZU NPR 400 gas vehicles

• Spark ignited, dedicated natural gas vehicle engine

• OEM supply and support

• On-site CNG refuelling facility

PROJECT ASSESSMENT

• Marginal greenhouse outcomes(around 18% reduction)

• 22% fuel savings (vs diesel)

• Excellent operational performanceand low commissioning effort

• Marginally positive financial returns(i.e. low annual kilometres)

• Excerpt from: www.vta.com.au

Page 29: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

LNG road tankers

Page 30: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action #4: Lobby rail duplication & electrificationNight trains to replace domestic flights

Page 31: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Action #5: Car pooling and use of buses

1. Oil price spikes and/or shortages may come unexpectedly

2. So car pooling has to be organised and tested before crisis hits

3. Introduce car-free days to see how buses work

4. Only practical experience can uncover problems and help developing adaptation strategies

Page 32: Peak Oil 2005-2008 Stay connected Matt Mushalik (MIEAust, CPEng) mushalik@tpg.com.au

Thank you

Matt Mushalik (MIEAust, CPEng)

[email protected]