This piece was published today on Crikey’s daily email. Also see my media release from this morning on the issue.
I have to confess myself quite flabbergasted by the extent to which our governments, oppositions, economists, planners and media claim to have been caught unawares by the rocketing global oil price and imply that no one could have seen it coming.
Not that I am surprised by their position – after all, they rely on ABARE. I have challenged ABARE at every Estimates hearing for two years and more as to their long-term estimates of oil price, and got the same answer each time - $40-45. Even as the price hit $100 early this year, they stuck firm to their projection. And yet ABARE continues to command more respect than the Association for the Study of Peak Oil (ASPO), which has been spot on in its forecasts.
But, just as the reality of climate change is only now sinking in, years after the science was settled and the urgency unquestionable, no-one can truly claim that they weren’t warned about peak oil.
One of my first actions after being elected to the Senate was to instigate a Senate Inquiry into Australia’s Future Oil Supply and Alternative Transport Fuels. In this Inquiry, everyone from Iranian oil guru, Dr Bakhtiari, to public transport groups, to the Councils of Western Sydney, to ASPO and many more, were all calling for the same thing: a rapid shift to mass transit, higher vehicle fuel efficiency standards, an end to the Fringe Benefits tax concession on motor vehicles and accelerated R&D into second generation biofuels.
The Inquiry’s conclusion which was tabled well over a year ago, involved Liberal, Labor and Greens in a consensus report making all these key recommendations. Then the old parties buried it. But, just as geosequestered CO2 will, it is now bubbling to the surface.
A few months later, I released a major publication, Re-Energising Australia, which presented a comprehensive policy platform to deal with the twin challenges of climate change and peak oil and build a better, cleaner, cleverer Australia. The considerable discussion this report garnered means it cannot have completely passed everyone by.
During last year’s election campaign, and as oil passed $100 early this year, I and many others repeatedly called for action to deal with peak oil and climate change together. And then, in my Budget Reply last week, I started with a reference to dwindling oil supplies matching the threat of Arctic Ice melt, and repeated my calls made in the 2006 Budget Reply, to use the surplus to oil-proof Australia.
The Prime Minister cannot legitimately say he has done all he can when he is making decisions now that will make the situation worse. Last week’s Budget allocated to rail a tiny 5% of what was given to roads in the next year. $78 million on metro public transport is whistling in the wind. The much-vaunted Green Car program doesn’t even start until 2011, after the next election. Infrastructure Australia and the Building Australia Fund only have to consider climate change at the discretion of the Minister and peak oil not at all.
To suggest that a price-watch program is all he can do, whilst waiting for Martin Ferguson’s energy security plan, is disingenuous. Particularly given that leaving the Minister for Coal in charge of resource planning is letting the cat guard the cream. Ferguson is already talking up liquefying coal to make a hugely polluting transport fuel.
As the Senate Inquiry said, no plan for peak oil should make climate change worse, yet this is precisely what the Rudd Government is on track to do, with the support of the Coalition, who want to exclude transport from the effort to reduce greenhouse emissions.
What about mandatory vehicle fuel efficiency standards and ending the fringe benefits tax concession for vehicles? What about tying subsidies to car manufacturers to increased efficiency? What about an immediate multi-billion dollar investment into mass transit, cycleways and redesigning cities?
The great thing about climate change and peak oil is that the solutions are the same for both, and that these solutions will lead to a better quality of life in cities, better air quality, a healthier population and a more connected community. The re-design of cities will see more walkways, bicycle paths and localism as we move to urban villages linked by rapid mass transit, and as we encourage businesses to take their jobs to where the people are. It’s a chance to get off the treadmill if we embrace it.
As Einstein said, you cannot solve a problem with the same thinking that created it. Those who now finally realise what we are facing should involve the people who saw the problem coming and listen to the solutions that we have advocated. Only then can we sweep aside the failure of imagination and the refusal to leave the fossil fuel age, and get on with building the post-carbon world.
obviously this is off topic but I wanted to pass on my condolences to Bob re the Wielangta State Forest.
I hope that it will be some consolation that when the final analysis is rendered the account he gave will be remembered as truly heroic.
Perhaps I shouldn’t say this… but I really can’t help thinking “bring on $200/bbl”. Or $400. Maybe, just maybe, that incredible wake up call will make these people realise their whole world view is based on an illusion. Public transport will be far quicker to supply than CTL, after all…
It’s almost worst case scenario, but I have so little hope left that logic, reason, and evidence will ever work in this country.
PS - why do we even have a ‘Minister for Resources *AND* Energy’, as if they were inherently related? It merely underscores the myopia that afflicts this and the previous government: energy=burning-something-we-dug-out-the-ground.
The trade with Oil is not very old. If the prices are so high, what will the future be? We should all start to force the gasoline industries to do more research with alternative energy.
But the economists told them cheap oil would be forever!
Some useful quotes from a more switched-on economist, JK Galbraith
“The only function of economic forecasting is to make astrology look respectable.”
“Faced with the choice between changing one’s mind and proving there is no need to do so, almost everyone gets busy on the proof.”
“All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
[...] Oil price rising, how surprising « GreensBlog - the official blog of the Australian Greens Senators I have to confess myself quite flabbergasted by the extent to which our governments, oppositions, economists, planners and media claim to have been caught unawares by the rocketing global oil price and imply that no one could have seen it coming. [...]
The oil price. It’s been poorly predicted, I agree. Back in 1999, the analysts’ talk was of no floor above $5 a barrel.
Here’s one geologist’s view.
On Q&A the other night Rudd managed to avoid using the words peak oil.
I have suggested previously that rationing
planning is urgently needed.
The coming government access card for
amongst other things medicare could be used to ration petrol.
Swipe the card at the service station and
your buy amount is deducted from your
yearly ration. Could easily be used to buy
unwanted ration from other people.
The reaction I have had from pollies is hmmm. Oh well.
For politicians to say they didn’t see any of this coming is almost criminal. There are several politicians including Mike Kelly who know all about Peak Oil and there have been studies done in Queensland and South Australia.
I’m just a simple bloke from the ‘burbs of Sydney and I would call myself 100% PO aware. How can it be that these people with all the access to information that they have and all the backroomers to pass it on that they knew nothing. I am ashamed of these so called representatives of the people. I hope their inaction comes back to bite them with a vengence!
Keep fighting the good fight Greens. Get in front of a camera and talk, talk, talk about Peak Oil. Remember it’s not a theory, it’s reality.
“How can it be that these people with all the access to information that they have and all the backroomers to pass it on that they knew nothing.”
Well, some people claimed they never knew that Hitler was going to try to conquer Europe and murder everyone, or that they never knew tobacco would give you lung cancer, or that they never knew Agent Orange would give you deformed babies, or that they never knew the West was lying about WMDs in Iraq, or…
There are lots of things which people know but choose to ignore because acting on them would be inconvenient and difficult.
Also, government is made up of a lot of people, and large groups have quite some inertia. Have you ever gone to the pictures in a group of a dozen and then tried to get them to agree on which movie to see? Or tried to sort out the bill after a dinner party at a restaurant? Now imagine that with 225 federal and 1,000 or so state politicians… and a more complex decision than what movie to watch or who had the caesar salad.
Great Galbraith quotes, Kiashu!
Furious as we may be over the issues surrounding the price of oil and the fact that the dual problems of climate change and peak oil are solvable with the same solutions, the reality is that neither governments nor corporations will allow anything concrete to be done about reducing our reliance on oil until the very last drop is used or until climate change bites so hard that they have no choice but to be seen to be doing something (by which time it will be way too late). What [in particular] oil companies have at the moment is a rising demand for an increasingly scarce commodity which means higher profits for them. Trying to stop oil usage at the moment would be as difficult as telling fosickers to drop their gold nuggets and walk away from a gold rush.
Furthermore, when they (oil companies, car manufacturers, etc) decide that the time has come to finally let go of their black gold, they don’t want a cheap, available-to-all, no-profit solution conceived and implemented by someone other than them. They have a captive market and they aren’t going to give it up easily. At some point, I think there will be a contrived “crunch day” when there will be a mass release of one or more solutions of their own devise. Maybe a hydrogen car, maybe some super efficient solar vehicle, probably both and probably something else as well.
One thing is for sure, though; however these solutions manifest themselves, the companies that produce them will make damn sure that Joe Enduser is charged good and proper for the privilege of their use/ownership. Whatever they come up with may or may not be the best solution(s) to the problems of climate change and peak oil but they will be enough for the problems to have been seen to be solved. The real solutions (mass transport, bicycles, restructuring for higher density living, etc) may also be profitable but not necessarily profitable for them and likely not as profitable as keeping people in personal transport over large distances.
For my money, I will take the real solutions any day and I sincerely hope that they come to fruition. In the mean time, I hope that the people doing the good work of trying to steer us in the right direction, like the Greens, have the artillery to deal with these kinds of issues.
Going solar electrical immediately may not be the carbon friendly way
Mobile phones with no batteries, cordless electric drills which work harder and longer, full sized high powered cordless vacuum cleaners, these are some of the appliances now on the market around the world but not yet seen in Australia. This is the result of a break through in electrical energy storage technology called “the super capacitor”. Super capacitors never need replacing and charge and discharge very quickly and have very high energy storage capacities for volume and increasing with development.
There has never been any difficulty in generating renewable energy it has been the difficulty of storing electrical energy with current technology to iron out the vagaries of nature’s erratic energy delivery pattern and to supply instantaneous load currents which super capacitance technology fulfils. By building super capacitance into our day to day household appliances we would effectively bit by bit increasing the electrical storage of the electrical supply system and when multiplied by the millions of consumers this would amount to a huge electrical storage capacity. Such capacity would enable the introduction of smaller more efficient renewable energy home packs a little later on. Also, as this new technology works at a lower and much safer voltage, it would be an opportunity to phase out the current household 240VAC distribution system that we now use for a 50 VDC system which is a better match to most new home technology.
Current home power generation such as solar and wind should not ignored but taken up by those in the community that have the means and enough expertise to manage. For industry the recent installation of a industrial capacity wind turbine by a Tasmanian poultry processor is positive step in the direction of the future, generate and use power in the same location it has the least losses and I have no doubt super capacitance will further use of these types of installations eliminating battery banks.
It should always be remembered, upgrading the passive energy performance of buildings is the greatest energy saver of all and if implemented in a progressive way carbon neutral. By upgrading building performance the high users of energy are reduced. This further enables home renewable electrical energy generation viable.
[...] denial about Peak Oil and the global energy crisis. I’m not surprised to have stumbled upon this blog post by Green’s Senator Christine [...]
[...] Christine Milne, (Australian Greens), interviewed recently ..just as the reality of climate change is only now sinking in, years after the science was settled [...]
I really hear the price of oil is going up due to speculation, not so much over supply and demand. (Similarly true of other commodities like property and food.) “Peak Oil” and supply issues are the pretext - definately substance to it - but the price is far exaggerated.
Some interesting comments made here:
http://www.accuracy.org/newsrelease.php?articleId=1719
I have hear similar points elsewhere recently.
“All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
Thanks to Kiashu for the Galbraith quote. If Kevin Rudd had any ambition to elevate himself to the status of “great” then he would recognize that “peak oil” and “global warming” were in fact connected and he would immediately strive to see if solutions mooted elsewhere could be applied in Australia. Unfortunately for him, and for us, he does not seem to have any such delusions of grandeur.
However in the US those with ambition enough to want the job of president have spoken out. Several politicians have outlined a plan for the future whereby America can be weaned off imported oil and can encourage the development of green energy sources without resort to large centralized coal or nuclear power stations.
Step one in the process of solving this problem in the Australian context is to firstly recognize what the problem is. Step two is to draw up a plan of attack based on national need not on the relative strengths of vested interests.
The US plan is to electrify transport and to connect cars to the grid to help it develop into a more efficient, reliable and diversified broadband controlled network. This plan is ambitious but it might just work.
There are two very important predictions made by two prestigious American companies that support this plan. The GM Company predicts that its plug-in Chevy-Volt will cost about one tenth as much as the petrol equivalent to run and theXcel Energy power company predicts that it will be able to pay the owners of plug-in cars from $2,000 to $4,000 per year for access to their plugged-in car.
The US plan needs to be checked out urgently. With oil prices doubling every two years and global warming threatening us all, no prime minister worth his salt should say he has ‘done all he can’ without checking it out. The plan may be the way forward. It may have flaws but if it is good enough for the US it should be worth checking out. This is perhaps Kevin Rudd’s chance to rise to the status “great leader”.
[...] Australia, as Greens Senator Christine Milne pointed out recently, our National Goverment has been relying on advice from ABARE (Australian Bureau of Agricultural [...]
With all due respect to Christine, the Queensland Greens did a wonderful job denying Peak Oil way back in 2003 when I first bounced it around the party room as an election issue. The QGs were no more likely to rattle cages than anybody else!
I left in disgust, and the Party was actually split….. but let’s not go there.
As I have said many times elsewhere on these blogs, Peak Oil has no solution, which is why it’s ignored. Til now. I alwayse knew it would take the shit hitting the fan to get some action, and here we are…
I started a forum for Peakniks a few years ago, and we have global networks on everything ‘energy’ (http://groups.yahoo.com/group/roeoz).
Here is a post that came up from GERMANY last night:
Morning All….
Is life about to get more interesting!! Fatih Birol is the head of the
International Energy Authority.
>>>>>>
Hi guys
Just to let you know, the main German channel 2 (ZDF) has just 30 minutes
ago screened and interview with the Energy Watch group guys from Munich and
Fatih Birol in preparation for the September/October report and a
documentary announcing Peak Oil to the public.
FB: Quotes: “I hope there will be no supply shortages.”, “There is no reason
to panic.”
An associated documentary states:
“Petrol is expected to rise to $20/litre and only affordable by the rich.”
“Crude will rise by 30% a year from now on.”
“Barclay’s capital expert confirms $200 oil prediction soon.”
“Oil is running out and nobody is prepared.”
“This is the first time the IEA did research itself and not accepted oil
industry figures and they confirm the worst fears.”
Things will get more interesting.
To Colin @16, of course the price of oil has gone up because of speculation. And why is there speculation? PEAK OIL that’s why!
I don’t think people (here and elsewhere) have ANY idea of the urgency of the problem. Here we have Martin Ferguson worrying about a $25 billion deficit by 2015, when if fact it’s highly likely it will be impossible for us to import ANY oil, at ANY PRICE, whilst we are floundering with barely 10% of what we currently consume………. and when is this likely? 2012.
Don’t believe me? Read this:
http://anz.theoildrum.com/node/3657
Ted @ 17 wrote: The US plan is to electrify transport and to connect cars to the grid to help it develop into a more efficient, reliable and diversified broadband controlled network. This plan is ambitious but it might just work.
With coal and nukes? And for how long? Ever heard of Limits to growth?
If we replaced oil energy with nukes, Uranium would last SIX YEARS. Globally.
Peal Coal is expected by 2035 at the latest.
And roads are made of oil… known as bitumen.
Wasting more resources on cars is nothing short of criminal.
So the geological reality of the limited supply of oil is starting to have sufficient impact that even the politicians are reacting. There is much sense in many of the comments posted here but there is also nonsense. Climate change has been initiated by the global burning of fossil fuels to provide the energy that has driven the growth of industrial civilization. Society will react as best they can to the increasing scarcity of oil because they have little alternative. But society can do little to mitigate climate change even if there were global agreement to reduce greenhouse gas emissions. We are going to have to adapt to what industrial civilization has already done. That will require understanding rather than the misleading view that we can control our climate.
Peak coal 2035 at latest! Interesting. I heard 2070 was the earliest date for peak coal and even the 2070 date was controversial since industry says we have centuries before peak coal.
Can you send anything at all through supporting the 2035 date as the “latest” date for peak coal?
Despite our amazing capacity for destruction I doubt in 25 years we could reach peak coal.
If all fossilised energy stores were released the planet would be transformed far beyond what the most gloomy anticipate this century. I hear we would be looking at a 20C or more rise. It will be extremely challenging to locate and burn ALL the fossil fuel.
I am outraged Australia isn’t using its great surpluses to end our domestic reliance on fossil fuels within mere decades. Every year we delay commencement of that quest, the task will get harder in an exponential way and will take longer to achieve by much more than the start delay.
Greetings fellow ‘living will envy the dead’ co-habitants.
The Greens are not the solution, but part of the problem because they support the status quo; How ? By ignoring ex-green members who warned of and wanted to make central party issues about Peak Oil and the ramifications, so Christine Milne’s claim (on behalf of The Greens) of 2 years pressure is laughable.
Did you know ‘we’ (Australians) had an National Energy Conservation Program ‘to create public awarness of the need to conserve liquid fuels’ in 1979 ?
Peak Oil was known then, but who squashed it ?
I like Barry White’s suggestion of Medicare Card energy allocations; Poor people (who cant afford a car) could ‘sell’ their allocation to the highest bidder, improving their quality of living by supporting the organic foods industry selling nurturing foods, cutting the nations health bills by the hundred of billions of dollars.
Turnpike suggests some ‘super capacitors’, that solar power is not the best choice; so what is the embodied energy of these super capacitors … what is the pay-back time when they pay for their cost ? We know roughly what they are for PV’s
Colin suggests speculation is driving up fuel costs and he is half right, only that those who have speculated in oil search and extraction can’t find anymore or it cost more to extract it than it will bring on the market place.
Simply speaking, would you sell me a watermelon for $1 if it cost you $3 to grow, water, harvest, store and transport ? No.
Its not so much that we can say no to energy from fossil fuel, we are addicted ! Try it, stop driving today, don’t buy food, pay for water, cut yourself out of the consumer loop right now … impossible you say ? Well within one generation, we will see consumption forcibly drop by at the very least, 70% !
Ted 17 says GM will produce electric cars and all will be OK, but what about the embodied energy to manufacture those cars first / where will the energy come from to make those cars ? Fossile Fuels ! [The USA new car market is around the order of 16 million a year]
We use 86 million barrels of oil a day, to get that ‘same’ energy from electricity we need 6,240 electricity power stations (all run on either coal, gas and yes, oil; biofuel would be less than 0.0000000000000000000000001% - what about blobal warming then ?)
Or about 5 trillion 500 million photovoltaic / solar panels;
Or 240 Three Gorges Dams
Or 4 trillion 800 million acres of corn for ethanol (how do we harvest it etc … surprise, surprise Fossil Fuels again)
Or 3,120 nuclear power plants (which are proven to use more energy to build commission, decommission than the entire energy they will create - forget the nuclear waste)
Does anyone have the answer ? Yes, on http://www.energyefficienthomedesign.com.au (my website) I can provide you - free -with some of the details of the energy bus that will hit you.
Best of luck
Daniel Boon
Re Peak Coal, try this http://www.energybulletin.net/29919.html
Daniel Boon……. you have all the answers? The mind boggles….
Mike you are a classic. He said he can provide *some* of the details. No doubt he can. No where did he say he had *all* the answers.
Please do send on the basis for your case for 2035 as the latest date for peak coal.
The trouble with making wild statements is that if you can’t justify them then it reduces the credibility of *EVERYTHING* you say.
French Farmer Youth fight petroleum hikes: riot police
May 28th, 2008
In Lille, France, about 40 youths calling themselves “Jeunes agriculteurs” (Young Farmers), pulled a tractor through the town on a rope to educate the public on the impact that petroleum hikes are having on food production and farmers. More robust simultaneous actions in other French towns came into conflict with police…also in Bulgaria. And all-night gas queues in Taiwan.
More at http://www.candobetter.org along with other articles fed from the French Press and more Australian news about housing, oil depletion, biodiversity and democracy
Apologies Mike S and Bobo. That comment of Mike’s went into our spaminator for no apparent reason. Rescued now.
Yesterday, Crikey spoke with Senator Milne, who put forward a far more coherent proposal to address this [Peak Oil] than we’ve heard in this debate from either major party.
Coal outlook
I don’t find Steve’s figure of 2035 for a PEAK too far out at all. China is predicted to peak around 2025-27 by Seppo Korpela in an article I discuss below. USA is predicted to peak around 2050. But it is hard because we keep using more and more of the stuff as we run out of everything else.
You have to remember that the outlook will vary depending on what rate of economic growth you are using. The last eight years have seen a 32% reduction in coal reserves to production. To me that does not look real good.
Year Coal: Reserve to Production estimates
1998 218
1999 230
2000 227
2001 216
2002 204
2003 192
2004 164
2005 155
2006 147
Reserve to production, R/P decrease for world coal over the last nine years.
Source: BP Statistical Review of World Energy, Various Editions.
The US and Australia are digging the stuff out as fast as they can and China - the biggest producer in the world (Australia is only the biggest exporter) recently became a net importer, mostly from Australia and Indonesia.
In 2005 I co-edited McKillop/Newman, The Final Energy Crisis, Pluto Press, UK which had an article by Gregson Vaux, estimating how long coal might last. It was the first of its kind. He ran three different scenarios. They were quite useful: At zero growth world coal would be gone by 2158. At 1.5% growth, it would be gone by 2080. At 2.2% growth, it would be gone by 2071, and at 3.1% growth, it would be gone by 2062.
Pluto is about to bring out a second edition with ten new articles including a much more complex article by Seppo Korpela (Ohio Univ) using hubbert peak methodology and other methodology to predict peaks and exhaustions for coal world wide and country by country. Importantly Prof Korpela has done a first in plotting Chinese oil peak. Uh oh, China has modernised her coal production big time and has accelerated her production a LOT.
The bottom line is the rate of growth, which is obviously compounded by the way that coal is already filling in for oil and gas. (Don’t forget gas isn’t going to last very long; we have been substituting it for crude since the 1970s, but you have to look closely at the statistical definitions of oil and crude in EIA and BP stats to realise this.)
And, of course, in ‘rate of growth’ lies our potential salvation because if we were all to work (and produce) half as much and to therefore draw down half as much, we would have so much more personal time and so much more time to find more energy, and to learn to live very very happily with less. The only people who really couldn’t live with that are the very rich who seem to need to dominate. Organised withdrawal of labour sounds to me like the way to go. No doubt it will not be made easy for us.
Korpela’s article includes a history of coal reserve estimates and they are almost continually revised downwards, with only India reporting a revision upwards in recent times.
The book with Korpela’s articles on coal and on petroleum, plus others on terra preta, nuclear fission, nuclear fusion, peak soil, Latin American oil, and the future of Australia, Japan, France and North Korea among others, will be on sale in September 2008 as Sheila Newman, The Final Energy Crisis, Pluto Press, 2008. Hope you will all run out and buy it. :-)
Just to repeat - it all depends on rate of growth.
Sheila Newman
http://www.candobetter.org/sheila/
Thanks for your valued input Sheila. As Pr Bartlett said, “Humanity’s greatest failure is its inability to understand the exponential function”.
Any exponential growth has a doubling time easily calculated by dividing the number 70 by the percentage growth. Thus 3.5% growth gives a doubling time of 20 years, 10% growth a doubling of 10 years and so on. This is simple maths, not a theory!
Imagine a test tube with one bacterium in it. If this bacterium is able to divide into two in one hour, then after two hours there are four, after three hours there are eight…. soon there are over a thousand, and you STILL can’t see them.
Once the test tube is half full, and there’s still plenty of elbow room, just how long will it take to fill the test tube? JUST ONE HOUR!! And if the bacteria allow this to happen, then in the next hour they better find a whole test tube……..
We only have one Earth, and we are in the middle of the very last doubling. There is no way known we can have 13 billion on this lonely planet, so the test tube must be at least 3/4 full.
This seemingly sudden ‘running out of everything’ and ’supply cannot meet demand’ is a SURE SIGN we are in deep shit.
As far as I am concerned, the very first thing we must do, is acknowledge this simple truth.
It may be simple maths, but I managed to stuff it up anyhow! 10% growth actually gives a 7 year doubling time, not 10….!
Ok Mike, thats a good article. But it doesn’t support “2035 at the latest”. It better supports “possibly as early as 2035″.
The fascinating thing about this concept is it resonates so much more strongly (than does climate change) with the original core Greens principles of living within your means.
It seems to me that Greens really struggle with climate change and they are split by it. Some truly get it and elevate its importance, but the hearsay evidence suggests some Greens care more about kangaroo’s, sheep, whales, reef and habitat than climate which suggests they don’t really fathom climate change at all.
The most striking thing is that imminent peak coal actually demotes climate change from being the key reason to reduce use of fossil fuels.
Its starting to look like the most powerful argument (i.e. most likely to succeed) for government sponsorship of renewable generation has nothing to do with climate change at all. It has everything to do with expected future cost of burning what will within decades become scarce and incredibly expensive (by todays standards) coal.
Real expected cost is much more concrete and comprehensible (to a hard nosed economist) than temperatures maybe rising somewhere between 1 and 6 degrees.
This means the argument six months ago about “the only reason to reduce fossil fuels is climate change” is being turned on its head. To an economist “the only reason to reduce fossil fuels is fossil fuels will get more expensive than other options”. That is the argument that will win over the climate change skeptics.
It might also be the argument that truly unites all Greens much more powerfully than what are unavoidably somewhat nebulous future climate concerns.
Actually, it says “the Energy Watch Group, which reports to the German Parliament, found that global coal production could peak in as few as 15 years.”
That’s 2023……
And did you fo;;ow the links? like http://www.richardheinberg.com/museletter/179
Going back to the allegory of the test tube, what you have to understand is that if the doublings occur every 30 years (say), and we are half way through the last doubling (with the test tube at 3/4 full) then we have no more than 15 years to get our act together.
Mu gut feeling is we have less than that. I feel I have a really good handle on this whole limits to growth issue, and yet, I am gobsmacked at just how fast everything is going pear shaped, from the price of oil, to the drought returning, to the price of food, fuel shortages in China, Russia peaking last year (that wasn’t expected for some time)…. you name it.
Bobo, the problem I think you allude to is the lack of triple bottom line accounting amoungst economists. The costs to the environment continue to be externalized and discounted. I won’t even touch on the lack of social accounting.
So do your “real expected cost” takes into account all the externalities? Of course not, they are externalized. I think it was Chief Seattle that said some 120 years ago, “when will we realize that you can’t eat money?”
Anyway I can’t see an economically rational argument uniting the Greens, can you? Since many of us know that “economic rationalism isn’t”. How can the ‘dismal science’ be worthy of the name, when it fails to take into account major relevant parameters? This is why ABARE gets it wrong more often than not, single bottom line accounting, but that’s another post.
mcfarm the issue that I suggest might unite the Greens is not economic rationalism. It the concept of living within our means. If we have centuries of coal then this concern is not properly invoked. If we have mere decades then it comes to the fore.
My point really is it we may not need them to take into account externalities in order to win over the “rationalists” if coal is $1000/tonne say. Once its more expensive on a single bottom line then its game over by universal agreement and peak coal creates that prospect. If they can’t or won’t understand triple bottom line and it turns out single bottom line is powerful enough then it isn’t important for them to see the more subtle things that elude them. The argument is won regardless.
The question is really what is the easier argument to win. Some people are simply wired in such a way that social and external costs will always be weighted near zero by them. Such people are overly represented in positions of influence since their “take no prisoners” attitude is rewarded by our society’s systems of promotion. Trying to convince them of your full set of values will always be fruitless. To negotiate you need to know the enemy and hit their sensitive parts. Simply expecting them to buy your value set is sadly too naive.
Mike regardless of what you say “2035 at the latest” simply doesn’t stand up. Right now “2150 at the latest” holds more convincingly. That doesn’t require you for one second to expect it to be 2150, it is merely requires that an argument of sorts can be sustained to support a 2150 date. Such an argument exists, and you don’t need to buy it to agree that it remains a possibility.
The trick really is to understand the difference between the concept of an expected date and the extreme upper end for the possible range of dates. It is easy to expect 2035 while conceding that 2150 is not impossible.
A supportable statement that perhaps you might agree with might be:
“there is a alarmingly strong chance that 2035 might be peak coal”
Such a realisation should invoke contingency planning amongst TRUE economic rationalists.
Bobo, I don’t believe myself as naive to know that a paradigm shift happens occasionally. Ansd I hazard a guess that we are in one right now. But that aside, whatever it takes to get to the desired objective? Isn’t that the end justifying the means?
As for knowing the enemy? I have seen the enemy, and he is me! (paraphrasing somewhat)
Oh, and contingency planning? With externalities taken care of, that’s gotta be nukes. Let’s keep the centralized means of production and control. Then we will create hydrogen fuel cars to capitalise on the centralized distribution of fuel and synergize with the nuke power plants. Oh and it’s real clean too, the by product being oxygen and water. That’s gotta be good for the planet, we need both more oxygen and water to counteract the effects of climate change.
Now, just gotta find a use a use for radioactive by-products with a half life of 500,000 years……………..
Their means will justify someone else’s end, and we play their narrow ruled game at our peril.
Being naive about the likelihood of them ever buying your particular set of values says nothing at all about your capacity to detect a paradigm shift. Naivity is not generally a fundamental aspect of one’s nature. It is instead more narrowly related to particular fields and is little more than a consequence of a lack of experience in that field.
If it is one’s nature is to gain no experience at all then and only then could one be described as broadly naive.
I can be naive about the dangers of certain nutritional choices while being highly sophisticated about how to build a bridge.
In these days of specialisation and exponential growth of knowledge we are all naive about many aspects of human knowledge and experience. To imagine we are not is hubris.
In the end though if you believe you can win them over to placing the same weightings as you on your value set then nothing can stop you trying. As an observer of that process I would simply form the view that you could achieve greater progress towards your goals in a different way and leave it at that.
I merely said they would understand they would need a contigency beyond coal. This is fundamentally necessary to them adopting renewables. If they think no contingency beyond coal is necessary then nothing happens. Once the need is understood then the goal becomes directing their action towards your preferred solution.
It is absurd to imagine we should never want them to understand they need a different solution to coal. Them realising coal might be unreliable is the extent of what I suggested. Its about opening a door.
The question of which solution gets adopted in place of coal is an entirely more complex one. But we need that argument to proceed as rapidly as possible especially as renewables clearly have at present the upper hand in terms of timeframe to implement and public acceptance.
You talk about the ends justifying the means. But I don’t see how that criticism has any validity in this instance.
If in the end they agree with your course of action, would you prevent them taking your course of action if you thought their particular reason for agreeing with you was flawed?
Lets say you are in a dengue fever zone and you wish to close the doors to prevent mosquitoes getting in, but someone else believes mosquitoes don’t exist but agrees to shut the door to keep out bunyips. Will you refuse to close the door?
This has nothing to do with the ends justifying the means. Ultimately everyone is entitled to reach a consensus by their own means and justification. This involves no moral or ethical dilemma whatsoever.
It’s plainly obvious you two have no idea of physics and mathematics.
Mike, I can’t draw that conclusion from what I am reading and I have studied both maths and physics with considerable distinction.
Your own mathematics suffers enough. Something about glass houses and stones comes rapidly to mind.
The Physics goes something like this: the easiest resources are found and exploited first. They take little energy to discover and extract, typically 100 years ago, for every barrel of oil invested, 100 barrels could be had. Today this is about four or five. Post Peak Oil, that number crashes, and eventually can go negative. There’s a 150 year old oil well kept in a museum (all under cover!) in Pennsylvania which still pumps. It’s been kept merely for the preservation of its historic value. To extract a few cupfuls of oil a day, it uses a few gallons of diesel.
The real point of Peak oil/coal is NOT when you run out, it’s the point at which it’s no longer possible to grow supply. EVER. No matter how much money and energy you throw at it. 2150 might be when coal runs out (if EVER, actually!) but Peak Coal is near.
If you want to see how mathematics are used to predict peaking ‘anything’, go here http://www.theoildrum.com/node/3673 where methodology for the peaking of Natural Gas is explained….
For more scientific analysis of Peak Coal, see this brand new article by Richard Heinberg, Senior Fellow of The Post Carbon Institute and author of Peak Everything, The Party’s Over: Oil, War and the Fate of Industrial Societies, Powerdown: Options and Actions for a Post-Carbon World, and The Oil Depletion Protocol.
http://www.theoildrum.com/node/4061
From Crikey
15 . Oil Futures part 2: A series on oil, the future, and you
The high price of petrol today is causing discomfort among motorists. So much so that our federal politicians have spent a week haggling over whose scheme is best suited to knocking a few cents per litre from the pump price.
But in a world where oil is increasingly scarce, where the security of supply remains a problem, and where the environmental cost of using fossil fuels to power your car will be factored into the pump price, is that the right response? What are the long terms solutions to our oil dependence? And is this the beginning of a new era of high-priced oil?
Crikey asked a panel of experts to answer questions on the good old days of cheap oil, what the politicians should really be arguing about, and how our economy will look when petrol costs many dollars per litre.
Today, former oil, coal and gas industry executive Ian T. Dunlop steps up to the plate.
Have we entered a new energy era of high-price oil? Are the days of $AU1/litre petrol gone for good?
There is little doubt we are now in a new high-price energy era. On the demand side, the rapid growth of world population, all understandably aspiring to higher standards of living and consumption, is putting enormous strain on the global environment, to the point that we are probably reaching the “Limits to Growth” forecast long ago. We have reached limits before, but managed to get around them with technology and short-term fixes, normally at the expense of the environment. This time it will not be so easy.
Peak oil does not mean we run out of oil – rather it is the point at which supply cannot expand to meet increasing demand because of technical constraints in global oil reservoirs. We are probably approaching the peak of global supply. We may have already passed this point, or it may be some years ahead; the exact date is less important than accepting the principle and planning to handle it.
Passing the peak raises the question of who will get the available oil? At the moment that is being settled by who can pay the higher prices, but that will not be sustainable – it is already causing major societal unrest around the world, let alone in Australia, as witnessed by protests around Europe in the last 24 hours; some form of allocation system will become necessary, as occurred in the first oil shock in the 1970’s.
Oil prices may drop temporarily, for example, if we move into recession, if increased oil discoveries result from the higher prices leading to more exploration, if geopolitics intervenes as it did in the 1970’s etc., but the general price trend will be inexorably upwards.
The cheap oil has been found and the days of A$1 per litre have gone for good. It is misleading to pretend otherwise.
As a policy response, how useful is lowering a fuel excise or tinkering with the GST in combating the rising price of petrol, both in the short and long term?
It is completely futile. Prices are determined by the international market and there is nothing our government can do about that. Five cents per litre is irrelevant to a market where prices may fluctuate by several dollars, and Fuel Watch is fiddling at the edge of the problem. We actually need prices to rise to discourage the use of oil. This may seem hard, but unless we face up to that reality quickly, the problem will become far worse.
Unfortunately, because we have not been planning for peak oil, there is going to be much hardship, particularly among the less well-off who are dependent on car transportation, road freight operators etc. There is certainly a case to provide assistance to those most exposed, to ease the transition to a high-priced energy world, but it should be via specific targeted measures, not wasting money with across the board attempts to drop petrol prices, which are miniscule in relation to the size of the problem.
The Opposition attitude to this issue is totally irresponsible; they were briefed repeatedly on this looming problem over the last few years and ignored it, assuming that the resources boom would save us. They have left Australia extremely exposed and have to take responsibility for much of the hardship which, unfortunately, lies ahead. The least they can do is to stop petty political point scoring and back up the new government constructively in addressing what is the greatest challenge to confront Australia, and the world, in decades.
The Rudd government were elected with a mandate to address major challenges such as energy security and climate change, which the Howard government were incapable of doing. It is most concerning that the Government have stooped to become embroiled in cheap political infighting when we face a major long term emergency, rather than providing the real leadership we so urgently need.
The only Australian politicians to understand the real challenge we face are Senator Christine Milne from Tasmania, Alannah McTiernan the WA Infrastructure Minister and Andrew MacNamara, the Queensland Sustainability Minister
What sort of policies should a nation like Australia be developing to cope with high-priced oil?
First, an honest, public, acknowledgment by the government and business leaders of the real challenges we now face
Second, urgent education campaigns to inform the community and gain support for the hard decisions ahead
Third, establish an emergency, nation-building, response plan to establish the economy on a low-carbon basis, minimising the consumption of oil, a 21Century version of the 1950’s Snowy Hydro Scheme, but much bigger and broader.
The components would be: first, major focus on energy conservation and energy efficiency; second; large scale conversion to renewable energy; third; major investment in efficient public transport, rail, bus, cycling etc and an immediate halt to investment in freeways; fourth; rapid phase out of high carbon emission facilities such as coal-fired power stations unless carbon capture technology can be introduced within 10 years; fifth, urgent introduction of high-speed broadband to minimise travel and improve communication efficiency; sixth, continued investment in low-emission technology; seventh, rapid reform of the tax system to remove perverse incentives which encourage oil use and environmental degradation.
Can you sketch a picture of the Australian, or indeed the global economy, when petrol is vastly more expensive than today and rising, considering things like food, infrastructure, the family budget and inflation?
We are facing major changes to our lifestyle. It is not just high oil prices, but the overall question of the sustainability of humanity on the planet as population rises from 6.5 billion people today to 9 billion in 2050, all aspiring to an improved quality of life. New technology will undoubtedly come to our assistance but that will not be enough. Conventional economic growth in the developed world will be set aside in favour of a steady-state economy where the emphasis is on non-consumption and the quality of life rather than the quantity of things.
There will be far more focus on local food production, opening up new opportunities for rural areas, cities will be re-designed using high-density sustainability principles to avoid urban sprawl, and integrated with public transport to minimise energy consumption. Work centres will be de-centralised. Rail, powered by renewable energy, will become a major transport mode for both freight and high-speed passenger traffic. Air travel will reduce unless new technology develops jet fuel from, for example, bio sources, and even then emission constraints may limit its use. The internal combustion engine will disappear in favour of electric vehicles for many applications. Cycling and walking will become major activities for both work and pleasure – obesity and diabetes will decline!
The challenge we face is enormous, but it is the greatest opportunity we have ever had to place the world on a sustainable footing, for what we are currently doing is not sustainable. We must not waste this opportunity, but it needs far bolder and broader thinking than we are seeing at present.
Ian Dunlop was formerly an international oil, gas and coal industry executive. He chaired the Australian Coal Association in 1987-88, chaired the Australian Greenhouse Office Experts Group on Emissions Trading from 1998-2000 and was CEO of the Australian Institute of Company Directors from 1997-2001. He is Chairman of the Australian National Wildlife Collection Foundation (CSIRO), and Deputy Convenor of the Australian Association for the Study of Peak Oil.
Dunlop gets it right when he says:
“… establish an emergency, nation-building, response plan to establish the economy on a low-carbon basis, minimising the consumption of oil, a 21Century version of the 1950’s Snowy Hydro Scheme, but much bigger and broader.”
Then his very next paragraph is right on the money.
This will never be achieved by fiddling about with policy settings. It needs massive funding backing from government.
Mike, in 44 the conclusion I disagreed with was your baseless assertion in 43 about the mathematical skill of the commenters. There is simply insufficient evidence for that claim.
Your posts in 45,46&47 suggest to me its possible you didn’t comprehend what I was actually disagreeing with.
If we move instead to your actual peak coal arguments then it seems fair enough to say coal really could peak by 2035 (lets call this view A). Your view however that 2035 is the latest possible date for peak coal (lets call this view B) is exceedingly weak.
View A and View B are vastly different propositions. Predicting upper extreme limits of a variable is a far less certain proposition than estimating an expected value for a variable.
You show a repeated pattern of making extreme claims with scant regard justifying the precise claim you made. When asked to justify your extreme view you offer a series of arguments that only serve to justify a far more moderate view than what you offered.
It is false logic to provide an argument that supports view A as a proxy of support for view B. Its a kind of bait and switch technique and is dishonest form of discourse that is mostly meant to be confusing and probably just backfires by confusing you more than anyone else.
The most likely truth is you couldn’t possibly know enough to make any certain claim about the latest possible date for peak coal. Make claims about knowing such a date is either brave or stupid, I am sure we disagree which of those applies here.
Well you’ve lost me John….. I’m not predicting anything at all, merely passing on information.
When I mentioned 2035, I was relying on my [poor] memory, and when I checked and actually posted the source, that source claims peak coal could happen in 2023…… Did you read the source and follow the links there?
I’ve just written up the Australian Export Land Model on my newish blog, http://damnthematrix.wordpress.com
Bobo, here are a few of the flaws in your thinking
- you claim @34 that the only reason hard nose economists will be won over to climate change is through price, i.e. fossil fuels will be more expensive than green alternatives therefore they will choose the cheaper option.
First problem is that the cheaper $ alternative may not be the ‘green’ alternative if costs continue to be externalized. Being far from naive, in response I sarcastically used nukes as an example, but perhaps the food and/or cellulose to ethanol is closer to the mark. It is now ‘cheaper’ to produce liquid fuels from plants with oil over $125 a barrel, but at what costs to people and the environment?
Second problem is that winning an economic argument over price, does not make converts to climate change. This so obvious a failure in logic that I hardly thought I needed to point it out. It simply makes the losers of the argument followers of the economic bottom line or dollars.
That said, with peak oil past, present, or near future, the Greens won’t have to press this price point home either. The increasing costs of oil are already evident to all at the bowser. This price point is not lost on the hard nose economists who are doing the contingency planning. What needs to happen globally is for economists and planners to factor in the social and environmental as well as dollars. This is slowly gaining momentum and I believe this to be the paradigm shift to which I refer.
The above errors are then compounded by your thinking that this single bottom line argument has the potential to “truly”unit the Greens. Well all I can say is we disagree on your unifying Greens theory.
Bobo, I agree with living within our means, but @38 is the first time you claim this ground. Prior to this @26 you are ‘outraged’, justifiably I might add, by Australia not using her great surpluses to end our domestic reliance on fossil fuels. Then @38 claim that at $1,000/t it’s ‘game over’ for the coal industry. I agree it will be game over, but my point about winning the single bottom line argument not guaranteeing a green outcome still stands.
So again @38 the ‘easy winning of the argument’ does not guarantee a good outcome. I claim that the only way to effect lasting change is through a change of values, and that we need to keep plugging away at this.
The Rudd govt is in power in large part to a shift in values. Away from ‘work choices’ away from pulp mills, away from simplistic economic solutioneering. The Rudd govt is in power, in large measure, due to the many years (decades) hard slog by the Greens against the dominant economic paradigm. So is it @41 “naive about the likelihood of them ever buying your particular set of values”? I don’t think so. We will lose many a battle, but the war IS being won with the pendulum now swinging our way.
Or rather is it naive to believe that your “TRUE economic rationalists” would choose a green contingency solution to their problem without a paradigm shift to triple bottom line accounting? And given that we can’t make them change by force right now, what alternative is there? If we keep working at shifting the thinking of the people (voters), this will result in the Greens holding the balance of power. This in turn means the ability to influence legislation in the right direction. The legislation that will ‘force’ the social and environment on to an equal footing with the economic.
The problem is that coal is not at $1,000/t, and given the hangover mindset of the Howard era, coal is not likely to be correctly priced any time soon. In my naivety, I see no means of getting coal to $1,000 dollars in the near future, do you? So whilst economists contingency plan to their hearts consent, there is no incentive to stop using coal now, or a cheaper dirty and/or socially inequitable fuel for that matter. A price (preferably a tax!) on carbon is a step in the right direction, but is not a panacea.
I could be very wrong, but I suspect my paradigm shift (people buying into at least some of my value set) will happen long before coal reaches $1,000/t. Unless of course you have a plan, because I would sincerely like to hear it.
@52 above, mcfarm states: It is now ‘cheaper’ to produce liquid fuels from plants with oil over $125 a barrel, but at what costs to people and the environment?
Is it? At $150/barrel, all the ENERGY inputs to the manufacture of your precious alternative fuels go up with results like this:
Australian Renewable Fuels (ARF) requested the Australian Stock Exchange halt trading of their shares (ASX:ARW) on Thursday 01 November 2007 pending an announcement within 48hrs. That announcement was made on Friday 02 November 2007 and it informed the market that the ARF board had decided to immediately place the Australian production facilities on care and maintenance.
ARF are citing rapidly escalating feedstock prices. Tallow in Australia has increased in price from less than $600 per tonne to over $900 per tonne in the last six months due to demand from China. As a consequence both ARF processing facilities have become uneconomic. http://envirofuel.com.au/2007/11/05/australian-renewable-fuels-shuts-down-production/
AND:
Times are tough for ethanol producers. They are in the same boat right now as refiners - enduring very poor margins. This is what the economics roughly look like at $5 per bushel of corn and $8/MMBTU of natural gas. To produce 1 gallon of ethanol today requires:
* $1.85 of corn
* $0.33 of energy
* $0.14 of enzymes, yeast, etc.
* $0.23 of labor, maintenance, and various miscellaneous expenses
There is a DDGS credit per gallon of ethanol of $0.55. Thus, the total cost to produce a gallon of ethanol today is $1.85 + $0.33 + $0.14 + $0.23 - $0.55, or exactly $2/gallon of ethanol. For reference, the February contract for ethanol in the Midwest as of this writing is $2.15. And $2/gallon is merely cost of production. It doesn’t take into account any return on investment. http://www.theoildrum.com/node/3591
Note that at the time the above was written, oil was barely above $100… so all those figures are now higher. It’s hard to keep up isn’t it?
mcfarm, thanks for your thoughtful reply, there is good stuff in there.
Sadly what I write imperfectly captures what I think. My second paragraph in 34 revealed what I thought would unite the Greens. The “It is also..” in my last paragraph was intended to link to the the second paragraph, I wish I had been more rigorous about the link. The last paragraph was a summary closing argument, not an exclusive follower of the prior one. To be absolutely clear I never imagined Greens being united by economic rationalism. My Green unity concept was always being Greens united by the longstanding core principle of living within means. Your first five paragraph aren’t directed at what I actually think. You don’t describe flaws in my thinking, you just seize on my failure to perfectly convey precisely what I thought in a completely unambiguous fashion. I apologise.
My second paragraph in 34 directly contradicts your sixth paragraph in 52.
I unreservedly agree with you that winning the single bottom line to end coal provides no guarantee of a green outcome (your 6th & 7th para’s) and I already agreed that point in 41 so we don’t need to argue that. Ending coal does make it more likely we go Green since one dirty outcome is off the table and the other doesn’t enjoy the wide public acceptance that coal once did and that renewables presently enjoy. I also don’t buy that nuclear has a massive economic advantage over things like solar thermal and an objective hardnosed ER won’t either.
A lobbiest with a “bribed” (either overtly or otherwise) politician is the biggest risk here not an objective ER.
I’ll never agree with you about the hard nosed ER’s buying the triple bottom line. I can however see the hard nosed ER’s may lose a little of their influence which could contribute to the outcome you seek.
Coal at $1000 per tonne in the not to distant future is actually pretty easy for me to imagine. Oil was $12/barrel or so in 1998. A mere 10 years later it is 10 times higher and projected to double in the relatively near term.
Metallurgical coal recently hit $300/tonne without any current peak coal event driving it. If you apply peak coal pressure and reference recent oil experience then you can sustain an argument that coal will get well over $1000 per tonne and possibly within a decade. Its not even impossible to imagine it at $5000 per tonne within 20 years.
This means I think the single bottom line will kill coal before the hard nosed guys start wearing green underpants. But its okay if we just disagree about that because thats a matter of opinion and inherently unprovable in advance.
Coal levy increases:
http://news.ninemsn.com.au/article.aspx?id=573004
This is a good start, shame its not being directed towards clean generation though. Notice how the levy is only directed at coal being sold for more than $100/tonne. Very clever if you goal is to ensure the industry keeps on trucking.
They don’t like it but at the least coal industry doesn’t claim they will be destroyed by it. So if they think they can keep functioning with the increase what I really don’t get is why the Greens think a coal levy is bad policy that would destroy the coal industry.
What is the latest Green thinking on a coal levy to fund renewables?
It’s all OK folks, Martin Ferguson is going to deliver us from OPEC, for his is the portfolio and glory, oil forever and ever amen.
http://www.abc.net.au/news/stories/2008/06/16/2276254.htm
mikestasse@53, sorry for the slow reply I missed your post somehow.
I was referring to an article on the price of ligno-cellulose ethanol being produced in minutes rather than days, and damned if I can find it now, should have linked it at the time - was on ABC online I think.
Anyway it was Australian innovation that drastically reduces the costs associated with production of ethanol (less time and energy). Also no food (grains), or food waste (tallow), required. So the ethics were OK and $ costs were drastically reduced as the ethanol producers were nor competing with soap manufacturers or feedlots/CAFO’s (not to mention humans).
Agricultural waste was the main input, but I remember my concern being that this process could end up being a huge consumer of wood chips and a threat to old growth forests.
And isn’t Saudi Arabia such a wonderful country, offering to up production of oil for the common good by 500,000 barrels a day? And it proves that peak oil is a green conspiracy too right?
http://www.abc.net.au/news/stories/2008/06/16/2276595.htm
My calculator says the Saudis will benefit by a mere $70 million dollars a day (or $25.5 billion a year) by their act of ‘generosity’. Oh, and global warming be damned the Saudis will buy bigger air conditioners to be powered by nuclear plants.