The Project did a short piece yesterday on peak oil, making light of a problem that will result in lower Australian GDP over the long term. The panel interviewed Bruce Robinson, Convener of ASPO Australia (Australian Association for the Study of Peak Oil and Gas).
It was good to see Steve Cannane (from the ABC’s The Drum) on the panel. Steve knows more about peak oil than all the rest combined, having researched and produced a landmark peak oil report when he was with the JJJ Hack program in the early 2000s.
Government has its head in the sand over this issue, as it has few answers for the public. No better example of this governmental cringe is BITRE’s Report 117, “Transport energy futures: long-term oil supply trends and projections”, which was released for public comment and then mysteriously withdrawn.
But perhaps there’s really no mystery to it at all? Here’s what the report stated:
For the next eight years it is likely that world crude oil production will plateau in the face of continuing economic growth. After that, the modelling is forecasting what can be termed ‘the 2017 drop-off’. The outlook under a base case scenario is for a long decline in oil production to begin in 2017, which will stretch to the end of the century and beyond.
Yes, ladies and gentlemen, that’s it for economic growth! The report goes on to say:
If the prognosis for plateau and then decline of conventional petroleum liquids is
accepted, the question arises as to how the world will cope with the prospect of one
of its major and convenient energy sources being progressively withdrawn.
There are really three options:
1. Oil is replaced with other (equally rich and abundant) energy sources (opening
the whole debate about alternative fuel sources, e.g. gas-to-liquids, coal-to-liquids,
2. Improved energy efficiency results in energy use per unit of GDP declining
markedly to match the shortfall.
3. GDP declines to match the shortfall.
Now, I wouldn’t like to rain on the writer’s parade here, but point 1 is factually incorrect. There are currently no “equally rich and abundant” energy sources that can be substituted for oil. Sure, there’s a planet-full of dirty, low return, unconventional hydrocarbons, but getting energy out of this stuff is slow, expensive and environmentally destructive.
And herein lies the rub. You can choose point 2 or point 3 above (I’ll leave it up to you), and imagine for yourself how Australian GDP will fare in the future, even riding on the well publicised coattails of China. Yep… it doesn’t look even remotely good.