KILSBY AUSTRALIA transport policy, planning and management advice


 

Transport and Energy Futures

Anyone whose planning horizons extend beyond the next five years should consider energy futures and their impact on medium- to long-term plans.

Which, if any, of these caricatures do you currently subscribe to ?

  • (environmentalists) the world is heading for ruin unless we make major changes to our way of life
  • (planners) there is a major transition to be managed, proper planning will save the day
  • (the man or woman in the street) nothing is proven, no need to change behaviour just yet, something is bound to turn up
  • (engineers) technology will come up with a way forward
  • (the oil and gas industry) market forces will drive a gradual transition as competitive relativities change

In 1998, the Chartered Institute of Transport in Australia mounted a National Symposium "Beyond Oil : Transport and Fuel for the Future" to review the current state of knowledge. CITIA's conclusions after the symposium were released as an Outcomes Statement.

David Kilsby participated in the Symposium, and contributed thoughts on the future role of human-powered transport. David has since presented his review of the Symposium in various forums.

The keynote paper Climaxing Oil: How Will Transport Adapt ?" was presented by Brian Fleay.

One of the revelations at the Symposium was just how rubbery our data is on global oil resources and hence how uncertain our knowledge. One of the most authoritative sources is Colin Campbell, formerly of Petroconsult. His 1999 presentation "The Imminent Peak of World Oil Production" to an a All-Party Committee of the UK House of Commons is a comprehensive overview of the global issues.

In summary, according to Campbell, the world has already discovered about 90% of all the oil there probably is, and has already used up almost about half of what it has discovered so far. It is using up oil at four times the rate of new discoveries. The consumption rate is rising and the discovery rate is falling.

"Houston, we have a problem ..." ?

UPDATE: Major new oil find in Caspian Sea : How significant ?
UPDATE: US Arctic oil reserves

For further information, try:

review of CIT Symposium Oil & Gas Journal
CIT Symposium Outcomes Statement the Hubbert Peak
"How Will Transport Adapt?" (Fleay) US Geological Survay
Campbell presentation to UK House of Commons US Energy Information Administration
International Energy Agency Oil Analytics (commentators)
OPEC gearing up for hydrogen
Australian Institute of Petroleum Natural Capitalism
Australian Petroleum Production and Exploration Association  

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MEDIA RELEASE:

The Chartered Institute of Transport in Australia Inc

1998 National Symposium
"Beyond Oil: Transport and Fuel for the Future"

Statement of Outcomes


The Chartered Institute of Transport in Australia Inc. has just hosted a highly successful national symposium on the future of fuel in transport. The symposium titled "Beyond Oil: Transport and Fuel for the Future" was held in Launceston, Tasmania and was attended by almost 100 delegates from all states and territories. The following statement of outcomes was drafted at the conclusion of the Symposium.

We are at the climax of the fossil fuel age. The Chartered Institute of Transport in Australia draws attention to this fact following its 1998 national symposium "Beyond Oil: Transport and Fuel for the Future". Unlimited use of our greatest ever source of cheap energy may soon contract and the "Petroleum Age" in which we live can now be seen to be approaching an eventual end.

The symposium heard that a clear consensus is emerging that cheap oil production outside the Middle East will begin permanent decline around the year 2000, to be followed by permanent world decline within 15 years.

We have reached a crucial stage in the development of our local, national and international transport services. Our present path is leading us into potentially serious economic, social and environmental problems. New directions are needed for our future transport fuels and vehicles. "More of the same" in our current transport plans and ways of thinking is no longer tenable.

The unlimited use of cheap oil that has characterised this century will end and we will be faced with one of the greatest transformations of human affairs. The signs are already there. Risk of chaos, disorder and conflict will arise unless we face up to this great challenge and make the difficult decisions essential to the future well being of us all. These decisions must be based on the care of people and of the environment if we are to proceed down the path of constructive change.

Congestion, pollution and diminishing oil supplies are the central drivers of this change. Communities across the world are increasingly going to be faced with the need to revise their transport systems in response to these drivers. Congestion and pollution are already major factors in some cities - the diminishing fuel supplies will increasingly become apparent as the next century progresses.

Should self interest predominate, we could become locked in conflict, unable to adapt and with the likelihood that we will dissipate unproductively the scarce high quality petroleum fuels so essential to a safe transformation to a world "beyond oil".

The participants in the symposium workshops identified the following key issues:

  • key factors affecting oil based transport are congestion, pollution and oil supply;
  • the real cost of transport is going to increase and must be considered as a major factor in setting the economic agenda for the 21st century;
  • the need for Government to support the introduction of viable alternative fuels, more efficient vehicles and alternative transport systems which are environmentally acceptable and fuel efficient;
  • the need for greater transport industry and public awareness of the need to prepare for the decline and end of the "Petroleum Age";
  • it is essential that care of people and of the environment be recognised as the principal standards for addressing these issues.

To assist the development of constructive change in response to these issues, the Chartered Institute of Transport, the professional body of transport managers in Australia, calls for the development of greater understanding and awareness of these crucial issues and for their consideration in all policy formulation and decision making relative to the future of transport and fuel in Australia.

The CITIA sees a need to communicate this message particularly within the transport industry, and seeks co-operation from the oil industry and others in its efforts to draw attention to the great challenge which confronts us all.

ENDS 13/11/98

For further information contact :

Bert Elson (Symposium Committee)   03 6233 5390   Fax 03 6233 5210

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Major New Oil Discovery in Caspian Sea

How significant ?

In May 2000 the discovery of a major new giant oil field in the Caspian Sea was announced. It has been indicated that this could hold between 8 and 50 billion barrels of oil. Does this mean that we can stop worrying about any coming crisis ?

Here are a few pointers as to whether to stop worrying. I acknowledge commentary circulated by Brian Fleay for many of these points.

  • Much of the "oil in place" in most fields is not recoverable. It has been suggested that - on the basis of the scant information available - this find might represent around 10 billion barrels of extractable oil (plus or minus very wide margins).
  • The world consumes that much oil in five months at current rates.
  • This oil will not come on-line till after 2005 if all goes well.
  • Further finds of reasonable size are possible. The Caspian Sea Region has been well explored by the Soviets. However they had lacked offshore exploration expertise, and that is where the recent discovery has been made. With modern exploration techniques it is likely that the biggest discovery will be the first.

It seems to me that this find does not materially affect the fundamental issues that are being raised.

Dave Kilsby, May 2000

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US Arctic Oil Reserves

US dependence on imported oil has been identified as an urgent energy, economic and national security concern. Developing alternative sources of supply (especially domestic oil and gas resources) are of more interest to the US adminstration than changing patterns of consumption.

Much faith has been placed in Arctic oil as a resource, particularly the potential of "Area 1002" of the Arctic National Wildlife Refuge (ANWR) - considered the most promising oil prospect in the nation.

The US Geological Survey estimates just over 20 billion barrels of oil-in-place in Area 1002. Of this about 7.7 billion barrels may be technically recoverable (390 days of US consumption at current rates). The amount recoverable at $20 per barrel is lower, maybe 3 billion barrels (152 days of consumption).

If it were decided today to develop Area 1002 as a supply source, it would be producing about 1% of global oil supply by 2020, and about 5% of EIA-forecast US oil consumption by 2020.

Two Boston University professors, Cutler Cleveland and Robert Kaufman, criticise the Bush administration's oil policy as being built on myths :

  • Myth#1; Oil from ANWR will reduce US vulnerability to OPEC decisions (as above).
  • Myth#2: The footprint of development in ANWR will be small.
  • Myth#3: ANWR is not an "ecological treasure" because few people visit each year.
  • Myth#4: The oil industry has been a good steward of other important ecosystems.

For more detail see www.oilanalytics.org.

Dave Kilsby, March 2001

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Beyond Oil : Transport and Energy for the Future

Review of Symposium

The Chartered Institute of Transport in Australia mounted a National Symposium on this subject in November 1998. It was held in Launceston, Tasmania and attended by :

  • transport operators of road, rail, sea and air transport
  • vehicle manufacturers
  • the oil and gas industry
  • politicans
  • public and private sector planners
  • environmentalists
  • academics
  • the military
  • and others

The Outcomes Statement of the Symposium was unambiguous:

"... our present path is leading us into potentially serious economic. social and environmental problems ..."

and called for

"... development of greater understanding and awareness of these crucial issues and their consideration in all policy formulation and decision making relative to the future of transport and fuel in Australia ..."

Keynote Paper

The Keynote Paper ("Climaxing Oil : How Will Transport Adapt ?" was delivered by Brian Fleay of Murdoch University (WA), author of the book "The Decline of the Age of Oil".

This is a lengthy paper and should be read in full. Note especially :

  • the implications of the "Energy Profit Ratio" (EPR) concept
  • the exceptional characteristics (EPR and economic effectiveness in transport) of oil from the giant oilfields
  • the summary of probable reserves, discovery rates and depletion rates
  • the peak of world production estimated as 2015, but now (2000) for all sources other than the Gulf
  • the similar trajectory for gas and other hydrocarbon sources
  • total world hydrocarbon production estimated to be 25% higher than 2000 in 15 years time, but 25% lower in 30 years time

Brian Fleay's conclusions are many. The following seem especially noteworthy:

  • the high future dependence on resources located in the Gulf and in Russia will bring geo-political instability
  • the present trend to replace labour with energy will be reversed
  • there will be an increasing focus on sustainability and local self-sufficiency
  • co-operation rather than competition must prevail
  • the most daunting task is feeding the world during the transition period as the Age of Oil ends, because the world cannot produce enough food for its present and future human population without using fertiliser (whose manufacture is a huge fuel consumer)
  • agricultural requirements will take priority over transport
  • essential commercial traffic will be the highest transport priority
  • urban car travel will bear the brunt of the decline
  • urban road projects are therefore "disastrous investments"
  • metabolistic economic models are needed, not the present mechanistic models
  • there are hard decisions to be made
  • change can be managed constructively or destructively
  • if the destructive path is taken, scarce resources that are needed for the transformation process will be squandered

Further Keynote Speakers

  • Barry Jones, of the Australian Petroleum Production and Exploration Association, disputed Fleay's thesis. He argued that it relied on many implicit assumptions about stability in the way the wider world works. He suggested that a similar review of the future course of the world, if undertaken in 1900, would not have got much right beyond the death of Queen Victoria - it would not even have foreseen the First World War, less than a decade and a half away. The future is inherently uncertain.
  • Mark Diesendorf, of the Institute for Sustainable Futures, showed that the way we use energy now is not well understood and would not be considered anywhere near optimal if it was. He reviewed the true costs of the various modes of transport found in urban areas.
  • Ewen McPherson, of the Australian Institute of Petroleum, considered that liquid fossil fuels would remain competitive for a long time (possibly fifty years), and that evolutionary change would come about through market forces and changing consumer choice.
  • Ian Lowe, of Griffith University, reviewed sustainability imperatives with particular reference to Greenhouse Gases and Australia's position vis-a-vis the targets agreed at Kyoto. "We are not passengers on Spaceship Earth - we are the crew and it is time we started taking our responsibilities seriously".

Pieces of the Jigsaw

A series of speakers then highlighted various possible aspects of a more energy-responsible transport system.

  • Craig Marschall, of the Australian Natural Gas Vehicle Council, described the environmental advantages of gas-powered vehicles
  • David Kilsby, then of Sinclair Knight Merz and now Kilsby Australia, looked at the potential for human-powered transport (walking and cycling)
  • Bob Cotgrove, of the University of Tasmania, considered that cars are clearly here to stay but better application of technology could make them more civilised - smarter, lighter, cleaner
  • Louis Fouvy, of Fouvy Consulting, presented a substantial analysis which concluded that wholesale reform was called for - electric vehicles, better land use/transport integration, a stronger role for urban public transport, more freight moved by rail not road, and similar directions
  • Ken Ogden, of the Royal Automobile Club of Victoria, reminded the Symposium that future outcomes would be the aggregation of choices made by individual consumers
  • Simon Ginn, of the Queensland Department of Local Government, having just returned from a study tour of European and North American light rail systems, shared his enthusiasm for this mode
  • Phillip Laird, of the University of Wollongong, compared road and rail freight efficiencies (in energy terms) and argued that, since the grades and alignments of present long-distance rail routes in Australia are a major constraining factor on further energy improvements, their upgrading is a high strategic priority

Modal Views

Specialists in road, rail, sea and air transport then presented the energy view as it affected their own mode of interest.

  • Peter Evans, of Toyota Australia, highlighted the huge investment in energy R&D made by Toyota ($US 1.5 billion per year) and other car manufacturers. The "holy grail" of commercially viable hydrogen fuel cell technology was probably about fifteen years away. In the meantime, highly efficient vehicles such as Toyota's hybrid petrol/electric Prius (3.5 litres per 100 km) would be added increasingly to the nation's vehicle fleet
  • Suzy Wizeman, of the Swinburne University of Technology, reviewed alternatives to fossil fuel for aviation. With liquid hydrogen - despite safety implications - probably the best alternative, air transport will continue to be highly dependent on fossil fuel. Aviation presently consumes about 11% of transport fuel in Australia.
  • Mark Rosner, of Tasrail, was optimistic about the future for rail transport of freight. A railway locomotive is basically a power plant on wheels, and could employ whatever energy source was most economical at the time. In any future times of constrained energy supply, rail would anyway have an advantage over other land modes because of its inherent relative efficiency, irrespective of energy source
  • Tim Roberts, of Incat, spoke of the high-speed catamaran ferries being built in Tasmania. Incat are a world leader in such high speed vessels, which naturally exhibit high fuel consumption.

Conclusions

The Symposium summarised its general conclusions in an Outcomes Statement.

The supplementary conclusions that follow are those of David Kilsby alone.

modes

  • aviation is the mode most vulnerable to future energy problems
  • rail transport and sea transport are the least vulnerable
  • for road transport, we can expect to see vehicles different to today's but more of them

energy sources

  • tightening supply and rising prices will probably hit Australia's diesel fuel first - the country exports its own light oil but imports the heavy oil needed for diesel, bitumen etc
  • hydrogen fuel technology will be very prominent in future
  • renewable sources will figure increasingly prominently
  • nuclear power was not raised by anyone at the Symposium as an option and will probably remain out of contention until there is an acceptable solution to disposal issues

planning processes

  • there is no call for panic - yet
  • the government's reliance on fuel taxation as a revenue source, and its taxation policy in general, has huge potential to influence outcomes - for better or worse
  • energy issues cannot be overlooked in long term planning
  • energy flows must be modelled
  • strategic risk assessments will become more important
  • sustainability issues will come to dominate planning processes


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