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Peak Moment for Peak Oil in QueenslandMargo: Stuart McCarthy, who returns to Webdiary after a long absence with this piece, is the Brisbane coordinator for the Australian Association for the Study of Peak Oil. He has 20 years of experience in engineering, logistics, disaster relief, security, risk analysis and planning in Australia, Africa, the Middle East, Southeast Asia and the Pacific Islands. And see At last, a government has a go at peak oil!! * Until recently the peak oil debate in Australia has been largely confined to internet forums such as Webdiary. Those who have dared elsewhere make the obvious point that production of the finite resource upon which our entire economy is based will soon peak and decline, have usually been labeled as doomsayers, conspiracy theorists, socialists or rabid greenies. That situation has changed dramatically in recent weeks with the release of the Queensland Government’s long-awaited Oil Vulnerability Taskforce Report. World oil production is peaking – it’s official, at least here in Queensland. Fortunately Queensland has been blessed with a political rarity, a politician still capable of talking openly and honestly about the tough issues despite the modern obsession with spin, namely Andrew McNamara. McNamara has spoken publicly about peak oil in general and the threats to Queensland in particular for years, including his February 2005 speech in Parliament, and last year’s interviews on Four Corners and Sixty Minutes. Recently retired Premier Peter Beattie appointed him to chair a taskforce to examine the issue in May 2005. His Parliamentary colleague Rachel Nolan, who has also spoken publicly about peak oil but with less profile, assisted McNamara on the taskforce. Since 2005 those of us who have closely followed the peak oil debate have watched for news of the report’s completion with great anticipation. Two and a half long years later, that news arrived several weeks ago with the headline “Crude Shock” splashed across the front page of the Courier-Mail, after a copy of the McNamara report was apparently leaked to Assistant Editor Paul Syvret. This occurred during a period of intense speculation about Beattie’s retirement, with some of that speculation coming from Beattie himself. Rumours abound that Beattie, the master of spin who presided over a series of unprecedented public infrastructure crises here in Queensland, didn’t want anything to do with a ‘bad news’ story like peak oil. Possibly this was a factor in his handover to Anna Bligh, who drew much of the heat for Beattie’s short-sightedness during her tenure as Deputy Premier. You can draw your own conclusion from the facts that McNamara’s report took over two years to complete, that it then sat in File 13 for six months despite public assurances by Beattie that it would be immediately released, that McNamara is now a Minister in the Bligh Government, that Nolan is now a Parliamentary Secretary, and that the report was tabled in Bligh’s first Cabinet meeting four days after she became Premier. Personally, I will remember Beattie as the man who needlessly delayed the commencement of Queensland’s urgent peak oil mitigation effort for at least 12 crucial months while he dithered over his decision to take the soft option and get out of the way of true leaders who can guide us through the tough times ahead. A good decision, way too long in the making. Shortly after McNamara’s taskforce was convened in mid-2005, Qantas Chief Financial Officer Peter Gregg commented in The Bulletin that the airline industry is “not sustainable” if oil prices reach US$100 per barrel, and the head of the International Air Transport Association referred to high fuel prices as “a fifth horseman of the apocalypse.” 136,000 jobs (7.3 percent of the workforce) in Queensland’s tourism industry alone, the second largest export industry behind coal, rely on the viability of these airlines, while passenger rail has died the death of a thousand cuts in recent decades and ‘transport’ still means ‘roads’ in the Transport Department. As I write this light sweet crude is trading at US$83.69 per barrel at the New York Mercantile Exchange and many reputable investors are openly discussing the prospect of US$100 oil by Christmas, but there is still no plan for saving Queensland’s tourism industry, or any other industry for that matter. Only time will tell how much Beattie’s procrastination will have cost. Nonetheless, the report has now been released. After a three week pregnant pause since the Courier-Mail article, Opposition MP Rosemary Menkens questioned McNamara in Parliament about the report last Wednesday. It was tabled on Thursday and published on the web shortly thereafter. Unsurprisingly, not one word of this made it into the mainstream media amid the contrived sensation of the stem cell cloning debate in Parliament the same day. For those of us familiar with peak oil the report itself is unremarkable. Peak oil is real, it is soon, and the implications for key Queensland industries are huge – wow (with a lower-case ‘w’ and no exclamation mark). But there are a few gems that may see the state really come to grips with a profound sustainability agenda that addresses both peak oil and climate change. Chapter 3 examines the Impact on Various Queensland Sectors, including transport, mining, resources and primary industries. Transport received the most comprehensive treatment, however the oil price scenarios are extremely conservative and McNamara conceded that the worst case scenario is being realised even before the report was released. For my money the most important sections are those examining the impacts on the mining and fossil fuel resource sectors. The mining industry section concludes in part: The mining industry is highly dependent on liquid fuels, which makes it highly vulnerable to fuel price increases and shortages. The industry has been fortunate that recent high (oil) prices have occurred in conjunction with higher commodity prices. A decline in commodity prices and continuance of high oil prices would place marginal producers at risk. The fossil fuel resources section notes Queensland’s limited oil and gas reserves, its reliance on imports, and the serious technical, thermodynamic and environmental limitations of coal gasification and liquefaction, geo-sequestration and shale oil. One of its key recommendations is to: … carry out a major review of Queensland coal and its future utilisation …(and develop) a strategic plan for development of the state’s coal resources … Together, these dispel the notion that Queensland could literally dig, burn and/or bury its way out of peak oil and climate change triggered socio-economic crises. Unfortunately, the primary industries section bears the hallmarks of the prevailing stove-piped, isolationist, cornucopian approach to the problem, arguing that: … if it becomes apparent that peak oil will eventuate in the next few years or so, Queensland is currently well placed to combat this situation, purely based on the potential of the ethanol industry … Queensland could potentially substitute almost 75% of all petrol consumed using ethanol. Further, this section uncritically repeats the ‘clean coal’ mantra, ironically quoting a glowing endorsement for coal liquefaction by Dr Brian Fisher, the former head of ABARE who was totally discredited at last year’s Senate inquiry into peak oil when he claimed with a straight face that “If the price of eggs is high enough, even the roosters will start to lay.” Chapter 4, Queensland’s Alternative Energy Options, dispels many of the myths that have hamstrung the debate so far. There are no silver bullet alternatives that can feasibly replace oil and allow what Jim Kunstler calls the “happy motoring utopia” to continue into the future. Ethanol, biodiesel and hydrogen, although they may have important roles to play, have enormous limitations in terms of thermodynamics, time, scale and cost. Further, the report allays one of the key fears of climate change activists in the peak oil debate, that Queensland would worsen the greenhouse gas emissions problem by turning to coal liquefaction, or coal to liquids (CTL): “The value of CTL technology in Australia is questionable, based on price and greenhouse gas intensity.” Solar power, on the other hand, although it “has no direct substitution value for oil,” is “a technology with potential to pay for itself very quickly with the right technology breakthrough.” McNamara recently suggested to me in relation to transport infrastructure that Queensland should “electrify everything.” Encouragingly, the foundations are being laid for a major switch to solar energy and public transport among other key mitigation strategies. What is remarkable about the report, however, is that it marks the Queensland Government as the first state/provincial government in the world to recognise that peak oil is real and decide to do something about it. To borrow a phrase from Winston Churchill, the battle for acknowledgement is over; the battle for action is about to begin. To that end, Bligh has made some of the right noises, purportedly instructing McNamara to “think big” in developing Queensland’s whole-of-government’ peak oil mitigation plan. Whether or not she fully appreciates this yet, the manner in which Bligh tackles peak oil will define her premiership. Her most important task will be to quickly sort out the wheat from the chaff in her own Cabinet. While McNamara has been talking about the need to “adopt a wartime mentality” to address peak oil for some time, many of his colleagues still don’t get it. His former boss in the transport portfolio and now Bligh’s Deputy, Paul Lucas, doesn’t appreciate that the feasibility studies for every one of Queensland’s tens of billions of dollars worth of road projects have completely omitted any consideration of rising fuel prices, and still complains about ‘subsidised’ public transport but not the $540 million per annum petrol subsidy. Echoes of Beattie’s oxymoronic ‘clean-coal’ gibberish still manifest themselves in almost $1 billion worth of government subsidies that continue to marginalise solar power and other renewable energy in what was once called the Sunshine State. One quarter of Queensland’s feed grain production is being turned into ethanol and burned while the world’s grain stockpile has halved in the last five years, food prices are skyrocketing and millions are starving. Discredited, neo-classical economic dogma still evidently holds sway over high school mathematics and physics. Bligh has charged McNamara with developing a ‘whole-of-government’ approach to peak oil mitigation, but the reality is that it requires more than that, more like a ‘whole-of-state’ approach. Businesses, civil society, and most importantly a jaded, cynical and apathetic public, will need to quickly become involved in the development of a reform agenda unprecedented in magnitude, despite the fact that few of them yet understand what the term ‘peak oil’ means. The clock is ticking, but we will first need to debate the tough questions in a sustained and meaningful way. We haven’t seen this sort of debate since Federation. To that end the last word here must go to McNamara himself. After describing his report as “an important starting point for a debate” in Parliament on Wednesday when replying to Menkens’ question, McNamara went on to describe peak oil as: … an issue that will require an open and honest approach from all members of this House. This is not an ideological issue — it is not a Left or Right issue; it is not a Labor, Liberal, National or indeed Independent issue — it is an issue on which the people of Queensland are going to require us, with goodwill and in good faith, to look for results and to come up with answers to preserve their lifestyles. [ category: ]
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SMH Now Paying Attention to Peak Oil
From the Sydney Morning Herald:
No future after November 24.
One of the great ideas of the previous Labor government was The Commission for the Future. Under the Howard government all thinking beyond the next election was thought a complete waste. So one of the first things to be underfunded and eventually axed was The Commission for the Future. If only we had looked further into the future we may now have been in a much better position to face the nightmares we have left our kids.
Agflation the perfect storm of Peak Oil and Climate Change.
As the price of food pushes up the inflation rate the cost of living is set to soar.
The Howard government has set us up for a gigantic fall. Inflation is rising, more interest rates rises are forecast. His government has been asleep at the wheel. Howard thinks this is as good as it gets. There is no future plan and no way out of the rising living costs we will all be facing in the very near future. We have seen a decade of gross mismanagement and now it is time to pay the piper.
Investment
Why not invest in alternative energy?
Why not indeed?! Ask the (hopefully soon to be ex-)PM. There are all kinds of subsidies to particular industries. This doesn't exactly fit with the proclaimed belief in the market, but is no less likely to persist because of this.
Pricing is a funny business. It's in some ways quite fictional. Why is a diamond worth more than the last living beetle of a particular type?: just because people decided this (somehow). Why is oil priced differently to old growth forest? Don't ask me.
I think most people are aware that both Capitalism and Communism wreak environmental disaster. I know I am. In many ways they share the same presuppositions about 'the environment' being external to the economy.
We desperately need a new way of dealing with these things. Perhaps trusts is one answer. Putting on price on 'environmental services' is another (though it presumes that the environment has no intrinsic worth - and so is less attractive to me).
The only party to even attempt to take these seriously is the Greens. On November 24th you know what you should do.
"The battle is over, the oil peakists have won."
The reason why Climate Change and Peak Oil are intertwined issues is that by reducing our dependence on oil we will also reduce our carbon footprint.
We need to make sure our political leaders are aware of the issues and plan to ease the pain of the change over process. Howard is still in the 1950's model of continuous growth which is a fool's paradise.
Data?
Ian McPherson:
Certainly I cannot give any hard data. I doubt in those communist times any was even thought about. This was pre-climate change working mans nirvana and such. Type into google communist pollution and you will find yourself a few examples. This might start you off. Certainly communist living did a fair amount of damage. Capitalism isn't the only culprit here.
China is communist at least in name.
The Many Shades Of "Green"
Ian McPherson:
Why not investment in alternative energy? If the price of oil is so high, alternative energy becomes attractive. People cannot pay for any product if they cannot afford it. Oil works in the same fashion as any other product. We though, have been down this road before, and I would like to avoid a repeat.
If people which to hoard they could do as old greenmailer T (yes, a strawman but an enjoyable one) does and ring the local broker. If and when the world does come to a crashing halt they will at least own one hell of nice tree house.
No; however, a fair share of them are.
The Attempted Hoax
John Pratt, why is it that any person bellowing peak oil theory always brings along climate change to muddy the oily waters? The two are not even related. If anything, peak oil is a gift from God for climate change doomsayers. Peak oil theory, like population theory (they seem to always find themselves together also), has been bandied about since the 60's. Climate change strangely (not really) has only come to pass since the destruction of the Eastern European socialist bloc (perhaps the greatest polluters ever). Comrade, if we don't dump this stuff in the river those evil Yankees will steal your job, food etc.
The insulting part of all this nonsense is that these people actually believe this sham form of socialist propaganda could fool any intelligent person into adopting their failed lifestyle. Peak oil theory is a 20th century ploy to bring into play further statist control. Ask a peak oil theorist if he or she has began to hoard the stuff? Really, the answer to that question is all one needs to know. Next!
What Attempted Hoax?
Paul Morrella:
John Pratt, why is it that any person bellowing peak oil theory always brings along climate change to muddy the oily waters? The two are not even related. If anything, peak oil is a gift from God for climate change doomsayers.
You are incorrect. World oil production (conventional oil) peaked in 2005. World oil production (all liquids) peaked in 2006.
If further shortages occur, and OPEC fails to increase production, the oil price will continue to rise. This will lead to major investment in tar sands, oil shale and the production of synthetic oil from coal. These sources are all far more polluting than conventional oil production, and environmentally destructive.
Climate change strangely (not really) has only come to pass since the destruction of the Eastern European socialist bloc (perhaps the greatest polluters ever). Comrade, if we don't dump this stuff in the river those evil Yankees will steal your job, food etc.
I'd like to see some data on that. As far as I know the world's largest polluter is the United States, soon to be overtaken by China. I doubt any country in the world could match the US over the past 50 years...
The insulting part of all this nonsense is that these people actually believe this sham form of socialist propaganda could fool any intelligent person into adopting their failed lifestyle. Peak oil theory is a 20th century ploy to bring into play further statist control. Ask a peak oil theorist if he or she has began to hoard the stuff? Really, the answer to that question is all one needs to know. Next!
That's nonsense. Socialist propaganda? Is T. Boone Pickens a socialist or a fool? He believes in peak oil, and as he noted in this interview, we will need to change the way we operate our energy markets. His idea of moving to natural gas for transport is sound, as oil is absolutely necessary for agriculture and medicine, and should not be wasted in cars.
Further statist control? Perhaps, if rationing becomes necessary during an oil shock. We already have Australian federal legislation that deals with oil shortages, so it would be nothing new. Most IEA member countries have legislation of this sort since the oil shocks of the 1970s and 1980s.
As to hoarding, that's a straw man argument. Consumers have no practical way of hoarding oil. They can hoard petrol, and have done so many times in the past, but it is potentially dangerous and takes up a lot of space.
Hoarding does go on, but it's mainly business buying when oil or petrol is cheap, especially those which have fleets significant enough to justify the pumps and tanks. Some farmers also buy bulk oil sprays and diesel when the price is low and store it. Many governments (such as the US) also invest in strategic oil reserves. These purposes could all be said to be hoarding.
Whether you agree or not, they are all prudent purchases, and not the mark of a socialist. Try not to generalise. Not everyone who believes in peak oil is a socialist or a scammer.
This election is about survival we need true leaders.
Ian Dunlop is fully aware of the problems the world will face in the next few years. Our politicians seem to be living in the past, our nation has never been more in need of true leadership. Howard has failed: he still advocates continuous growth. He has no plans to replace oil in our economy; the time to act is now. The first step is to remove John Howard.
World oil production has peaked.
We saw a debate on Australia's future last night, there was no mention of Peak Oil. The leaders should be taking actions now to ease us into the transition. We should be planning a future without oil. The longer we take to reduce our reliance on fossil fuels the worse will be the consequences.
Howard talked a lot about climate change but has not brought in proper policies to drive up the use of renewables,This is why he is left talking about nuclear and carbon capture and storage.
What labor policies?
Hi John, I admire you tenacity in trying to keep one of the dead horses dragging us down into hell looking as though it was still alive. But could you tell me what 'Kevin from heaven' has planned for peak oil now? So far not one word from any of them, and the rat Garret seems to avoid anything but empty rhetoric. I've read through labor policies and found nothing of substance nor anything which would address the real situation we face now, let alone in 2020 or 2050.
Labor supports a pulp mill which will destroy Tasmania and pump into breeding and fishing grounds more dioxin that all the Swedish mills put together along with 60000 litres a day of heavy polluting junk, let alone the increased use of fossil fuel for the extra hundreds of truck on the roads daily, associated air and land pollution from the mill and accompanying wood fired power station they are building.
Labor's climate change policy is all about committees, surveys and throwing money, hoping it will become rain, no different to the lib's.
Labor wants to make Australia “the clean energy hub of the Asia-Pacific”, but all they put up is more committees, surveys and totally leave out fuel. Just more empty boxes filled with semantic crap. Their strategies are a load of hot air, $500 million for clean coal, which is completely unproven or investigated yet. They state:
Yet they fully support a chip mill, which will clear fell 200000 hectares of native forests and up to 1 million hectares of heavily chemical polluted mono culture tree plantations. So far I've found nothing really different to the libs, except for window dressing. Just more lies and detours to give more bureaucrats money and actually do nothing of substance. Maybe Kevin from heaven is waiting on his god to intervene.
US stocks suffered losses
Oil prices continue to soar. What has the Howard government got to say on the threat of peak oil to our economy?
Peak Oil and Climate Change, the two biggest threats to our economy and the Howard government is not even aware of the dangers ahead.
The 1950's paradigm, the thought bubble that Howard lives in, is not capable of guiding Australia through the necessary changes we will have to make.
19th Century - Early 20th Revisted
The most interesting part of McNamara's interview with GPM is his prescient look into the future where the consumer will have to rely on "local consumption, local production, local distribution". This is a return to a way of living that Australia knew only 60 years ago. Forget the front lawns and back lawns, fruit and vegetables gardens just like our parents and grand-parents knew may be the status symbols of the future and the talk of the cafe society will not be Paris and Rome but 'you should see the size of my cucumber and tomatoes, dahling'.
And it will not come a moment too soon. We have been lulled into complacency by the promises of a utopia based on cheap fossil fuel. Our global trade will need to change to the rhythm of ships rather than aircraft.
It would not surprise me to find that within 10 years world governments are phasing out fossil fuel cars and reserving the remaining oil and gas for aviation only. Every means of motorised transportation can use solar or non-fossil fuel power except aircraft. Perversely, the impetus for this will not be commercial considerations but rather military. The country that can keep its military jets in the air the longest will be a world superpower. The US will lead the way on this.
Solar energy can and must form the backbone of our electricty baseload and our transportation need so that we can hold onto the real gains of a modern society.
The Battle for Action
It will sure be an interesting battle.
There are some hugely powerful vested interests that will be involved.
A whole of government approach can be recipe for doing nothing until everyone does something (the US/Howard line on Kyoto).
I hope Anna Bligh has the courage to do it. So far I think she has shown herself to be a party operative.
If Queensland can lead the way I hope the other states can follow (I live in NSW).
I think this is a hugely important issue and the time is short. So, here's hoping.