Peak Oil

[Naked shorts]

News.com.au believes that the oil bubble will burst and go as low as 80/90 dollars a barrel, of course news.com doesnt give any proof for their claims and the general lack of journalism seen on the site is nothing short of criminal.

News.com has got to be the worst possible news source, they are extreamly bias, commercial, highly opinionated and focus on riduculous things. Perfect example of their "Breaking news!"
http://www.news.com.au/story/0,23599,23888302-1702,00.html

Goldman sachs (they predicted the recent crash, and basically every other recent occurance) beleives oil prices will hit $150 - $200
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxRKcAZi630&refer=home

Citibank was estimating that oil would goto $75 until just recently when they suddenly changed their mind to $117.
http://biz.yahoo.com/ap/080610/bp_analyst_note.html?.v=1

Citibank doesnt know whats is doing. In the recent crisis they have lost billions while Goldman has made billions. I would take the advice from Goldman

@vishalt
"they are smart enough to use more care pooling/hydro buses and trams!"

Euros arent smart for doing that, they just dont have enough money to pay for the petrol.

 

[lusk]

Goldman sachs (they predicted the recent crash, and basically every other recent occurance) beleives oil prices will hit $150 - $200
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxRKcAZi630&refer=home

Citibank was estimating that oil would goto $75 until just recently when they suddenly changed their mind to $117.
http://biz.yahoo.com/ap/080610/bp_analyst_note.html?.v=1

Citibank doesnt know whats is doing. In the recent crisis they have lost billions while Goldman has made billions. I would take the advice from Goldman

I wouldn't take any advice from the news. Goldman sachs and Citibank know exactly what they are doing, any news that is issued will always be to their benefit. Goldman sachs is probably only talking oil up so it has demand to unload into, Citibank talking down oil because it wanted to buy.

 

[Smurf1976]

good posts smurf. what do you think is the best way to secure basic electricity needs? obviously transport is whole other debate.

is it possible to export electricity overseas? i like the idea of a nuclear australia exporting energy.

A few points..

1. I think we'll need to use electricity wherever possible in preference to oil etc. Nuclear, solar, wind, hydro, geothermal etc all produce electricity, not liquid fuels, so that makes electricity the only real long term option for consuming devices.

2. How to generate it depends on the timeframe. Oil's gone now in terms of economic viability. Gas will probably be next. Coal depends on what happens about climate change - my guess being not much once peak oil seriously hits.

The timing for gas to get expensive varies depending on who you listen to and what assumptions you make. The general notion though is that gas in 2030 will be roughly where oil is now in terms of its depletion and production profile - at or very near the peak. However, with higher demand (vehicles etc converted to use it) the point where demand exceeds supply ought to come sooner than that. Either way it's well within the 30+ year lifespan of a new power station so it's now as far as proper planning is concerned.

So I'd say in the short term use anything other than oil. As for the long term, don't build any more gas-fired plants for baseload unless it's for a temporary use (eg a mine with a limited life and no real power alternative). To keep building them commits us to a rather large problem whenever gas does peak - these plants are virtually impossible to convert to any other fuel, much harder than the oil-fired plants of the 70's were (and they still did more than enough economic damage).

So, in short, it's nuclear, coal and renewables. The most attractive renewables being geothermal, solar thermal and large scale hydro (critical due to storage and the ability to precisely control output). Any other renewable is limited to a moderate contribution for technical and/or economic reasons although wind is nonetheless attractive since it's cheap.

As for exporting it, no but yes. Exporting actual electricity is problematic due to transmission losses. We don't link, say, Perth and Adelaide for that reason alone. So running cables under the ocean doesn't really work in terms of the distances that would be required.

But there's another way and we're already doing it to some extent.

Tasmania took it further than just about anywhere (a consequence of the state's relative lack of other resources and geographic isolation), to the point that 20th Century Tasmanian economics, state development and politics can be largely condensed to two words - "hydro-industrialisation".

It was a pretty simple strategy. Develop power, power and more power. Bring in raw materials from wherever, apply that power to energy-intensive processing, then export whatever product was produced. To this day, the resultant activity still accounts for about two thirds of the state's exports.

New Zealand, South America, Canada all have done much the same (also with hydro power). To a lesser extent Victoria and NSW have done it with coal-fired power although never to the extent of becoming the state's major means of economic development (though Victoria sure did try pretty hard to make it that way for a while).

So yes, you can export electricity but not directly. Regardless of the source of generation, if you wanted to export electricity from Australia then simply building a few big smelters and ending the eport of unprocessed ores would be the easy way. Be warned that it's a political minefield though...

 

[nioka]

I've done sums on trading my 6cyl Toyota in on a prius. (my sister was driving a new one last week)Even if fuel was priced at $2.50 per litre it would take me 10 years doing 30,000 per year to recover the outlay now. Not good economics. Apart from the fact that I would have a smaller, less comfortable car. My current car has only done 34,000 km so I don't need a new one anyway.There will be many in the same situation.
Our other vehicle, a 4wd holden Rodeo will last another 10 years yet. I am considering home made biodiesel for it. That will have to be my contribution to the peak oil problem.

As far as alternative power sources go I doubt if wave and tidal power has been given enough thought. There is a much more consistant power there to be harnessed than with wind. There was a proposal to construct a tidal power plant in the Clarence River. I believe it has been scuttled by the greens, the nimbys and the professional fishermen.

 

[2020hindsight]

1. I notice Graeme Samuel going into bat for Fuelwatch. Certainly it appears to be the only thing that gives John Citizen a fighting chance here - knowledge can only be strength surely.

2. The way the opposition talk, Rudd promised to keep fuel prices down, - I would have said Fuel watch will try to minimise it, and that goes for whether or not market prices are heading up down or sideways.

3. As Rudd says, there are 3 opinions now in the coalition - a) 5c discount, b) which incidentally Turnbull says he wouldn't guarantee to bring in if he came to power c) now 10c discount .

4. The use of petrol is reducing as the price goes up - people are turning to public transport and/or less use of their SUV's whatever - it is not , as the coaltion claim, a fixed market usage - it will react to price.

5. I think Malcolm Turnbull had it right when he sent the first email to Brendan Nelson that it would be a mistake to reduce the excise - and in being forced to follow the wimpish populist message of Nelson, he has been seriously discounted as a credible voice. He admitted it was "a good political decision" , but refused to answer that it would be "a good economic decision" - sadly he suffers because of Nelson's foolishness on the fuel situation.
- imo


http://www.abc.net.au/news/stories/2008/06/19/2279902.htm

Motorists 'playing poker' with petrol prices
Posted 7 hours 52 minutes ago
Updated 2 hours 55 minutes ago

The competition watchdog says motorists are playing poker with oil companies until FuelWatch is introduced.

Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel says oil companies use a price monitoring service called Informed Sources to make sure they do not over-discount.

Mr Samuel says the difference between the lowest and highest fuel price in Sydney today is 20 cents.

But he says without FuelWatch, motorists will not know where the cheapest prices are.

Mr Samuel says the price monitoring carried out by oil companies and retailers borders on being illegal.

He says the major petrol retailers, Coles and Woolworths have up to the minute information on each other's prices, which they use to avoid discounting their prices.

Mr Samuel told a business gathering FuelWatch will transfer this power of knowledge to motorists. etc

He says FuelWatch could save motorists more than 20 cents a litre by ending retailer collaboration

 

[roland]

Invest in wind power - BBW specifically so I can get more dividends

 

[CAB SAV]

The Pollies are wrapped. They have us working/debating with them on how to save 5 or 10c a litre on fuel, hybrids, improved public transport etc.
Google electric cars and get one from overseas from $3,000aus. You certainly could do it, but guess what, Feds told me it would not pass Aussie safety test & would not be able to be registered. Worried about my safety, Sure, I'll just go and get a 1000cc motor bike.
End of the day it's all about money. Not much tax off a small electric car that costs 80c a week to charge.
The pressure is off them whilst we still persist in debating minor changes to cost of fuel rather than total change from 19th century combustion engine technology.
Again, It's all about money.

 

[GREENS]

I watched this interview with Richard Heinberg on the 7:30 Report tonight and I must say it was quite a good interview. Straight to the point and no hiding from the big questions. Definitely worth a watch if you didn’t see it.

http://www.abc.net.au/7.30/content/2007/s2280200.htm

 

[gfresh]

I also would recommend the above interview, although for most that are following oil - maybe these things are already familiar.

China has just lopped off it's discount, in effect raising their fuel prices by 8%. This has just bought the price of oil down over night by a few percent, but whether it will continue to exert downward pressure on oil, time will tell.

I think any cut in excise would be pointless (especially a nominal 5c), it would very soon be lost "in the wash", and then the public would be crying for further cuts. Here in QLD we have an 8c/L discount over the other states, and I can't say we're all running skipping around guzzling petrol because we are saving that amount right now. I do a reasonable amount of km (20k a year), and I know 5c/L would save me a whole $3 a week That's not even a can of coke these days. The Libs doing a song and dance about how they're going to save "hard working families" with this scheme really doesn't impress me too much.

While fuel watch gets bashed by the media, and the public it seems - it never seemed like a terrible idea to me by having a lot more transparency. Even if did remove this "discounting" - it would probably also get rid of this ridiculous price cycle, and going towards a flatter price would no doubt even out to a price somewhere between the lowest and highest prices we currently experience each week. Fine by me.

Apparently, friends tell me, Australia is the only country with this massive cycle - is this true?

I am sick of "accidentally" running out of fuel on tuesday night, or wednesday morning, and having to que for petrol! I feel like I am in the third world.

 

[Timmy]

Google electric cars and get one from overseas from $3,000aus. You certainly could do it, but guess what, Feds told me it would not pass Aussie safety test & would not be able to be registered. Worried about my safety, Sure, I'll just go and get a 1000cc motor bike.

That is so funny!

 

[Aussiejeff]

The much vaunted "FuelWatch" scheme might be ok for city dwellers who perhaps have a choice of maybe 50 service stations within a 5km radius of their home.

However, the scheme is a total joke when applied to rural situations. Just how many servos do cityfolk and pollies think are scattered around within easy driving distance in rural regions? Even major centres like Wodonga and Albury only have a smattering of servos that you have to drive km's to get to, let alone smaller rural towns and villages.

To anyone living in rural (or some might say REAL) Australia, the notion of FuelWatch being a huge boon to us is a mere fantasy....

In fact, look at the Kimberley in WA - home of the Great FuelWatch Scheme. There are only 18 servos in the WHOLE Kimberley region listed for diesel (Price range $1.97c - $2.07). Would YOU drive 1,000km to save 10c litre??????



AJ

 

[2020hindsight]

1. The much vaunted "FuelWatch" scheme might be ok for city dwellers who perhaps have a choice of maybe 50 service stations within a 5km radius of their home.

2. However, the scheme is a total joke when applied to rural situations. Just how many servos do cityfolk and pollies think are scattered around within easy driving distance in rural regions?

3. Would YOU drive 1,000km to save 10c litre??????

1. 50 stations within 5km ? - I reckon you'd be pretty close with that guess.

2. agree - probably shouldn't apply in the bush. Then again, would it do any harm to force them to publish prices in advance?

3. mate! - 10cents is 10cents!! - you watch the cents and the dollars look after themselves as my Irish Grandmother used to say

(PS you'll have to get a small tanker-trailer to drag behind your pushbike, and go fetch the petrol with that)

 

[Smurf1976]

There was a proposal to construct a tidal power plant in the Clarence River. I believe it has been scuttled by the greens, the nimbys and the professional fishermen.

A point I've made many times here and elsewhere. Try and develop ANY power source that (1) actually provides a real alternative rather than a small supplement and (2) isn't oil or gas and the greens etc will do everything possible to stop you.

Hence my point that society doesn't want to do anything hard in terms of energy - and the only "easy" options are burning oil and gas, something that's totally unsustainable.

 

[jonojpsg]

Having just watched The Crash Course recommended elsewhere on ASF, I have to get some more discussion going on this topic.

Surely if we have reached peak oil which according to the graph shown

http://www.chrismartenson.com/peak_oil

we have been at for the last four years or so, then POO is going to simply continue its march upwards is it not? There is no way that anything else can be introduced quickly to replace it, apart from gas which will have to have a peak as well. As demand starts to exceed supply, price will increase.

Where does that leave us? I can't see our government doing ANYTHING about peak oil.

Is anybody out there thinking about what they will do in the case of a severe crisis?

A critical point Chris Martenson makes too is that once demand exceeds supply, exporting countries will start to rein in their willingness to export, especially those whose own domestic demand is growing. He gives the example of Mexico, who will run out of export capacity by 2011-12 which will take out the 3rd ranked US supplier!!!!! Where are they going to get another Mexico from?

As Australia uses much more than we produce, I think we may be in for some serious issues. Our major suppliers are UAE, Malaysia, Vietnam and PNG, and having just looked at their situations, the middle two are unlikely to have any oil to give us by 2011-12 either. Obviously UAE may well be able to cover these but given that many other countries closer to UAE will be in similar situations to us, I think we may be low down on the list of priorities.

So what are we going to do? I think the Federal government need to look very carefully at this - I will be interested to see what comes of their energy security analysis that is currently underway but I fear it may be too little too late. I for one am going to look at the possibility of changing my car over to natural gas shortly as we have plenty of that.

Anyway, looking forward to some feedback, comment, discussion, etc.

 

[J.B.Nimble]

I for one am going to look at the possibility of changing my car over to natural gas shortly as we have plenty of that.

Yes - might make sense in Australia but there are plenty of parts of the world in trouble for gas already - check the US for instance - already appears to have peaked. With Canada just going over the brink and Mexico maybe not far behind there is some real pain ahead stateside... No prospect of LNG infrastructure being developed quick enough to rescue them. The crisis is now - pity POO of has eased becasue it lulls too many in to false sense of security. When will people understand the meaning of finite...

 

[Smurf1976]

Where does that leave us? I can't see our government doing ANYTHING about peak oil.

Is anybody out there thinking about what they will do in the case of a severe crisis?

The great tragedy is that government WAS doing something 25 - 30 years ago. Then we stopped...

The old state energy authorities, particularly the HEC (Tas) and SECWA (WA) were very well aware of the situation 30 years ago and were taking action.

The HEC always had as its underlying basis for existence an understanding that oil wouldn't be around forever. Meanwhile the SECWA was noted internationally at the time for it's exceptionally speedy response to the situation.

The ETSA (SA) knew all about gas depletion 25 years ago too. And they took action.

The trouble since then is twofold. Firstly we stopped taking action as public concern about the alternatives (hydro, coal) trumped the little understood reasons for building them in the first place. The biggest environmental battle in Australian history was ultimately sparked by Tasmania's plan to shift away from oil by building more hydro dams.

Then we got rid of the entire notion of energy planning in favour of whatever was cheapest at the time. With the exception of Tasmania and the NT, the old energy authorities don't even exist today, having been replaced by state or privately owned companies "competing" amongst themselves for business by the cheapest means available today.

The Australian Government understood it pretty well in the late 1970's too. We did actually have a national plan to transition away from oil at that point. That too was lost in the political process, partly due to the environmental debate in Tasmania and then due to the temporary loss of OPEC's pricing power in the mid-1980's. By the 1990's it had totally gone and "deregulation" and "competition" were the mantras of the day.

So that brings us to 2008 less prepared than we were 30 years earlier.

As for the overall situation, oil and gas are limited resources relative to present consumption. Oil is the worst, but gas is also pretty limited - it's a short term solution at best, and one that seems likely to be largely squandered in the form of baseload electricity with most of the rest being exported.

In my opinion we'll wake up only when faced with outright crisis just as we did with water. Then we'll endure years of fuel and power restrictions, again as with water. The difference this time is that fuel and power restrictions will outright kill the economy, thus killing our ability to invest in solutions.

If I had to guess now then I'd say that whatever we do in terms of big infrastructure it will come about as an economic and security strategy just as Tasmania's dams and Victoria's brown coal came out of World War 1 and the Great Depression. I hope not, but I fear that we'll again be taking action only after a comparable crisis.

 

[CAB SAV]

When oil gets under $100 barrel, like to see our govt. buy 500 mill barrels for storage/resale. Better return than investing in future fund.

 

[rederob]

When oil gets under $100 barrel, like to see our govt. buy 500 mill barrels for storage/resale. Better return than investing in future fund.

That's twice the size of the US SPR, so it will never happen.
In fact, the dilemma faced by all importing nations is that each time they try to replenish their reserves, they force up the price of oil; because there is no spare oil sloshing around for sale.
Fortunately the global recession that is poking around for now will keep the lid on demand, and allow a semblance of "oil balance" for the time being.
If there are any peak oil disbelievers out there they will have to be wondering why oil has not crashed back to sub$80 levels by now.

 

[CanOz]

I think some governments know too well what is going on with oil and they are planning more aggressive ways to take oil resources.

I've been thinking allot about this since doing the Crash Course, and i can't think of anything other than when we move back to Western society we will need to become as self sufficient as possible.

Find a rock...its not going to be pretty.

Marc Faber had a very good summary in his Boom, Doom and Gloom Report of how commodity price rises always end in tears....i think he we seeing something much more forward than most of our governments.

Cheers,


CanOz

 

[IFocus]

The great tragedy is that government WAS doing something 25 - 30 years ago. Then we stopped...

The old state energy authorities, particularly the HEC (Tas) and SECWA (WA) were very well aware of the situation 30 years ago and were taking action.

The HEC always had as its underlying basis for existence an understanding that oil wouldn't be around forever. Meanwhile the SECWA was noted internationally at the time for it's exceptionally speedy response to the situation.

Yes I worked for SECWA in the early 80's in remote power stations, remember I dropped into Meekathara on my way through to Wiluna to checkout the German designed solar power station at the time, a nice bit of engineering.

Pity they never progressed