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The elephant in the middle of the freeway: peak oil
Posted by Big Gav on April 14, 2009 - 7:15am in The Oil Drum: Australia/New Zealand
No Bullroarer today, but Bruce Robinson of ASPO-Australia has an article in Crikey on (unsurprisingly) peak oil.
Crikey - The elephant in the middle of the freeway: peak oil.
I am concerned there is no mention of future global oil shortages (Peak Oil) in the nationwide coverage of the BrisConnections story. I am also concerned that the Queensland Government is committed to the project, as this poses a serious risk to the state if Peak Oil arrives soon and is followed by "Peak Traffic" and "Peak Airport Usage".
Premier Anna Bligh yesterday declared the State Government would "not let this project fall over" but refused to confirm whether more taxpayer dollars would be used to ensure Airport Link went ahead. Ms Bligh said "all possible contingencies" were being explored by the Government.
There is a substantial "oil shortage" aspect, not yet mentioned, in which BrisConnections (and other toll-road companies) have not been at all open and honest with shareholders, and that is the serious risk to the financial side of the project from possible future oil shortages or very high oil prices, as "Peak Oil" approaches or kicks in. The Australian Association for the Study of Peak Oil and Gas feels ASIC should do much more to ensure disclosure of oil vulnerability risks to future income forecasts from transport infrastructure companies.
There are a lot of forecasts that the steep increases in global oil prices of last year will return, as the underlying rate of depletion of the world's giant oil fields has not changed, and Peak Oil is looming. The International Energy Agency, in its World Energy Outlook report of November last year, suggested, from a survey of 800 giant and supergiant oilfields, that the depletion rate, even after additional work like infill drilling, is about a 6.7% pa decrease in production (and about a 9% pa production decline without additional investment). ...
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Also on Crikey!, and following on from last years TOD:ANZ keypost on Airlines, QANTAS seems to be bleeding money.
Hi Bellistner, I have been tracking QANTAS and Virgin Blue traffic and capacity stats going back to Jul 06. In that time QANTAS Available Seat Kilometres (ASKs) and Revenue PAssenger Kilometres (RPKs) have essential been flat whilst Virgin's have had been growing steadily. Stats for Feb 09 however indicate that both airlines have smashed through their long term trend line. I will wait till March's stats are out and do another post.
I reckon that we lose one, probably Virgin with 18 months and QANTAS when we have the next oil price spike. QANTAS will probably be bailed out by the Govt however. It will be interesting to see the Aviation White Paper. The Green paper had perpetual growth in air travel. Lets hope a bit of reality is injected into the White Paper.
Look forward to it!
"Premier Anna Bligh yesterday declared the State Government would "not let this project fall over"
And this is from a Government who is Peak Oil aware and should have a working action plan by now...
Once again I implore people to make their own practical plans to feed themselves in the face of Peak Energy and its concomitant disorder and dislocation - Governments won't do it for us until it gets nasty...
They had a Minister who was PO Aware, and the new Transport Minister is PO Aware (which gives me some hope for future transport plans, but not much), but the Government as a whole has no idea, imo.
The QLD Labor Government specialises, thanks to former President MBeattie, in Disaster Government. That is, it waits until something happens, something bad, and then goes about making a big deal about fixing it. Think of all the Consultants and Media jobs that they've created over the years to support this habit.
Now, things are going to change somewhat by the time the next election is due in 2012, as the pipeline will be finished, the Bruce Highway upgrade to Caboolture will be finished, the Desal plants will be under construction etc etc etc. Maybe even QLD Health will not be dysfunctional anymore. All that's left for them to 'fix' is PO, so they may be leaving it 'in the cupboard for a rainy day'. On the bright side, if they've fixed everything, the LNP will have their arses handed to them. Again.
The traffic forecast model for the Airport Link project was developed by Arup. Arup’s Traffic forecasts for the Airport Link Project predict that the average increase in traffic volume across the three tollable sections will be 47% from 2012 to 2031.
I have developed a model with three scenario's for Oz's future oil supply based upon Geoscience Australia's P50 prediction of future production and our imports declining at 6.2% +/- 4% from the ELM. Based on this the potential shortfall in Australia’s oil supply from ABAREs consumption forecast is between 64% to 80% by 2025. Include an optimistic view of alt fuels and it is around 55%.
If you look at the Airport Link PDS risk chapter, it refers to the potential impact of fuel prices on traffic volumes six times. However nowhere in Arup’s traffic forecast is there any mention of the impact of fuel prices or fuel availability, not even an assumption on it. I wonder why this is the case? Maybe, just maybe, it is because if they did consider this inconvenient little issue, that their traffic forecasting process might suggest the project is unneccassary! I am sure that there will be plenty more bad news from BrisConnections in the years ahead.
In addition, AVTUR (Aviation Turbine Fuel - a petroleum distillate that's essentially high-spec. kero) is already approximately one-third imported into Oz, according to a 2008 Qantas Senate submission (3.5Mb pdf - quite interesting, including graphs and charts of national AVTUR supply), and this number will only increase with local resource depletion and the effect of tightening sulphur-content regulations.
Ironically, AVTUR is one of the easiest products to make with CTL (Coal-to-Liquids) Technology, and this has been "Plan B" for the US Air Force ever since they got the Peak Oil message a few years ago. However, the USAF have recently dropped a plan to build a CTL plant on an Air Force Base in Montana, apparently because the coal mining may have interfered with their nuclear missiles...
- Yeah, go easy with that blasting there, boys. We wouldn't want to set any of those puppies off by accident!
;-)
Thanks for noting the air force had dropped that CTL plan - I hadn't noticed that.