Australias Energy Future Where to from here

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Australias Energy Future
Where to from here
ARC Energy Directors Dinner Keynote
18 November 2006 Perth W Australia
Annimac / Anni Macbeth Futurist www.annimac.com.
au

• 
  

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Most powerful industries

• Technology I C T
• Energy Oil gas

3
Big Picture

• Global trends impacting industry
• Industry trends for the future
• Where Perth fits in all this

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Rate of Change

• Exponential
• Amount in one day same as
• Grandfather had in one year
• Younger means faster

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Im never having kids. I hear they
take nine months to download.
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Driving all Change Technology

• by 2020
• 70 of job types new
• 
  
• because

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Driving all Change Technology

• by 2020
• 80 technology then
• not imagined yet

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• Likely jobs in next 10 years
• Director of Emerging Thought
• Robotics Ethicist
• Creative Undertaker
• Biotech Rigger
• Chief Nanotech Geologist
• Hacker Relations Manager
• Valuer of Intangible Assets
• Human Interface Manager
• 
  Exists 2003

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Big PictureWhats pushing the industry

• OG Peak Oil
• Political power shift
• Global economic shift
• Global values shift

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• O G Peak Oil
• or The Big Rollover
• Supply gt Demand

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From Chris Skrebowski's recent visitThe
practical realities

• world needs oil production flows
• consumers need delivery flows
• reserves only useful as flows
• Peak Oil flows cant meet demand
• worry about flows not reserves

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Why does it matter ?
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Industry attitudes Three Wise Monkeys

• Oil Companies
  - hear no depletion
  
• Governments International Agencies -
  see no depletion
• And all agree it would be best to -
  talk no depletion

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Running on empty August 27, 2006 You're about
to hear two of the scariest words in the English
language "peak oil".Effectively, they mean the
end of the world as we know it.
The Prime Minister is selling Australia short by
pinning his hopes on a fall in petrol
prices. 31/8/06 Min Alannah MacTiernan major
Federal investment in public transport was vital
if Australia was to avoid major disruption as
global petroleum production reached its peak.
Oil prices will keep rising analyst The Age,
August 21, 2006 Chris Skrebowski. "The price of
oil will continue to rise until world oil
production peaks in 2010 at around 94 million
barrels of oil per day
Oil production limit reached expert ABC
News July 10, 2006. An international oil
industry expert says the limit of global oil
production has been reached. Former National
Iranian Oil Company executive Dr Ali Samsam
Bakhtiari has told the Financial Services
Institute in Sydney the world's oil fields are
producing as much oil as they can.
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EXPENSIVE HARD-TO-EXTRACT OIL
Annual Oil Production Gbbl
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How much OG is there ?


(ASPO 2005
estimate)
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(No Transcript)
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Werner Zittel , LBST
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(No Transcript)
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www.PeakOil.net
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(No Transcript)
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Oil discovery
Oil production
Forecast ?
ASPO Newsletter 40 April 2004
www.PeakOil.net
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What about Australia ? Havent we
got plenty ?
(Geosciences Australia)
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(No Transcript)
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Why Peaking sooner than expected

• Global production falls when loss of
  output from countries in decline
• exceeds gains in output from those that
  are expanding.

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Why supplies are peaking

• We are not finding oil fast enough
• We are not developing fields fast enough
• Too many fields are old declining
• We are short of people equipment
• Oilfield inflation is soaring

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The real discovery trend
Past discovery according to Exxon Mobil
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Discovery to Production takes 2 to 25
years
Global new field discovery (7-10bn b/y)
Tar sands and Heavy oil
Biofuels others
Known oil reserves in production (90)
NIP 10
Yet-to-find probable
Yet-to-find possible
EOR
Current supply 84mn b/d or 30bn b/y
2 to 25 years
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Ageing fields

• 18 largest fields
• 12 are in decline
• 5 have some potential
• 1 is undeveloped
• 120 largest fields give 50 of total
• 70 of production from fields 30 yrs old
• few large recent discoveries
• dependent on Old men young boys

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BP statistics

• OECD production peaked 1997
• OECD output declined by 2 million b/d
  8.8
• Non-OPEC non-FSU production peaked 2002
• North America/ Mexico peaked 1997
• North Sea - UK/Norway/Denmark peaked 2000
• now declined by 1.2 million b/d
  (19.2)
• 25 significant producers in decline
• 28 of global production from decliners

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Top five decliners 2005
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Others about to decline

• Denmark 2005
• Malaysia 2005
• Mexico 2005
• Vietnam 2005
• India 2006/07
• China 2007/08
• Iran struggling -- next to go ?

9.9m b/d or 12.3 of all
production
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Real new capacity to 2012 (
Peak in first quarter of 2011 )
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Chris Skrebowski's conclusions

• Supply will remain tight prices high
  barring major economic setback
• Oil supply will peak in 2010/2011 at
  around 92-94 million barrels/day
• Oil supply in international trade may peak
  earlier than oil production peak
• Collectively we are still in denial
• Only 1,500 DAYS to PEAK !

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ABARE differs
"If the price of eggs is high enough, even the
roosters will start to lay." ABARE to Senate
inquiry into Australia's future oil supplies
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Common Myth (super ) Leonardo Maugeri,
Economist ENI SPA Rome
..just as the Stone Age did not end for the
lack of stones, the Oil Age will not end
because of the scarcity of oil.
Rather oil will inevitably be surpassed in
convenience by a new source of
energy in the future
Biomass Walking, horses, horse cart,
horse-drawn barge Coal 40 worlds
electricity Trains Oil ( gas) Cars,
trucks, trains, planes ?? Thermodynamics ?
Theology ? Nuclear Thorium ?
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Common Myth (-) Richard Miller BP
Exploration Operating Co. Ltd. Middlesex, UK
12th January 2004
oil, the most energy-dense of
the natural, non-nuclear fuels on the
planet. But there isn't anything
conceivable that could replace
conventional oil, in the same
quantities or energy densities, at any
meaningful price Whom should we
believe ?
Whom should we believe ?
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Everyone agrees Change is
inevitable . Bookies odds
Peaking in 2010 - 2015
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Whats pushing the industry

• OG Peak Oil
• Political Power Shift
• Global Economic Shift
• Global Values Shift

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Global Economic Power
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Economic domination 200 yrs
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shifting to Western Pacific Rim
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Global Cultural power
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?
Christian domination 500 yrs
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Popes Funeral
2 billion people watched world media
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?
?
to Confucian / Islam influence
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Chi master class with MIT engineers
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Japanese Robanoids 2006
Your next receptionist ? Mine site tour
guide ?
Fastest
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Whats pushing the industry

• OG Peak Oil
• Political Power Shift
• Global Economic Shift
• Global Values Shift

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Global Shifting Values

• Gap widening
• knowledge
• haves / have nots
• age generations
• technologically connected

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Knowledge gap
Chinese Technology Centre
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Haves / Have Nots Gap
The world gap is no longer based on
wealth - It is now based on access
to skill to use technology
WHO
United Nations
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Generational gap
Three worlds Materialism Baby Boomers
45-60 Generation X 30-45
Sustainability DotComs 15-30
Virtual Ferals 0-15
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Technological Gap Half the people
in world have never made
a phone call.
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So whats ahead for Perth

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Australia uses 45,000,000,000 litres of oil
each year A cube of about 360 metres size
80 of Australias oil usage is in
transport
If Australias 20 M tpa wheat crop ? ethanol
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Perths Central Park building is 249 m high, to
top of tower
100 ml of oil contains 1 kWh of energy.
Enough to get small car to top of
Eiffel Tower
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Comparisons
Million barrels/day 2004 Oil Gas
Journal July 5th 2004 Australia uses 0.8
China 6.3 US 20.5 World 81 US 1 cubic
km oil / year
1 km
l
l
China
Australia
United States

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Mortgage Oil Vulnerability In Perth
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VAMPIRE Index

• Car dependence
• Proportion of workers who journeyed
• to work by car (as driver or
  passenger)
• Proportion of households with 2 or
• more cars
• Income level
• Median weekly household income
• Mortgages
• Proportion of dwelling units being
• purchased (mortgage or rent/buy scheme)

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Mortgage oil vulnerability in Perth
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What to do ? David Kilsby ASPO

• Do nothing not an option
• no magic bullet
• Commonwealth to become involved
• ASPO Australia advocates
• community engagement
• individualised marketing
• fuel tax escalator
• tradeable fuel allocation system
• David Heinberg oil protocol
• leadership required
• buy time !

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• What now - ASPO
• acknowledge oil depletion - industry
  governments community - media academia...
• grab opportunities - policy options for
  less fuel usage
• globally well placed - long awareness of
  oil depletion - leading management skills
  - TravelSmart water conservation -
  uncommitted gas reserves
• Oil Vulnerability task forces - govts

www.ASPO-Australia.org.au
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Global Trends impact for OG

• transiting two worlds - accelerating
• values shifting to sustainability
• Peak Oil value driven
• industry cooperation not competition
• young non negotiators for future
• relationships consumers
• 
  
  partners
• 
  innovators

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Thriving with change
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Thank you www.annimac.com.au
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In appreciationmuch OG Industry material
provided by

• Association for the Study of Peak Oil Gas
  Australia
• www.ASPO-Australia.org.au
• International ASPO
• www.PeakOil.net
• Bruce.Robinson_at_ASPO-Australia.org.au
• 08-9384-7409 0427 398 708
• Personal thanks
  once again, Bruce.
• Annimac
  www.annimac.com.au

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For further information thx to Bruce
Robinson Dave Kilsby
ASPO Australia for
sharing their wisdom

• www.sydneypeakoil.com
• Sydney Peak Oil Group
• www.aspo-australia.org.au
• ASPO Australia
• www.aph.gov.au/senate/committee/rrat-ctte
• over 180 submissions to an Inquiry into oil
  supply alternative fuels /oil_supply/submissio
  ns/sublist.html
• www.peakoil.net
• ASPO
• www.energybulletin.net
• (one of many good international sites for Peak
  Oil info)

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Variable weighting
Vampire
33.3
Assignment of ratings to map shadings
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VAMPIRE Value Assignment relative
to Census District percentile