Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

The questions we don’t ask: a review of the Australian Energy Resource Assessment

By Cameron Leckie - posted Tuesday, 9 March 2010


Exports and imports

… a key assumption is that demand for oil will continue to grow and will be met from a variety of sources including imports, … (p64)

If this is a key assumption, then the question of where these oil imports will be sourced from can, should, but hasn’t been asked. Australia’s oil production peaked in 2001 and is likely to continue declining according to the AREA. We now import a significant percentage of our oil requirements but with our consumption expected to grow by 1.3 per cent per annum our imports are expected to increase at 3.3 per cent per annum out to 2030. This will result in 75 per cent of Australia’s oil requirements being sourced from over the sea. There is significant doubt that this volume of oil will be available in the future as I have in On Line Opinion written about previously.

The concept is not a difficult one to understand, as an oil exporting nation’s oil production goes into decline while its domestic consumption increases, the ability to export oil dwindles rapidly. Applying The Export Land Model (PDF 2.57MB) to the world’s top five oil exporters, suggests that at the time Australia needs 75 per cent of its oil requirements to be met by imports, these countries will be approaching zero net oil exports. This calls into significant doubt the soundness of this key assumption and begs the question; what is plan B?

Advertisement

Oil intensity

Time to consider another misconception; the oil intensity of the economy. Oil intensity is the quantity of oil consumed per unit of GDP. The AERA states that:

The continued decrease in oil intensity also complements broader environmental and energy security policy goals. (p66)

This statement is disingenuous. Addressing oil intensity without addressing total consumption is a nearly pointless activity. For example, if we double vehicle fuel efficiency but at the same time double the number of vehicles on the road then our fuel consumption remains the same. This is the point that focusing on oil intensity misses.

Despite the decades-long trend of declining oil intensity, total oil consumption has continued to increase as have greenhouse gas emissions. If we really want to complement environmental and energy security policy goals the key is increasing fuel efficiency and reducing the number of vehicles on the road and reducing the distance travelled.

Net energy

What is the difference between a barrel of crude sourced from Saudi Arabia and a barrel of synthetic oil sourced from the Canadian tar sands? The answer is net energy. One of the reasons that crude oil is such a useful energy source is that its net energy profit is so high. However net energy is a major disadvantage for all of the alternatives to crude oil such as biofuels, tar sands, oil shale, Coal to Liquids (CTL) and Gas to Liquids (GTL).

For example, the net energy profit of tar sands is about four (i.e. five units of energy are produced for every one invested). A paper (PDF 78KB) published in the peer reviewed journal Energies suggests that global oil and gas production had a net energy profit of 17 in 2006. The importance of this is that the alternatives to crude oil cannot compete on a barrel per barrel basis. So even though alternative fuels might offset some of the declines in crude oil, when considered on a net energy basis, the actual energy available for our economies to do useful work maybe much smaller, implying that our economies might also be smaller.

Advertisement

Net energy and energy returns on investment are concepts that governments, many economists and the team that wrote the AERA don’t seem to understand.

Conclusion

So there you have it. Thousands of hours of time and taxpayers money invested into a product that is incomplete, misleading and fails to grasp some fairly simple concepts. This results in an assessment of Australia’s future oil and liquid fuel situation that is not only unduly optimistic but also fails to provide the basis upon which a plan B can be developed for our nation as we enter the second half of the age of oil.

This leaves us in the rather uncomfortable position of having a plan A, business as usual, which is not viable and no plan B. How, in a country as advanced as ours, does this occur? Maybe if we could, as a society, resolve that question we would be much better off both now and into the future.

  1. Pages:
  2. 1
  3. Page 2
  4. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

35 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Cameron Leckie has a Bachelor Science and a Graduate Diploma in Education. Employment experience includes a range of management positions both in Australia and overseas in the telecommunications industry. He is a member of the Australian Association for the Study of Peak Oil and Gas (ASPO Australia). Since finding out about peak oil in 2005, he has written extensively on the topic and in particular, its impact on the aviation industry.

Other articles by this Author

All articles by Cameron Leckie

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 35 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy