Australia faces looming fuel shortages.

Press information from ASPO Australia

Australia faces looming fuel shortages.

December 20th 2010.

Australia will soon not be able to import enough oil to meet demand because of Peak Oil.

This warning comes from Prof Kjell Aleklett, head of the Global Energy Systems group at Uppsala University in Sweden, who is currently visiting Australia.

Peak Oil is the time when the rate of global oil production reaches its all-time maximum and starts its inevitable downtrend. Forecasts vary from between 2011 to beyond 2015.

Australia’s own oil production has been declining since 2000, and already 80 per cent of the fuel for our cars, trucks and planes is imported, either directly or as crude oil to be refined in Australia.

“Declining global oil production, increasing internal consumption in OPEC nations and increasing demand from China and India will mean there is less oil available for importers like Australia, US and Europe, just when their own domestic production is declining,” says Prof Aleklett.

Prof Aleklett has published a critical review of the International Energy Agency’s World Energy Outlook, casting very serious doubts on the independence and methodology of the IEA forecasts.

“In 2008, the IEA predicted world oil production would grow from the current 85 million barrels/day to 106 mb/d in 2030. However, the Uppsala group, using the same base data on existing reserves and future discoveries, can see only 75 mb/d. This means a substantial decline in oil availability instead of business as usual growth. This will almost inevitably lead to oil shortages in Australia,” he warns.

The IEA and the Uppsala group agree that production is dropping in most of the world’s giant oil fields by about 6 per cent per annum. It is the ability of new fields to fill this enormous decline gap which is the bone of contention.

“The difference is due to the IEA’s mistake in assuming impossibly high rates of extraction from future oil fields, twice as high even as those unachieved in the high-tech North Sea region. Oil has to flow through the pores in the reservoir rocks to find its way to the oil well to be pumped up. The flow rates depend largely on the laws of physics and on the geology and permeability of the sediments,” Prof Aleklett says.

“Sadly, economics and market forces have little impact on droplets of oil squeezing through rocks kilometres below the surface.”
The IEA is an oil-importers’ cartel to counterbalance OPEC, the oil exporting countries’ cartel.

“There has been public criticism of the IEA for succumbing to political pressure from the US to give unreasonably optimistic oil forecasts,” says Prof Aleklett. “But even the IEA has been reducing its forecasts of future oil production over the years, from 121 mb/d by 2030, to 115 then 106 and now 96 mb/day in 2030. However, the Uppsala group’s criticisms of the IEA methods have been unchallenged. I stand by my assessment that world oil production will start declining soon.”

Forecasts of looming global oil shortages have also been given by a range of authorities, including the US and German Defence Departments, Sir Richard Branson and even Macquarie Bank.

Prof Aleklett is warning planners and investors that on-going business-as-usual growth in Australia’s oil usage is impossible.

“Peak Oil will mean peak traffic and peak air-travel. Car and plane trips will start to decrease as oil shortages hit“.

“Cities and businesses that prepare in advance for the probability of oil shortages will fare far better than those that believe the fairy-tales that oil production will keep increasing continuously.

“Oil vulnerability assessment and risk management planning should be an essential step for governments and investors. People whose superannuation is in airport and urban toll-road companies will be very hard hit unless the funds managers start considering Peak Oil risks, soon. Oil vulnerability assessment should be an essential part of any investment decisions as most companies will be affected in one way or another,” Prof Aleklett concluded.

Further information:

Bruce Robinson, Convenor, Australian Association for the Study of Peak Oil
08-9384 7409 0427 398 708
www.ASPO-Australia.org.au
Prof Kjell Aleklett (in Australia) +61 404 701 100

Prof Aleklett’s latest presentation to WA Government planners etc is on the ASPO-Australia front page at
http://www.aspo-australia.org.au/References/Aleklett/20101217%20Perth.pdf

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