[Peakoil] Prospects for the 2020 summit - new ideas or more of the same?

Wed Mar 12 02:39:46 UTC 2008

The following is the transcript of a "Perspective" broadcast through  
ABC Radio National on Tuesday evening.
--------------------------------------------
The Australia 2020 Summit - more hallucination than clear vision

http://www.abc.net.au/rn/perspective/stories/2008/2186644.htm#transcript

In April this year 1000 of Australia's best minds will congregate in  
Canberra for Kevin Rudd's Australia 2020 summit. The name suggests  
that these fine folk will form a clear vision of what we want  
Australia to be in 12 years time and the long term challenges that our  
nation faces. Quoting from the Labor Party website for the summit  
[1] , one of its five objectives is said to be, "To provide a forum  
for free and open public debate in which there are no predetermined  
right or wrong answers". This sounds great but as one reads further  
one finds that this is simply not true. In fact, the summit is  
destined to fail. By the year 2020 - only 12 years away - we will look  
back on the summit and the reports it produces as a lost opportunity.  
A tragic victory for fantasy and self-deception at a moment when a  
clear vision of reality could have helped us to meet the challenges  
ahead.

How do I know this? Let me quote a couple more lines from the website:

"The Australia 2020 Summit will examine...

How we best invest the proceeds of [current] prosperity to lay the  
foundations for future economic growth."

and

"How ... we plan future population growth at a national and regional  
level, given the constraints of water shortages and sustainability?"

The trouble with these statements is that they assume the possibility  
of future economic growth and the inevitability and even desirability  
of population growth. But economic growth requires energy. A clear,  
objective view of the facts shows that by 2020, Australia and the rest  
of the world will be deep in an energy and food crisis of epic  
proportions. Two independently-formulated computer models of world oil  
production - by Bakhtiari and Guseo - give the same result [2]. The  
peak of oil production is about now and production will be down 30% by  
2020. An analysis of all the large and not so large oilfields coming  
on line in the next 7 years sees little new production beyond 2012  
[3] . Even the world's highest advisory body on oil, the International  
Energy Agency that has previously been so complacent about the world's  
energy security, last year did an about face and declared that it sees  
a "supply crunch" developing by 2012 [4].

If a 30% reduction in world oil production by 2020 sounds bad then  
consider this. For an oil importing nation like Australia, it is not  
important how much oil the world is producing. What IS vital is how  
much oil is available to buy on the export market. Oil production in  
most of the major exporting nations has now peaked or is in decline.  
However, at the same time, the consumption of oil in these nations is  
rising rapidly. This is because the oil exporting nations are  
currently earning huge profits from sales of oil at high international  
prices. This stimulates rapid growth in their economies and so rapid  
increases their domestic oil use. Most of the oil exporting nations  
also have young and rapidly growing populations that they supply with  
oil at cheap, subsidized prices. So the major oil exporting nations  
are increasing their internal oil use rapidly at the same time as  
their production is falling. On current trends this leads to the  
shocking projection that there will be little oil available on the  
world market within 10 years [5]. In fact, oil exports are already  
decreasing at the same time as demand from China and India is rising.  
This is the fundamental explanation for the current oil price of  
around $100 per barrel. Remember, it was only $20 six years ago.

By 2020 Australia may have another Sydney's worth of population - 4  
million additional mouths to feed, house and transport. However, we  
will be scraping by on whatever oil we can produce ourselves - and  
this will be a small fraction of what we use today. The price of fuel  
will be many times its current cost. Since energy and economic growth  
are inextricably linked, our economy will be in severe and long term  
decline. Since oil is central to modern, industrial food production,  
food prices will be through the roof and our very food security will  
be uncertain.

Today, in 2008, it is politically incorrect for any politician, even  
of the Greens, to suggest that future economic growth is impossible or  
that population growth is undesirable. In 12 years time, as we  
struggle to survive, the future vision that came out of the 2020  
summit will look more like an hallucination.

1. Australia 2020 Summit (Labor Party website)
www.alp.org.au/media/0208/mspm030.php

2. Peak Oil: The End Of The Modeling Phase, by Ali Samsam Bakhtiari
tinyurl.com/yrprr9

3. Oil Megaprojects
http://en.wikipedia.org/wiki/Oil_Megaprojects

4. IEA Medium-Term Oil Market Report, July 2007
online.wsj.com/public/resources/documents/iea20070707.pdf

5. A quantitative assessment of future net oil exports by the top five  
net oil exporters,
by Jeffrey J. Brown and Samuel Foucherhttp:
www.energybulletin.net/38948.html
and
Australia and the Export Land Model
www.theoildrum.com/node/3657

Guests

Michael Lardelli
Senior Lecturer in Genetics
University of Adelaide

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