We Could Be Witnessing the Death of the Fossil Fuel Industry—Will It Take the Rest of the Economy Down With It?

24 04 2016


Nafeez Mosaddeq Ahmed

Originally published on Alternet’s website, this compelling article by Nafeez Ahmed supports much of what has been published on Damnthematrix…..

It’s not looking good for the global fossil fuel industry. Although the world remains heavily dependent on oil, coal and natural gas—which today supply around 80 percent of our primary energy needs—the industry is rapidly crumbling.

This is not merely a temporary blip, but a symptom of a deeper, long-term process related to global capitalism’s escalating overconsumption of planetary resources and raw materials.

New scientific research shows that the growing crisis of profitability facing fossil fuel industries is part of an inevitable period of transition to a post-carbon era.

But ongoing denialism has led powerful vested interests to continue clinging blindly to their faith in fossil fuels, with increasingly devastating and unpredictable consequences for the environment.

Bankruptcy epidemic

In February, the financial services firm Deloitte predicted that over 35 percent of independent oil companies worldwide are likely to declare bankruptcy, potentially followed by a further 30 percent next year—a total of 65 percent of oil firms around the world. Since early last year, already 50 North American oil and gas producers have filed bankruptcy.

The cause of the crisis is the dramatic drop in oil prices—down by two-thirds since 2014—which are so low that oil companies are finding it difficult to generate enough revenue to cover the high costs of production, while also repaying their loans.

Oil and gas companies most at risk are those with the largest debt burden. And that burden is huge—as much as $2.5 trillion, according to The Economist. The real figure is probably higher.

At a speech at the London School of Economics in February, Jaime Caruana of the Bank for International Settlements said that outstanding loans and bonds for the oil and gas industry had almost tripled between 2006 and 2014 to a total of $3 trillion.

This massive debt burden, he explained, has put the industry in a double-bind: In order to service the debt, they are continuing to produce more oil for sale, but that only contributes to lower market prices. Decreased oil revenues means less capacity to repay the debt, thus increasing the likelihood of default.

Stranded assets

This $3 trillion of debt is at risk because it was supposed to generate a 3-to-1 increase in value, but instead—thanks to the oil price decline—represents a value of less than half of this.

Worse, according to a Goldman Sachs study quietly published in December last year, as much as $1 trillion of investments in future oil projects around the world are unprofitable; i.e., effectively stranded.

Examining 400 of the world’s largest new oil and gas fields (except U.S. shale), the Goldman study found that $930 billion worth of projects (more than two-thirds) are unprofitable at Brent crude prices below $70. (Prices are now well below that.)

The collapse of these projects due to unprofitability would result in the loss of oil and gas production equivalent to a colossal 8 percent of current global demand. If that happens, suddenly or otherwise, it would wreck the global economy.

The Goldman analysis was based purely on the internal dynamics of the industry. A further issue is that internationally-recognized climate change risks mean that to avert dangerous global warming, much of the world’s remaining fossil fuel resources cannot be burned.

All of this is leading investors to question the wisdom of their investments, given fears that much of the assets that the oil, gas and coal industries use to estimate their own worth could consist of resources that will never ultimately be used.

The Carbon Tracker Initiative, which analyzes carbon investment risks, points out that over the next decade, fossil fuel companies risk wasting up to $2.2 trillion of investments in new projects that could turn out to be “uneconomic” in the face of international climate mitigation policies.

More and more fossil fuel industry shareholders are pressuring energy companies to stop investing in exploration for fear that new projects could become worthless due to climate risks.

“Clean technology and climate policy are already reducing fossil fuel demand,” said James Leaton, head of research at Carbon Tracker. “Misreading these trends will destroy shareholder value. Companies need to apply 2C stress tests to their business models now.”

In a prescient report published last November, Carbon Tracker identified the energy majors with the greatest exposures—and thus facing the greatest risks—from stranded assets: Royal Dutch Shell, Pemex, Exxon Mobil, Peabody Energy, Coal India and Glencore.

At the time, the industry scoffed at such a bold pronouncement. Six months after this report was released—a week ago—Peabody went bankrupt. Who’s next?

The Carbon Tracker analysis may underestimate the extent of potential losses. A new paper just out in the journal Applied Energy, from a team at Oxford University’s Institute for New Economic Thinking, shows that the “stranded assets” concept applies not just to unburnable fossil fuel reserves, but also to a vast global carbon-intensive electricity infrastructure, which could be rendered as defunct as the fossil fuels it burns and supplies to market.

The coming debt spiral

Some analysts believe the hidden trillion-dollar black hole at the heart of the oil industry is set to trigger another global financial crisis, similar in scale to the Dot-Com crash.

Jason Schenker, president and chief economist at Prestige Economics, says: “Oil prices simply aren’t going to rise fast enough to keep oil and energy companies from defaulting. Then there is a real contagion risk to financial companies and from there to the rest of the economy.”

Schenker has been ranked by Bloomberg News as one of the most accurate financial forecasters in the world since 2010. The US economy, he forecasts, will dip into recession at the end of 2016 or early 2017.

Mark Harrington, an oil industry consultant, goes further. He believes the resulting economic crisis from cascading debt defaults in the industry could make the 2007-8 financial crash look like a cakewalk. “Oil and gas companies borrowed heavily when oil prices were soaring above $70 a barrel,” he wrote on CNBC in January.

“But in the past 24 months, they’ve seen their values and cash flows erode ferociously as oil prices plunge—and that’s made it hard for some to pay back that debt. This could lead to a massive credit crunch like the one we saw in 2008. With our economy just getting back on its feet from the global 2008 financial crisis, timing could not be worse.”

Ratings agency Standard & Poor (S&P) reported this week that 46 companies have defaulted on their debt this year—the highest levels since the depths of the financial crisis in 2009. The total quantity in defaults so far is $50 billion.

Half this year’s defaults are from the oil and gas industry, according to S&P, followed by the metals, mining and the steel sector. Among them was coal giant Peabody Energy.

Despite public reassurances, bank exposure to these energy risks from unfunded loan facilities remains high. Officially, only 2.5 percent of bank assets are exposed to energy risks.

But it’s probably worse. Confidential Wall Street sources claim that the Federal Reserve in Dallas has secretly advised major U.S. banks in closed-door meetings to cover-up potential energy-related losses. The Federal Reserve denies the allegations, but refuses to respond to Freedom of Information requests on internal meetings, on the obviously false pretext that it keeps no records of any of its meetings.

According to Bronka Rzepkoswki of the financial advisory firm Oxford Economics, over a third of the entire U.S. high yield bond index is vulnerable to low oil prices, increasing the risk of a tidal wave of corporate bankruptcies: “Conditions that usually pave the way for mounting defaults—such as growing bad debt, tightening monetary conditions, tightening of corporate credit standards and volatility spikes – are currently met in the U.S.”

The end of cheap oil

Behind the crisis of oil’s profitability that threatens the entire global economy is a geophysical crisis in the availability of cheap oil. Cheap here does not refer simply to the market price of oil, but the total cost of production. More specifically, it refers to the value of energy.

There is a precise scientific measure for this, virtually unknown in conventional economic and financial circles, known as Energy Return on Investment—which essentially quantifies the amount of energy extracted, compared to the inputs of energy needed to conduct the extraction. The concept of EROI was first proposed and developed by Professor Charles A. Hall of the Department of Environmental and Forest Biology at the State University of New York. He found that an approximate EROI value for any energy source could be calculated by dividing the quantity of energy produced by the amount of energy inputted into the production process.

Therefore, the higher the EROI, the more energy that a particular source and technology is capable of producing. The lower the EROI, the less energy this source and technology is actually producing.

A new peer-reviewed study led by the Institute of Physics at the National Autonomous University of Mexico has undertaken a comparative review of the EROI of all the major sources of energy that currently underpin industrial civilization—namely oil, gas, coal, and uranium.

Published in the journal Perspectives on Global Development and Technology, the scientists note that the EROI for fossil fuels has inexorably declined over a relatively short period of time: “Nowadays, the world average value EROI for hydrocarbons in the world has gone from a value of 35 to a value of 15 between 1960 and 1980.”

In other words, in just two decades, the total value of the energy being produced via fossil fuel extraction has plummeted by more than half. And it continues to decline.

This is because the more fossil fuel resources that we exploit, the more we have used up those resources that are easiest and cheapest to extract. This compels the industry to rely increasingly on resources that are more difficult and expensive to get out of the ground, and bring to market.

The EROI for conventional oil, according to the Mexican scientists, is 18. They estimate, optimistically, that: “World reserves could last for 35 or 45 years at current consumption rates.” For gas, the EROI is 10, and world reserves will last around “45 or 55 years.” Nuclear’s EROI is 6.5, and according to the study authors, “The peak in world production of uranium will be reached by 2045.”

The problem is that although we are not running out of oil, we are running out of the cheapest, easiest to extract form of oil and gas. Increasingly, the industry is making up for the shortfall by turning to unconventional forms of oil and gas—but these have very little energy value from an EROI perspective.

The Mexico team examine the EROI values of these unconventional sources, tar sands, shale oil, and shale gas: “The average value for EROI of tar sands is four. Only ten percent of that amount is economically profitable with current technology.”

For shale oil and gas, the situation is even more dire: “The EROI varies between 1.5 and 4, with an average value of 2.8. Shale oil is very similar to the tar sands; being both oil sources of very low quality. The shale gas revolution did not start because its exploitation was a very good idea; but because the most attractive economic opportunities were previously exploited and exhausted.”

In effect, the growing reliance on unconventional oil and gas has meant that, overall, the costs and inputs into energy production to keep industrial civilization moving are rising inexorably.

It’s not that governments don’t know. It’s that decisions have already been made to protect the vested interests that have effectively captured government policymaking through lobbying, networking and donations.

Three years ago, the British government’s Department for International Development (DFID) commissioned and published an in-depth report, “EROI of Global Energy Resources: Status, Trends and Social Implications.” The report went completely unnoticed by the media.

Its findings are instructive: “We find the EROI for each major fossil fuel resource (except coal) has declined substantially over the last century. Most renewable and non-conventional energy alternatives have substantially lower EROI values than conventional fossil fuels.”

The decline in EROI has meant that an increasing amount of the energy we extract is having to be diverted back into getting new energy out, leaving less for other social investments.

This means that the global economic slowdown is directly related to the declining resource quality of fossil fuels. The DFID report warns: “The declining EROI of traditional fossil fuel energy sources and its eventual effect on the world economy are likely to result in a myriad of unforeseen consequences.”

Shortly after this report was released, I met with a senior civil servant at DFID familiar with its findings, who spoke to me on condition of anonymity. I asked him whether this important research had actually impacted policymaking in the department.

“Unfortunately, no,” he told me, shrugging. “Most of my colleagues, except perhaps a handful, simply don’t have a clue about these issues. And of course, despite the report being circulated widely within the department, and shared with other relevant government departments, there is little interest from ministers who appear to be ideologically pre-committed to fracking.”

Peak oil

The driving force behind the accelerating decline in resource quality, hotly denied in the industry, is ‘peak oil.’

An extensive scientific analysis published in February in Wiley Interdisciplinary Reviews: Energy & Environment lays bare the extent of industry denialism. Wiley Interdisciplinary Reviews (WIRES) is a series of high-quality peer-reviewed publications which runs authoritative reviews of the literature across relevant academic disciplines.

The new WIRES paper is authored by Professor Michael Jefferson of the ESCP Europe Business School, a former chief economist at oil major Royal Dutch/Shell Group, where he spent nearly 20 years in various senior roles from Head of Planning in Europe to Director of Oil Supply and Trading. He later became Deputy Secretary-General of the World Energy Council, and is editor of the leading Elsevier science journal Energy Policy.

In his new study, Jefferson examines a recent 1865-page “global energy assessment” (GES) published by the International Institute of Applied Systems Analysis. But he criticized the GES for essentially ducking the issue of ‘peak oil.”

“This was rather odd,” he wrote. “First, because the evidence suggests that the global production of conventional oil plateaued and may have begun to decline from 2005.”

He went on to explain that standard industry assessments of the size of global conventional oil reserves have been dramatically inflated, noting how “the five major Middle East oil exporters altered the basis of their definition of ‘proved’ conventional oil reserves from a 90 percent probability down to a 50 percent probability from 1984. The result has been an apparent (but not real) increase in their ‘proved’ conventional oil reserves of some 435 billion barrels.”

Added to those estimates are reserve figures from Venezuelan heavy oil and Canadian tar sands, bringing up global reserve estimates by a further 440 billion barrels, despite the fact that they are “more difficult and costly to extract” and generally of “poorer quality” than conventional oil.

“Put bluntly, the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 875 billion barrels. Thus, despite the fall in crude oil prices from a new peak in June, 2014, after that of July, 2008, the ‘peak oil’ issue remains with us.”

Jefferson believes that a nominal economic recovery, combined with cutbacks in production as the industry reacts to its internal crises, will eventually put the current oil supply glut in reverse. This will pave the way for “further major oil price rises” in years to come.

It’s not entirely clear if this will happen. If the oil crisis hits the economy hard, then the prolonged recession that results could dampen the rising demand that everyone projects. If oil prices thus remain relatively depressed for longer than expected, this could hemorrhage the industry beyond repair.

Eventually, the loss of production may allow prices to rise again. OPEC estimates that investments in oil exploration and development are at their lowest level in six years. As bankruptcies escalate, the accompanying drop in investments will eventually lead world oil production to fall, even as global demand begins to rise.

This could lead oil prices to climb much higher, as rocketing demand—projected to grow 50 percent by 2035—hits the scarcity of production. Such a price spike, ironically, would also be incredibly bad for the global economy, and as happened with the 2007-8 financial crash, could feed into inflation and trigger another spate of consumer debt-defaults in the housing markets.

Even if that happens, the assumption—the hope—is that oil industry majors will somehow survive the preceding cascade of debt-defaults. The other assumption, is that demand for oil will rise.

But as new sources of renewable energy come online at a faster and faster pace, as innovation in clean technologies accelerates, old fossil fuel-centric projections of future rising demand for oil may need to be jettisoned.

Clean energy

According to another new study released in March in Energy Policy by two scientists at Texas A&M University, “Non-renewable energy”—that is “fossil fuels and nuclear power”—“are projected to peak around mid-century … Subsequent declining non-renewable production will require a rapid expansion in the renewable energy sources (RES) if either population and/or economic growth is to continue.”

The demise of the fossil fuel empire, the study forecasts, is inevitable. Whichever model run the scientists used, the end output was the same: the almost total displacement of fossil fuels by renewable energy sources by the end of the century; and, as a result, the transformation and localisation of economic activity.

But the paper adds that to avoid a rise in global average temperatures of 2C, which would tip climate change into the danger zone, 50 percent or more of existing fossil fuel reserves must remain unused.

The imperative to transition away from fossil fuels is, therefore, both geophysical and environmental. On the one hand, by mid-century, fossil fuels and nuclear power will become obsolete as a viable source of energy due to their increasingly high costs and low quality. On the other, even before then, to maintain what scientists describe as a ‘safe operating space’ for human survival, we cannot permit the planet to warm a further 2C without risking disastrous climate impacts.

Staying below 2C, the study finds, will require renewable energy to supply more than 50 percent of total global energy by 2028, “a 37-fold increase in the annual rate of supplying renewable energy in only 13 years.”

While this appears to be a herculean task by any standard, the Texas A&M scientists conclude that by century’s end, the demise of fossil fuels is going to happen anyway, with or without considerations over climate risks:

… the ‘ambitious’ end-of-century decarbonisation goals set by the G7 leaders will be achieved due to economic and geologic fossil fuel limitations within even the unconstrained scenario in which little-to-no pro-active commitment to decarbonise is required… Our model results indicate that, with or without climate considerations, RES [renewable energy sources] will comprise 87–94 percent of total energy demand by the end of the century.

But as renewables have a much lower EROI than fossil fuels, this will “quickly reduce the share of net energy available for societal use.” With less energy available to societies, “it is speculated that there will have to be a reprioritization of societal energetic needs”—in other words, a very different kind of economy in which unlimited material growth underpinned by endless inputs of cheap fossil fuel energy are a relic of the early 21st century.

The 37-fold annual rate of increase in the renewable energy supply seems unachievable at first glance, but new data just released from the Abu Dhabi-based International Renewable Energy Agency shows that clean power is well on its way, despite lacking the massive subsidies behind fossil fuels.

The data reveals that last year, solar power capacity rose by 37 percent. Wind power grew by 17 percent, geothermal by 5 percent and hydropower by 3 percent.

So far, the growth rate for solar power has been exponential. A Deloitte Center for Energy Solutions report from September 2015 noted that the speed and spread of solar energy had consistently outpaced conventional linear projections, and continues to do so.

While the costs of solar power is consistently declining, solar power generation has doubled every year for the last 20 years. With every doubling of solar infrastructure, the production costs of solar photovoltaic (PV) has dropped by 22 percent.

At this rate, according to analysts like Tony Seba—a lecturer in business entrepreneurship, disruption and clean energy at Stanford University—the growth of solar is already on track to go global. With eight more doublings, that’s by 2030, solar power would be capable of supplying 100 percent of the world’s energy needs. And that’s even without the right mix of government policies in place to support renewables.

According to Deloitte, while Seba’s forecast is endorsed by a minority of experts, it remains a real possibility that should be taken seriously. But the firm points out that obstacles remain:

“It would not make economic sense for utility planners to shutter thousands of megawatts of existing generating capacity before the end of its economic life and replace it with new solar generation.”

Yet Deloitte’s study did not account for the escalating crisis in profitability already engulfing the fossil fuel industries, and the looming pressure of stranded assets due to climate risks. As the uneconomic nature of fossil fuels becomes evermore obvious, so too will the economic appeal of clean energy.

Race against time

The question is whether the transition to a post-carbon energy system—the acceptance of the inevitable death of the oil economy—will occur fast enough to avoid climate catastrophe.

Given that the 2C target for a safe climate is widely recognized to be inadequate—scientists increasingly argue that even a 1C rise in global average temperatures would be sufficient to trigger dangerous, irreversible changes to the earth’s climate.

According to a 2011 report by the National Academy of Sciences, the scientific consensus shows conservatively that for every degree of warming, we will see the following impacts: 5-15 percent reductions in crop yields; 3-10 percent increases in rainfall in some regions contributing to flooding; 5-10 percent decreases in stream-flow in some river basins, including the Arkansas and the Rio Grande, contributing to scarcity of potable water; 200-400 percent increases in the area burned by wildfire in the US; 15 percent decreases in annual average Arctic sea ice, with 25 percent decreases in the yearly minimum extent in September.

Even if all CO2 emissions stopped, the climate would continue to warm for several more centuries. Over thousands of years, the National Academy warns, this could unleash amplifying feedbacks leading to the disappearance of the polar ice sheets and other dramatic changes. In the meantime, the risk of catastrophic wild cards “such as the potential large-scale release of methane from deep-sea sediments” or permafrost, is impossible to quantify.

In this context, even if the solar-driven clean energy revolution had every success, we still need to remove carbon that has already accumulated in the atmosphere, to return the climate to safety.

The idea of removing carbon from the atmosphere sounds technologically difficult and insanely expensive. It’s not. In reality, it is relatively simple and cheap.

A new book by Eric Toensmeier, a lecturer at Yale University’s School of Forestry and Environmental Studies, The Carbon Farming Solution, sets out in stunningly accessible fashion how ‘regenerative farming’ provides the ultimate carbon-sequestration solution.

Regenerative farming is a form of small-scale, localised, community-centred organic agriculture which uses techniques that remove carbon from the atmosphere, and sequester it in plant material or soil.

Using an array of land management and conservation practices, many of which have been tried and tested by indigenous communities, it’s theoretically possible to scale up regenerative farming methods in a way that dramatically offsets global carbon emissions.

Toensmeier’s valuable book discusses these techniques, and unlike other science-minded tomes, offers a practical toolkit for communities to begin exploring how they can adopt regenerative farming practices for themselves.

According to the Rodale Institute, the application of regenerative farming on a global scale could have revolutionary results:

Simply put, recent data from farming systems and pasture trials around the globe show that we could sequester more than 100 percent of current annual CO2 emissions with a switch to widely available and inexpensive organic management practices, which we term ‘regenerative organic agriculture’… These practices work to maximize carbon fixation while minimizing the loss of that carbon once returned to the soil, reversing the greenhouse effect.

This has been widely corroborated. For instance, a 2015 study part-funded by the Chinese Academy of Sciences found that “replacing chemical fertilizer with organic manure significantly decreased the emission of GHGs [greenhouse gases]. Yields of wheat and corn also increased as the soil fertility was improved by the application of cattle manure. Totally replacing chemical fertilizer with organic manure decreased GHG emissions, which reversed the agriculture ecosystem from a carbon source… to a carbon sink.”

Governments are catching on, if slowly. At the Paris climate talks, 25 countries and over 50 NGOs signed up to the French government’s ‘4 per 1000’ initiative, a global agreement to promote regenerative farming as a solution for food security and climate disaster.

The birth of post-capitalism

There can be no doubt, then, that by the end of this century, life as we know it on planet earth will be very different. Fossil fueled predatory capitalism will be dead. In its place, human civilization will have little choice but to rely on a diversity of clean, renewable energy sources.

Whatever choices we make this century, the coming generations in the post-carbon future will have to deal with the realities of an overall warmer, and therefore more unpredictable, climate. Even if regenerative processes are in place to draw-down carbon from the atmosphere, this takes time—and in the process, some of the damage climate change will wreak on our oceans, our forests, our waterways, our coasts, and our soils will be irreversible.

It could take centuries, if not millennia, for the planet to reach a new, stable equilibrium.

But either way, the work of repairing and mitigating at least some of the damage done will be the task of our childrens’ children, and their children, and on.

Economic activity in this global society will of necessity be very different to the endless growth juggernaut we have experienced since the industrial revolution. In this post-carbon future, material production and consumption, and technological innovation, will only be sustainable through a participatory ‘circular economy’ in which scarce minerals and raw materials are carefully managed.

The fast-paced consumerism that we take for granted today simply won’t work in these circumstances.

Large top-down national and transnational structures will begin to become obsolete due to the large costs of maintenance, the unsustainability of the energy inputs needed for their survival, and the shift in power to new decentralized producers of energy and food.

In the place of such top-down structures, smaller-scale, networked forms of political, social and economic organization, connected through revolutionary information technologies, will be most likely to succeed. For communities to not just survive, but thrive, they will need to work together, sharing technology, expertise and knowledge on the basis of a new culture of human parity and cooperation.

Of course, before we get to this point, there will be upheaval. Today’s fossil fuel incumbency remains in denial, and is unlikely to accept the reality of its inevitable demise until it really does drop dead.

The escalation of resource wars, domestic unrest, xenophobia, state-militarism, and corporate totalitarianism is to be expected. These are the death throes of a system that has run its course.

The outcomes of the struggles which emerge in coming decades—struggles between people and power, but also futile geopolitical struggles within the old centers of power (paralleled by misguided struggles between peoples)—is yet to be written.

Eager to cling to the last vestiges of existence, the old centers of power will still try to self-maximize within the framework of the old paradigm, at the expense of competing power-centers, and even their own populations.

And they will deflect from the root causes of the problem as much as possible, by encouraging their constituents to blame other power-centers, or worse, some of their fellow citizens, along the lines of all manner of ‘Otherizing’ constructs, race, ethnicity, nationality, color, religion and even class.

Have no doubt. In coming decades, we will watch the old paradigm cannibalize itself to death on our TV screens, tablets and cell phones. Many of us will do more than watch. We will be participant observers, victims or perpetrators, or both at once.

The only question that counts, is as follows: amidst this unfolding maelstrom, are we going to join with others to plant the seeds of viable post-carbon societies for the next generations of human-beings, or are we going to stand in the way of that viable future by giving ourselves entirely to defending our ‘interests’ in the framework of the old paradigm?

Whatever happens over coming decades, it will be the choices each of us make that will ultimately determine the nature of what survives by the end of this pivotal, transitional century.

Nafeez Ahmed is an investigative journalist and international security scholar. He writes the System Shift column for VICE’s Motherboard, and is the winner of a 2015 Project Censored Award for Outstanding Investigative Journalism for his former work at the Guardian. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It (2010), and the scifi thriller novel Zero Point, among other books.

Difference Between Organic Gardening and Permaculture

20 04 2015

I’m often asked what the difference between Organic Gardening and Permaculture actually is, and it’s not easy to explain this without starting a rant that goes for hours, because the answer is not that simple.  This item I found this morning, however, does a great job….

difference between organic gardening and Permaculture
difference between organic gardening and Permaculture

The Permaculture garden is a lot more than an organic garden.

  • It is a system that is focused on closing the fertiliser loop by using waste, and reducing the dependence on inputs by creating healthy soil and diversity of produce.
  • It is also responsible for its waste, it aims not to pollute the surrounding environment, i.e. neither with excess nitrogen released into the water systems, nor weed seed into any natural systems.
  • It uses design to minimise the gardeners chores and energy input. Repeatative, hard work is the joy of few permaculturalists.  Variety and observation keep people engaged and excited about growing food. Permaculture activists are motivated by reducing their ecological footprint and developing a varied healthy lifestyle. Permaculture needs to engage all people of different ability, not just young strong people who can shovel compost.
  • It aims to imitate nature. Visually this is the most noticeable difference between organic gardening and permaculture. In permaculture gardens (home systems is the more holistic term) there is rarely bare soil, the conservation of soil and water is a high priority. There is a more complex use of space. Plants are allowed to set seed and are interplanted for pest control. You are unlikely to see plants in rows.
  • The permaculture system aims to harvest and maximise water, sun and other natural energies, e.g. wind, dust, leaves, bird droppings.
  • The permaculture system aims to provide nutritious food and habitat for people AND native animals and birds.

See more about our Permaculture Design and Demonstration Site

What’s the difference between Organic Farming and Permaculture?

Basically, Permaculture uses organic gardening and farming practices but it goes beyond these practices and integrates the garden and home to create a lifestyle that impacts less on the environment.potato (2)

Organic Farming promotes the use of natural fertilisers, making use of the natural carbon cycle so that waste from plants becomes the food (fertiliser) of another. In organic farming however, as with ALL farming, minerals are being lost from the farm every time a truck load of produce is carted to market.

Permaculture goes one step further. Permaculture brings production of food closer to consumers and the consumer’s wastes back into the cycle. It also reduces the energy wasted in transporting the foods by producing the foods where the people are. In permaculture the people contribute in their daily life toward the production of their food and other needs.

Peak fossil fuel won’t stop climate change – but it could help

26 02 2015

The Conversation

Peak fossil fuel means it’s unlikely the worst climate scenario will come to pass. Gary Ellem explains.

What happens to coal in China will play a big role in deciding which climate road we’re all on. Han Jun Zeng/Flickr, CC BY-SA

Fossil fuels are ultimately a finite resource – the definition of non-renewable energy. Burning of these fuels – coal, oil and gas – is the main driver of climate change. So could the peak of fossil fuels help mitigate warming?

The short answer is maybe … but perhaps not how you might think.

In a paper published this month in the journal Fuel, my colleagues and I suggest that limits to fossil fuel availability might take climate Armageddon off the table, although we will still need to keep some fossil fuels in the ground for the best chance of keeping warming below 2C.

But more importantly, the peak of Chinese coal use is changing the face of global alternative energy industry development, and is soon likely to impact on international positioning for a low-emissions future.

Now for the long answer.

Predicting climate change

Predicting future climate change is dogged by two fundamental uncertainties: the dosage of greenhouse gas that human civilisation will add to the atmosphere, and how Earth’s climate and feedback systems will respond to it.

In the absence of a crystal ball for the future of emissions, the Intergovernmental Panel on Climate Change (IPCC) has adopted a scenario-based approach which highlights four representative concentration pathways (or RCPs). These are named after how much extra heating they add to the earth (in watts per square metre).

The relationship between emissions, and temperature projections. IPCC
Click to enlarge

From these scenarios the IPCC has developed temperature scenarios. So the RCP2.6 scenario is expected to restrict climate change to below 2C, whereas RCP8.5 represents catastrophic climate change of around 4C by the end of this century, rising to perhaps 8C in the ensuing centuries.

Fossil fuels forecast

The key thing to note here is that the emissions scenarios are demand-focused scenarios that have been developed to reflect possibilities for potential fossil fuel consumption. They explore a range of scenarios that include increasing global population and living standards, as well as the possible impact of new alternative energy technologies and global emissions-reduction agreements.

Instead of examining demand scenarios for fossil fuels, our work has focused on supply constraints to future fossil fuel production. Our work is not a forecast of future fossil fuel production and consumption, but rather seeks to determine the upper bounds of the geological resource and how it might be brought to market using normal supply and demand interactions.

We developed three projections based on different estimates of these Ultimately Recoverable Resources (URR). URR is the proportion of total fossil fuel resources that can be viably extracted now, and in the future (this accounts for some resources that are technologically inaccessible now becoming extractable in the future). The low case used the most pessimistic literature resource availability estimates, whereas the high case used the most optimistic estimates.

We also included a “best guess” estimate by choosing country-level resource values that we considered most likely. We then compared the resulting emissions profiles for the three upper bounds to the published IPCC emissions scenarios, as shown in the figure below.

Our projections for fossil fuel supply (black) matched with emissions scenarios (colours). RCP8.5 is the worst, RCP2.6 the best. Gary Ellem
Click to enlarge

In comparison to the published emissions scenarios, we found that it was very unlikely that enough fossil fuels could be brought to market to deliver the RCP8.5 scenario and we would recommend that this be removed from the IPCC scenarios in future assessment reports.

Mining out the optimistic fossil fuel supply base could perhaps deliver the RCP6 scenario, however, our best guess limit to fossil fuel availability caps the upper limit of emissions exposure to the RCP4.5 scenario (roughly equivalent to a median estimate of 2C warming).

But even under the low resource availability scenario, it will be necessary to leave some fossil fuels untapped if we are to meet the conditions for the RCP2.6 scenario or lower (to have more than a 90% chance of avoiding 2C temperature rise).

To sum up, our supply side assessment suggests that even if the climate Armageddon of the RPC8.5 scenario were desirable, it is unlikely that enough new fossil fuel resources could be discovered in time and brought to market to deliver it. To be clear, there is still much to worry about with the RPC4.5 and RPC6 scenarios which are still possible at the limits of likely fossil fuel resources.

So a simple reflection on global fossil fuel limitation won’t save us … but nations don’t face peak fuels at the same time. A country-level analysis of peak fuels suggests the possibility of a very different future.

How China could shake the world

As part of our assessment we looked closely at the fossil fuel production projections for four countries including China, Canada, the United States and Australia. Of these, China is by far the most intriguing.

China has little in the way of oil and gas resources and so has established its remarkable industrial growth on exploiting its substantial coal resources. Our projections indicate that the rapid expansion in Chinese coal mining is rapidly depleting this resource, with Chinese peak coal imminent in the mid-2020s under even the high fossil fuel scenario, as seen in the projections below.

Various scenarios for China’s fossil fuel supply. Gary Ellem
Click to enlarge

China is well aware of this and is currently scrambling to cap coal consumption and develop alternative energy projects and industries. Its leaders understand that the alternative energy sector is really an advanced manufacturing sector, and have moved to position themselves strategically as the world leader in solar, wind, hydro, battery and nuclear technology construction and manufacturing.

As fossil fuels start to fail China as a path to economic and energy security, China will join other regions in a similar position, such as the European Union nations, which have largely depleted their fossil fuel reserves.

For these nations focused on alternative energy investment for energy and economic security, global action on climate change is strategically aligned with their industrial strength. We can therefore expect them to pressure for increasing global action as a method of improving their strategic global trading position. We may see the beginnings of this transition at this year’s international climate talks in Paris this year, but it will take a few more years for the Chinese shift to play out as they exploit the remainder of their coal resource and gain confidence in the ability of their alternative energy sector to scale.

The question then becomes “can the USA manufacturing sector afford to be out of these global alternative energy markets?”. Our guess is “no” and a global tipping point will have been reached in the alternative energy switch.

This is perhaps the most profound way that peak fuels may contribute to a low-emissions future.


23 02 2015

Be prepared to be regaled by truly stunning photography, even when it’s ugly…..  A must watch film.  Anyone who enjoys their cushy lifestyle needs to know at what cost.  Share widely.

We are living in exceptional times. Scientists tell us that we have 10 years to change the way we live, avert the depletion of natural resources and the catastrophic evolution of the Earth’s climate.

The stakes are high for us and our children. Everyone should take part in the effort, and HOME has been conceived to take a message of mobilization out to every human being.

For this purpose, HOME needs to be free. A patron, the PPR Group, made this possible. EuropaCorp, the distributor, also pledged not to make any profit because Home is a non-profit film.

HOME has been made for you : share it! And act for the planet.

Yann Arthus-Bertrand

HOME official website

PPR is proud to support HOME

HOME is a carbon offset movie

More information about the Planet

Peak Aviation anyone…?

30 08 2014

I wasn’t going to write another post this weekend….  we are trying to get our property ready for Sustainable House Day which starts next weekend, and I shouldn’t be at this keyboard, again…..  However, this very interesting piece of news just landed in my newsfeed, and it got me thinking, again…..

It all started with this week’s announcement that QANTAS lost almost 3 billion dollars this last financial year.  Then Virgin Australia (a smaller airline) lost 388 million dollars.  I’m not exactly surprised.  The last two times I flew to Tasmania, it cost about $400 return, or half what I remember paying 20 years ago when oil was only $10 a barrel!

Then Malaysian Airlines, which admittedly has had its fair share of bad luck, has just announced it will cut 30 per cent of its workforce, trim routes and replace its CEO as part of a restructuring that will cost $2.03 billion…..

And if that wasn’t enough, along comes this other piece of news:

The lowest seasonal supply of jet fuel on record is pushing prices higher and leading to voluntary restrictions in the New York region as the nation’s busiest air hub prepares for a holiday rush.

Spot jet fuel in New York Harbor, the trading center for the U.S. East Coast, jumped to 22.5 cents a gallon above diesel futures this week, the biggest premium in three years. Stockpiles in the region fell to 8.83 million barrels last week, the lowest for this time of year since at least 1990, government data show. Airlines received an industrywide request yesterday to limit the fuel they take from John F. Kennedy International airport.

 How could this be happening, you may ask, as the US is producing more oil than it ever has in at least a decade?  Well my dear reader, if you actually think about it, to produce all that oil, a fair bit of which is low ERoEI shale oil, you have to use a lot of that other stuff, the high ERoEI oil still coming out of conventional oil wells.

What they do you see, is that they add up the production of the good stuff with the production of the awful stuff, and a really good number comes out of the spreadsheet.  Trouble is, that total is NOT nett energy….  There is actually way less REAL energy available to put in those planes than the numbers tell you.  So the people who leave comments on this blog saying ERoEI is irrelevant, here is proof that it is!

Peak aviation may well be with us already.  And I expect the cost of fuel and flying and driving may well be on the cusp of a sudden price rise, as Peak ALL liquid fuels is due to occur sometime around the end of this year, +/- 3 months.  If you look at that error number…..  it may have started right now!

Australia headed for energy crisis……

12 07 2014

The news coming in regarding Australia’s energy security are getting more and more worrisome.  Add to that the fact we will soon be totally out of oil, and you have to wonder “what next?”.  We are seemingly led by total morons who have no idea what they are doing, consider money to be far more valuable than energy, and in the process are leading this country to rack and ruin…..  How long we have left before all our chickens come home to roost is anyone’s guess, but the mining industry is already starting to sack people (and we haven’t even hit Peak Mining yet..), [official] unemployment is back up to 6%, and it’s high time the people of Australia got rid of the idiots in charge…..

Matt Mushalik

Matt Mushalik

Energy Super Power Australia’s East Coast running low on affordable domestic gas

In July 2006 then Prime Minister Howard declared Australia an energy super power. 2 years earlier his energy white paper set the framework for unlimited gas exports while neglecting to set aside gas for domestic use. It is a bitter irony that at the 10th anniversary of this energy white paper we read that gas shortages in the Eastern market will result in price increases and that there is not even enough cheap gas for gas fired power plants which are supposed to replace dirty coal fired plants or serve as a back-up for renewable power. Wrong decisions a decade ago (or even earlier) now come to the attention of the public as price rises hit the pockets of consumers.

And what has been completely forgotten is that natural gas is the only alternative transport fuel to replace oil. Conventional oil peaked in 2006 (Yes, Prime Minister, under your watch), US shale oil is likely to peak before 2020 and the Middle East is disintegrating in front of our TV eyes faster than energy and transport planners can change their perpetual-growth mindset. An energy equivalent of 5 LNG trains is needed to replace all oil based fuels in Australia. This gas is locked away in long term export contracts. Well done. Les jeux sont faits.

(1)          Recent events

Electricity providers return to coal-fired power as natural gas export revenue soars

The rising international price of natural gas is causing electricity providers to return to coal-fired power, with Queensland among the first to make the move.

Fig 1: Tarong power station in Queensland

University of Queensland energy analyst Dr Liam Wagner says the rising price will push other power companies to make similar decisions.

“Gas-fired electricity is becoming more expensive; gas in Australia is going to become more expensive with exports,” he said.

“In the future we’re going to have less gas because it’ll be far more expensive to burn it here and the gas producers will be able to make more money overseas.”

Nation will be paying the bill for poor energy policy

The government, unlike other governments around the world, allowed unfettered access to global markets. The building of the export gas terminals will push the prices for gas inexorably up towards world prices. Indeed, wholesale gas prices are widely forecast to more than double to match international prices.

Many in the gas industry are calling for the rapid development of environmentally suspect coal seam gas fields in NSW to counter higher prices. This policy simply will not work as prices on the East Coast are now linked to world prices. No amount of domestic production will change this dynamic.

As we can see in the following report, AGL is proud to have connected the domestic market to the Asian market to make quick profits, instead of developing a plan which would use gas domestically in the medium and long-term to maximise economic benefits for the local industry. The quarry mentality continues. The expected shortages are presented as an argument for even more coal seam gas.

AGL raises spectre of gas rationing if gas shortages are not tackled, it tells the NSW Government

Gas shortages will lead to rationing along with job losses, especially in Sydney’s west, energy utility AGL has warned as it intensifies pressure on the NSW government to allow the development of gas projects in the state that tap gas trapped in coal seams.

This is the report:

AGL Applied Economic and Policy Research

Solving for ‘x’ – the New South Wales Gas Supply Cliff

March  2014

“During this discovery and appraisal phase, it was evidently clear to resource owners that the east coast gas market was not sufficiently large enough to enable the monetisation of reserves in suitable timeframes and at the scale necessary to maximise profit, and so developing an export market for natural gas in the form of LNG was a logical strategic solution. Not only would it result in the rapid expansion of aggregate demand, but would also have the benefit of linking domestic gas prices, historically ca $3 per gigajoule (/GJ), to the north Asian export market price of ca $6-9/GJ equivalent ex-field ‘netback price’ over the medium term(p 2)

“On Australia’s east coast over the period 2013-2016, we forecast that aggregate demand for natural gas will increase three-fold, from 700 PJ to 2,100 PJ per annum, while our forecast of system coincident peak demand increases 2.4 times, from 2,790 TJ to 6,690 TJ per day. This extraordinary growth is being driven by the development of three Liquefied Natural Gas plants at Gladstone, Queensland”.  (p 1)

“Almost simultaneously, a non-trivial quantity of existing domestic gas contracts currently supplying NSW will mature. Much of that gas has been recontracted to LNG producers in Queensland – thus creating a gas supply cliff in NSW. Compounding matters, recent policy developments have placed binding constraints over the development of new gas supplies in NSW”(p 1)

Fig 3: NSW gas supply cliff lead to price increases


These developments are a bitter irony given that the public has been told many times that Australia’s gas resources are abundant. All LNG export contracts were presented as great achievements.

(2)  Wrong decisions 12 years ago

Although LNG exports to Japan had started in 1989 (20 years contracts with 8 power and utility companies signed in 1985), the 2002 LNG deal with China was Howard’s first main contribution towards a poor energy policy.

Australia Wins China LNG Contract

John Howard: “I am delighted to announce that today I have been advised by the Chinese Premier Zhu Rongji that Australia’s Northwest Shelf Venture has been chosen by China to be the sole supplier of liquefied natural gas (LNG) to its first LNG project in Guangdong province.”

5 months earlier, John Akehurst, Woodside’s Managing Director, warned in a report with mixed messages:

Mar 2002

Challenges for Australia

Australia has large gas reserves which have the potential to meet a much larger proportion of Australia’s energy requirements, including liquid petroleum requirements (via CNG, LNG, Gas to Liquids). Gas for oil substitution would deliver significant greenhouse benefits and help Australia meet its Kyoto target. Increased LNG exports would partly offset the cost of rising liquids imports and help address their impact on the balance of payments.  (p 8 )

However, greater use of gas will require substantially more investment in gas production and pipeline infrastructure. Without such investment, south eastern Australian gas markets will, within a few years, face possible gas shortages. Major consumers will find it more difficult to secure long term supply contracts on sufficiently competitive terms (p 9)

Fig 4: Superimposition Akehurst forecast with actual production

LNG export projects and gas-based value adding projects are needed to underpin the cost of bringing new gas supply sources to shore and to justify the initial investment. These types of projects compete on world markets (primarily with projects in Asia) and the provision of an internationally competitive investment environment including fiscal terms is a key driver. (p 10)

Of course one cannot have it both ways. To replace petrol and diesel in Australia one would need the energy equivalent of 5 LNG trains.

(3)          Howard’s flawed Energy White Paper June 2004

Fig 5: excerpt from Howard’s June 2004 energy white paper

This white paper just rationalises decisions already made earlier by formulating following policy principles  (p 53)

  • Commercial decisions should determine the nature and timing of energy resource developments, with government interventions being transparent and allowing commercial interests to seek least-cost solutions to government objectives (e.g. environment, safety or good resource management objectives).
  • Government objectives should generally be driven by sector-wide policy mechanisms rather than impose inconsistent requirements on individual projects/private investors.

And on page 128:

Australia’s gas reserves are sufficient for more than 100 years at current production levels, or more than 200 years of current domestic consumption. Furthermore, prospects for finding and proving up more gas are good, subject to finding markets. However, the location of Australia’s major gas reserves—to the north and north-west —compared with major demand locations—to the south-east—is sometimes raised as an issue (see Figure 6 and 3 in Chapter 2—Developing Australia’s Energy Resources).”

Note the term “At current production levels” which of course is irrelevant when LNG exports are doubled or tripled.

Fig 6: Map of oil and gas resources in the EWP 2004

Fig 7: Map of gas pipelines in EWP 2004


The Geoscience Report “Oil and Gas Resources in Australia 2004 writes: Natural gas has a current “life” estimated at 65 years, but past estimates have been as low as 39 years (in 1993) and as high as 76 years (in 2001). These estimates include all resources and production in the JPDA with Timor-Leste.”

Fig 8: Geoscience Australia’s reserve to production ratios


The EWP 2004 continues to argue:

“Predictions are made that supplies of gas to major urban markets will run short in the next decade, as production in the Cooper Basin and Bass Strait declines. This has resulted in calls for financial support towards the building of major pipelines from either the Northern Territory (to access gas from Sunrise and other Timor Sea fields), Papua New Guinea or north-west Australia (to access gas from either Carnarvon or Browse Basins). While reserves of gas in existing fields close to southeast markets are declining, this does not represent an energy security concern.

Exploration is occurring in the south-east and is resulting in new discoveries and development, such as in the Otway Basin. The development of coal seam methane is also increasing supplies of gas in the region. In addition, holders of the large remotely located gas reserves are actively seeking markets to monetise these reserves. These efforts include actively investigating pipeline projects for bringing supplies of gas from north and north-west sources, as well as seeking LNG export sales in Asian markets. The number and activity of these competing proposals provide a degree of confidence that these supplies will become available once economic, noting that this will in all likelihood occur at higher price levels than those currently enjoyed in some south-eastern markets.

Given the size and placement of gas reserves relative to current and future gas demand, gas supply is not likely to become an issue for the short to medium term. Pre-empting market outcomes in these circumstances is unlikely to add significantly to energy security, but could inflict significant costs by precluding less costly options (such as further development of the Gippsland and Otway basins or coal seam methane).”


The task of building North/West-East gas pipelines was not pro-actively followed up by State and Federal governments but dropped altogether in favour of exports. No wonder this laissez-faire approach went wrong.

CO2 emissions

The EWP 2004 argues:

“The shape of future international action on climate change is unclear, but the potential costs of future adjustments and long life of energy assets makes it prudent to prepare for the future.” ( p 131)

LNG development could increase Australia’s energy emissions by around 1 per cent of energy sector emissions. However, to the extent that exported Australian gas replaces more greenhouse intensive energy in the importing country, global emissions may decrease as a result of Australian gas production  (p 137)

This is just an argument in favour of LNG exports while none of the LNG contracts included a clause that coal fired power plants equivalent to the energy content of the gas should be decommissioned in the destination country. The above example of Queensland going back to coal shows that not even in Australia the job of using gas to reduce emissions is taken seriously.

(4) Energy super power declared in 2006

The Prime Minister has outlined his vision for energy and water, saying the nation has the makings of an energy superpower.

(5) Actual gas production

Let’s have a look at gas production statistics

Fig 9: Australia’s gas production 1977-2013

 Data are from APPEA: http://www.appea.com.au/?attachment_id=5192

We see peak gas in the Cooper basin between 1999 and 2002 at around 260 bcf. Right at that peak, Howard failed to pursue building a gas pipeline to connect Western offshore gas with Eastern gas markets.  While LNG exports on the West coast surged, the East coast remained on a bumpy production plateau.  Western Australia has a 15% Domgas policy but also did not introduce gas as a transport fuel. As WA’s LNG gas goes out the window, Queensland and NSW are forced to go for environmentally questionable coal seam gas.

Fig 10: Australia’s LNG exports

The first 3 trains (2.5 mt pa each) mainly supply Japanese utilities, while the Guangdong contract (3.3 mt pa over 25 years) required train 4 (4.4 mt pa)

(6) Conventional gas depletion in NSW, Victoria and South Australia

The Australian Energy Market Operator (AEMO) estimates in its Gas Statement of Opportunities 2013 that current conventional 2P reserves would be depleted by the mid of the next decade.

Fig 10: Depletion of conventional gas reserves (2P) in the South East

“Under the modelled production-cost conditions, consumption of Denison Trough 2P reserves occurs first in 2019. Consumption of Otway Basin 2P reserves begins in 2020, and it is completely consumed by 2023. Bass and Cooper basin conventional 2P reserves are consumed in 2025. Gippsland 2P reserves are consumed in 2026. The 2P CSG reserves in Queensland are sufficient to supply demand until the end of the 20-year outlook period.”

Fig 11: Gas shortfalls in the South East

 “Additional 3P reserves and 2C resources are available in the Otway, Bass, Gippsland, and Cooper basins. The 3P/2C reserves in the Bass, Gippsland, and Cooper basins are sufficient to ensure supply until the end of the 20-year outlook period, provided current transmission and production limitations remain unchanged. The 3P/2C reserves in the Otway Basin are only sufficient to ensure supply until 2028 or 2029, depending on the level of support the southern states receive from production in the north.

Given its role in supplying demand in Adelaide, Melbourne, and Sydney, the Otway Basin reserves consumption is a significant event, with substantial infrastructure investment required to manage changing system flows.”


(7) Domgas Alliance report

Australia Domestic Gas Policy Report (Nov 2012)

History has proven that countries with large resource endowment do not automatically gain an economic competitive advantage over countries that do not have such surplus endowment of resources. Exporting countries have to take the necessary precautions to avoid what are known to economists as the Natural Resource Curse and Dutch Disease. Australia’s large LNG export boom, that is well underway, has the capacity to trigger both of these symptoms and the subsequent regrets.

Gas resource rich countries rely on a comprehensive menu of interventions and gas regulations and policies in order to protect the national interest and the best interest of the general public regarding the use of indigenous gas production. Benchmarking illustrates that Australia does not manage its gas resources adequately to ensure that gas explorers and production companies operate in a manner that is consistent with a vibrant domestic gas market.

Gas resource rich countries, regions and continents generally export gas only after they first develop their own domestic gas market into a vibrant one that has very high gas consumption rates per capita and a high gas penetration in the total primary energy supply. To do otherwise destroys value and effectively de-industrialises the exporting region.

Australia needs to have sufficiently comprehensive policies and regulations in place in order to control and manage the export of raw commodities. Simply relying on market forces without comprehensive guidelines and controls to mitigate inequitable market power is one extreme while nationalising all resources is the other extreme. Neither of these scenarios has proven to serve the public interest very well.


(8) Gas price outlook

The following graph from the Eastern Australian Domestic Gas Market Study by BREE, Department of Industry, shows Energy Quest’s doubling of gas prices by the end of this decade.

Fig 12: Gas prices will double



Decisions on excessive LNG exports have been made more than 10 years ago and are irreversible. They continued ever since – irrespective of which State or Federal governments were in power –and will lead to yet more LNG exports.  Consumers will have to pay higher gas prices for having elected these governments.  Another regret will come in the next years when it becomes clear that gas is needed as transport fuel.

Fig 13: Glimpse into the future: truckies protest drive around  Canberra’s Capital Hill

Previous articles on this website on gas

9/5/2012    Queensland plans to export more than 10 times the gas NSW needs (part 3)

6/5/2012   Howard’s wrong decisions on offshore gas exports start to hit transport sector now

13/10/2011    NSW gas as transport fuel. Where are the plans?

11/10/2011   Australia’s natural gas squandered in LNG exports

Still on target……..

15 02 2014

Every year, I download the Bureau of Resources and Energy Economics’ oil production data.   BREE’s data comes in spreadsheet form, and are official Federal Government data…… they are not numbers I make up, and as anticipated, the news are not good.  The production rate has fallen year on year during 2013 by a whopping 18.3%……  as I keep saying, imagine if the economy itself shrank this fast…?

The spreadsheet is available at http://bree.gov.au/sites/default/files/files//publications/aps/2013/aps-209-201312.xls if you want to see for yourself.

Using this data, I produced the following chart:


As you can see, we are still on target to totally run out of oil sometime around 2020, which is now just six years away.  The silence over this gobsmacking trend is deafening…..  Of course, it is just a projection, a trend.  Things could miraculously improve, but they could also get worse……  for instance, why does it say on the spreadsheet “Petroleum production by basin data is currently under review and publication of this data is suspended until further notice.”?  The cynic in me can’t resist the idea they’re hiding something…..  like, is Bass Straight on the cusp of collapse?


Australia’s $50 billion petrol industry is set for its biggest shake-up in decades, with energy majors Royal Dutch Shell and BP considering the sale of refineries and petrol stations in order to free up cash for their core energy production businesses, reports The Australian Financial Review.

Shell chief executive Peter Voster said in November last year that the company was “entering into a divestment phase” amid rising costs for energy projects and investor concern about capital expenditure…..

It is believed BP is also examining a $3 billion sale of its petrol stations and refineries in Queensland and Western Australia. BP supplies fuel to about 1400 petrol stations of which it owns about 225….

There is speculation Chevron may follow BP and Shell and consider selling out of service stations in Australia. A spokesman would not comment.

You can add these as yet more red flags to the collection of automotive manufacturing collection.  I expect QANTAS will be the next bull in the china shop…..

The adults morons running this country not only have no idea of what’s going on, they want to make it all even facepalmworse….

APPROVAL for a second Sydney airport at Badgery’s Creek could be given within months, with federal Treasurer Joe Hockey pushing to fast-track a decision to include the project in the government’s first budget.

Wonders will never cease….. if this goes ahead, it will be finished right on time for no fuel available to run the planes.  And you wonder why I think we’re screwed…