Australia: The Place To Be (Part 1)

This is a guest post by David Clarke. David has worked as a consultant analyst for almost 30 years, spending the last 15 years consulting mainly in IT. David has owned and sold an IT startup, but now prefers the pampered life of a manager in one of the Big 4 Accounting firms. He has close friends in the energy industry and blames them for introducing him to Peak Oil, and bursting his happy bubble. You might occasionally encounter him on TOD as aeldric.


I am an analyst by training, profession and inclination. So when my son was born, 24 months ago, I decided to do a quick risk assessment. What would the future hold for him?

The answer was not quite as cheery as I had assumed.

I grew up at a time of unbridled optimism. I have never missed a meal, never fought in a war, and never had any need or want unanswered. As a result, I am a hopeless optimist.

We all instinctively assume that the best predictor for the shape of tomorrow is the shape of yesterday, so let me tell you about my yesterday: I attended my first meeting at 10:30 am. Looking to the right I had a view of the river, as it winds through the city. To the left I could look out at the bay and watch the ships come in. As soon as the meeting started one of our catering staff came in. The waiters and waitresses on our catering staff are attractive, well groomed, and they know that I like a small piece of white chocolate fudge with my coffee each morning.

Why am I telling you this? Because your life can color your outlook. Every writer about Peak Oil has prejudices. Some are "Doomers", I am not. Possibly my easy life colors my analysis, I leave it for you to decide.

This is the first of three articles in which I will talk about:

1. Where are we, how did we get there, what’s in our immediate future? The next 5 years in Australia.
2. Scenarios and threat analysis. Australia out to 2020.
3. Social solutions and personal preparations.

So here is Part 1 - an introduction to our situation here in Australia, and an overview of the next 5 years.

For most readers of TOD there will be no surprises, but I would like to highlight that it is not all bad news – there is plenty of good news as well. Let’s finish with the upbeat shall we? So, Bad News first:-

The Bad News

  • We are entering a time of resource depletion.
  • Jeffrey J. Brown (Westexas) and others at The Oil Drum have pointed out that oil exports are already starting to decline.
  • Droughts and other events that are probably related to Climate Change have devastated crops in several nations (including Australia, Argentina and the US) in recent years. Global warming appears to be leading to worsening water shortage here in Australia
  • Global grain reserves are at dangerously low levels, as the world has eaten more than we have produced for 6 out of the last 7 years (note that this trend should not be considered irreversible, grain levels are dynamic and subject to change)
  • Fisheries are collapsing all around the world
  • Sea levels could well rise dramatically in the coming decades – probably by at least 30 cm, perhaps by meters
  • Other problems, such as a depressed economy and reduced soil productivity, circle us like hyenas around a wounded wildebeest.
  • And the most worrying problem: The solutions for most of the problems above are blocked by one or more of the other problems. For example oil depletion can be partially addressed by using technologies such as coal-to-oil conversion – but this solution has dramatic and intractable climatic and CO2 problems.

So we face fewer solutions than we have problems…..what is the Good News?

The Good News

  • Australia is a continent of coal, topped by mountains of Uranium. It is surrounded by a sea of Natural Gas punctuated by reefs of Shale Oil....OK, perhaps that is a little bit of hyperbole, but we are a very energy-rich nation. We are a net energy exporter.
  • In addition to our energy resources, you can’t seem to dig a hole in your garden without hitting a seam of iron, gold, zinc, or some other resource.
  • We have a population of only 20 million in a country nearly the size of the US.
  • We are completely self-sufficient in food; in fact we are a net food exporter.

If you have to live through a time of resource-depletion, this is the continent you want to be in.


So the world has a bunch of problems? And the solutions for the problems are blocked by the other problems? Fine. But the real crisis is decades away right? Aren’t people talking about dates around 2030, or even later?

Well, I hope so. In fact I said exactly that in a newspaper article 18 months ago. But now I am not so sure. Things seem to have ratcheted up in the last 18 months.

There is a simple way to look at this. You only need three pieces of data:

1. The production and/or export of several key resources is diminishing measurably every month. For example: Oil exports are declining. Fisheries are collapsing. Grain production seems to be faltering. World production of several key minerals (such as lead) is down (though I should note that, unlike oil, lead can be recycled). Each month the quantity being produced (or exported) for each of these resources is declining while the quantity consumed is going up.
2. As a result, the reserves held in stockpiles around the world are declining just a bit more each month.
3. The reserves held in these stockpiles are measured in days. In the case of grain, we have less than 60 days of reserve left in stockpiles world wide.

If the trends continue, then these three simple facts add up to bad news. Based on this, my belief is that our timeframe for solutions is measured in years, not decades.

Worldwide: Location of the most severe impacts

We need to remember that although these are world-wide problems, the world is a very variable place.

- Resources are not evenly distributed
- Population is not evenly distributed
- Wealth is not evenly distributed.
- Carrying capacity (the ability to support a population) is not evenly distributed.
- Political stability is not evenly distributed.

Here in Australia we hit the jackpot. We have high resources, low population, good wealth, fair carrying capacity (when compared to population), and good political stability. Countries without those attributes are obviously more vulnerable when something goes wrong.

The list of vulnerable nations includes “The Usual Suspects”: Parts of Africa, parts of Asia and portions of Latin America. This list sounds familiar because this is not the first time that the world has had problems. Every time we have a problem, these vulnerable areas get hit first and worst. This is not fair, and I am not going to try to find some kind of higher explanation, I am just going to leave this obvious inequality as an observation.

Let us review how things work when the world runs into scarcity. Suppose that next year high oil costs lead to high costs for fertilizer and transport. At the same time a climate-change drought occurs in food-growing nations and consequently a slight food shortage occurs.

If the problem is a 5% food shortage, then the price of food goes up, and economic principles take over. High prices lead to “demand destruction” and the world uses 5% less food next year. The areas that can’t afford the price rise will suffer the most; that is how demand destruction works. We don’t all consume 5% less food, instead most of us consume (perhaps) 1% less and the 4% who are most vulnerable consume almost nothing, leading to a catastrophe in the vulnerable area.

Nations hit like this frequently collapse. This does not surprise us, nor does it worry us because we don’t believe that it could happen to us. However we should be worried - even relatively advanced nations can collapse.

In recent history we have seen collapses in Russia (after the fall of communism), Argentina (after an economic collapse) and Cuba (when the fall of communism led to the loss of most of Cuba’s imports and exports), just to name three of the most high-profile casualties.

In a frighteningly short period of time Russia went from being one of the most powerful countries in the world to being a nation where the elderly froze and the children starved. If a political crisis can trigger a collapse in resource-rich Russia, we should not dismiss the notion that a crisis might trigger a collapse here in Australia.

But we should note that, while each of these nations suffered a collapse, each nation also recovered. My less optimistic friends point out that these nations recovered in a world that was not resource constrained. This is true. They also point out that Jared Diamond filled an entire book (“Collapse”) with examples of collapses with little or no subsequent recovery. Rwanda is a recent example.

Before nations can recover, a new equilibrium has to be found and a new structure to support that equilibrium must be built. In each collapse the population found themselves living beyond the capacity of their resources - either because resources weren’t available, or because of a failure of support, production or distribution systems for the resources. New systems and practices were needed in order to bring the nation’s consumption within the capacity of their resources.

In the examples that I provide the resource constraints in each nation were not severe. Russia and Argentina in particular are relatively resource-rich, their problems were more about systemic failures that led to dislocations in producing and distributing - essentially, the compex interdependencies between people broke down. Despite the fact that adequate resources were present, the recovery process was not pain-free. If resources are severely constrained in a future collapse, the pain is likely to be more severe.

I have already said that Australia is a relatively resource-rich nation. In a world where many nations are living a resource-deficit lifestyle, we are a resource (and energy) exporter. So finding a new equilibrium may not be as painful for us as it may be in some other nations. In other nations equilibrium may not be possible without a reduction in population. This thought is so unpleasant that I consistently shy away from it.

Population and Consumption: “Now this might hurt a bit....”

Everybody recognizes that the core of the world’s problems is population and the associated levels of consumption. Most of the problems that we face as we approach a population of 7 billion people would simply vanish if the number of humans on Earth was lower or our consumption levels were more like India and less like the US. Certainly, we need to consume less. And unless we make a dramatic cut in consumption very soon, then some level of population reduction may also occur as a result of the situation that we are about to face.

As I grew up, I saw some behaviors change here in Australia. We gave up a lot of the silly, unnecessary things that our grandparents did. I remember that my grandma used to recycle milk bottles. She would also reuse jars, refilling them with home-made jam. She had a string bag for shopping, and a compost bin for vegetable scraps. She used to let the chickens out every morning so that they could scratch around in her back-yard veggie garden. Her garbage bin was always empty, because she never threw anything out. The lessons of The Great Depression and WWII never left her - she actively avoided unnecessary consumption.

Today we consume because we believe that consumption is a good thing – ever-growing consumption supports an ever-growing economy.

In hindsight the mistake is obvious – you can’t have ever growing consumption if the things you are consuming only exist in limited quantities. Thirty years ago, when the question was first raised, the limits seemed a long way in the future. Now, a number of scientists and Engineers are crunching the numbers on how much oil, lead, zinc, gallium, tellurium, etc is left. The answers are terrifying.

We are now approaching the limits, and these limits are manifesting themselves in the form of high prices and demand destruction. Soon there will be a payment for our mistakes. But who will do the paying? We know the answer. Any country that is marginal for whatever reason – whether this is due to poor carrying capacity, bad leadership, or just bad luck. "The Usual Suspects", as always, will measure the price in human lives.

I don't want to dwell on this, but I do want to remind myself what this could mean - Fathers like myself could be unable to find enough food, and they may watch their young sons die. Mothers may mourn as their milk dries up and their babies slowly starve. If it gets to point where war and famine are the only options remaining, then real people are going to die. "Demand destruction" is not just a mathematical abstraction, as the economists seem to believe, it impacts real people in real ways. We cannot afford to be complacent. If we cannot balance the ledger on the "consumption" side, then "population reduction" is the other alternative.

Here in Australia, I believe we will pay a lower price for our laziness. But we may have to learn to do the silly things that my grandmother did. Water for our gardens comes from a tank, not a tap. Power is not something to rely on 24 x 7. Save your string. Let the chickens out to scratch in the veggie garden.

The alternative to falling population is equilibrium through conservation, not consumption. We know the answer, we see it every day: Reduce, Reuse, Recycle.

I was born in Australia. The fact that I may pay a lower price than “The Usual Suspects” is not due to any virtue on my part – it is luck. It is not for nothing that we are called “The Lucky Country”.

Problems We Will Face in Australia

So Australia is the place to be? We have no problems to worry about as we transition to a post-carbon future? We all know that is crap. Here is a list:


If you are living in Australia I don’t need to tell you that Australia is dry. Many of our cities came close to power outages last summer because there was too little water to cool the power stations.

We are being warned that the same thing could happen this summer. Many politicians suggest that desalination will solve our problem. Desalination requires huge amounts of power. Our power stations need water for cooling, and this water is scarce in summer, so we are being told that we may need to cut back on power usage in summer, exactly when the demand for water is high, and thus when the desalination plants will need the most power…. Hmmm… I the only one who sees a problem here?


Australia is comparable to the US in size (the contiguous bit - not counting Alaska) but we have a fraction of the US population, so we should be on Easy Street right? Not so fast. The US was a country of forests and prairies, while Australia is so hostile that half our native animals have learned to live without ever needing to drink, and the other half form a good starting point if you want to compile a list entitled “World’s Most Venomous Creatures”.

Living in the city, we sometimes forget that this is not a particularly verdant land. Our country has little arable land, and the arable land that we have is already showing signs of strain as Climate Change starts to bite. For the last 6 years we have started the year with optimistic predictions of huge crops, and finished the year with a fraction of the original forecast. Yes, I still think that Australia is the place to be. Yes, I think that we can make it. But it won’t be easy. I expect to lose a little weight over the next 2 decades.

The Economy

Personal Debt has risen in Australia at an alarming rate. We now owe, on average, 3 times more (in real terms) than we did in the 1970s. We can’t afford to feel too smug as we watch the economic carnage emerging in the US; we have our own economic risks to face.

Oil and Natural Gas

We are an energy-rich country, but the oil situation is Australia is not as good, or as simple, as our coal and gas situation. So here is an attempt to simplify it:

Although we produce oil that is equal to about 60% of our needs, the oil we produce is generally not used in Australia. After it is refined, our oil has a balance of heavy and light components that does not match the market here in Australia. So we ship our oil off to nations that match our oil’s profile, and we ship in oil that more closely matches our usage profile. Obviously, in event of a major disruption, our oil supplies are not guaranteed. Our refineries could be re-tasked to refine our own oil if necessary, but this process would be neither easy nor efficient.

Our oil is depleting at around 5% per year. (Give or take. Our depletion is relatively slow by world standards because small new fields are found from time to time, and good management has led to good oil recovery.) Our demand for oil is going up at around 1-2% per year (depending on factors such as economic development for each year). Given that we are already importing around 40% of our oil, mathematics would suggest that in 5 years we could be importing around 55% of our oil. So in 5 years we will need to increase imports from the current 40% of our total oil usage to 55%.

But there is a problem. The amount of oil being exported by producing nations is not increasing, it is dropping. Why? The governments in oil exporting nations are providing cheap oil to their domestic market. This leads to high domestic consumption in producing nations, and this local consumption is eating into their export numbers. As a result oil producing nations are exporting less.

The decrease is running at about 1% per year at the moment, but this is likely to increase. Current projections suggest 8% less oil will be exported from producing countries within 5 years (see the research paper by CIBC: ).

So oil imported from producing countries will not continue to rise, and thus will not meet 55% of our needs. If the mathematics can be believed then imported oil supplies will drop, to meet about 36% of our needs, not 55%. This is a 19% shortfall in Australia’s oil needs, within 5 years!

Of course, this is just a mathematical exercise, designed to illustrate what will be happening all around the world. It does not take into account numerous possible factors – both mitigating and contributing (for a better analysis of Australia’s specific oil depletion profile, see

The purpose of this exercise is to give a feel for the scope and immediacy of the possible problem. If it was real, a 19% shortfall in 5 years would be a significant inconvenience (there goes my trip to Cairns), but not a life-threatening disaster. The reality will depend on what happens in the rest of the world. The same problems will be playing out in every importing nation, and we will be impacted by how they respond.

China and the US are importing nations. If their economies continue strong, they might have the economic capacity to take most of the oil, leaving us with a trickle. On the other hand, a world-wide economic downturn could leave the US economy crippled, unable to afford high oil prices, and leave us with a comfortable level of oil.

The outcome depends on economic, political, social and military factors far beyond my power to predict. Only one thing is certain – scarcity leads to higher prices. If we look further than 5 years in the future, it is likely that oil supplies will be impacted by more than just decreasing exports, but more on that in Part 2.

The natural gas situation is better. We have a LOT of natural gas. Over the next decade we are likely to need it. If oil supplies are low, then we will need to convert entire fleets of vehicles to gas, and build the necessary infrastructure to extract and distribute that much gas.

To avoid disruptions, this will need to be done in a short time frame, perhaps 5-10 years. The engineers I talk to feel that the project is achievable, but not in that time frame. Twenty years is a more achievable time frame.

So, although there is uncertainty, the mathematics provides a clear indicator – even in resource-rich Australia “Business As Usual” is not really an option, we are going to have some problems as infrastructure lags behind the demand created by resource constraints. If trends continue, then these problems will emerge in less than 10 years.

The problems we face have been significantly mitigated by our access to local resources. Taken in isolation, the Australian problems are not insurmountable; however the response of the rest of the world will undoubtedly impact on us. The precise nature of this impact is hard to predict, but is unlikely to be helpful to us.

So there we have it. Things change. Both of my parents went very hungry during the depression and then lost fathers and uncles in WW II. Following those hard times they saw things change, and witnessed the prosperity of the post-war boom years. Yet they speak with more fondness of the hardships in the depression and WW II than they do of the years of prosperity that followed.

In the years to come my own story could be a mirror-reverse of their experiences. From the day I was born I saw an era of unfettered growth, but in the years to come I will see things change. This does not need to be a bad thing – but it will be a period that we need to prepare for.


In Part 1, I presented these arguments:

- In the coming years, there will be good places to be and bad places to be.
- Australia is a better place to be than many of the other options
- However we will not be without problems.
- The events in the rest of the world could have a significant impact on us.

In Part 2, I will talk in more detail about how I see these problems panning out here in Australia.

Very insightful mate!

Australia has few more problems than that though. The massive immigration of people who know nothing of the land since the time of your grandmother. However not to say this cannot be fixed if there was some decent minded people (Australia is chocked full of them) and teach.

The main concern I have towards Australia is that the water that is there... May not be there in the future. You read the recent articles about 60 year drouts in the USA southwest what is to stop that from occurring in the Direst Vegitated Continent on earth?

Australia is in a good position to do Nuclear power however. I do think it is a just thing to do. Australia has little to no seismic hazard only one volcano that is fricken old. So why not do it? As you said the Desal takes lots of power so use nuclear to power it using ocean water to cool it,. The tasman is bloody cold enough :)

I look forward to seeing your next post :)

Hello from Brisbane,

As an immigrant, I can easily see that Australia, in comparison to the USA and Europe, has a much better ratio between its population and national resources.

So, this country really is a big bar of Cadbury chocolate.

The problem I can see is that we are surrounded with countries like Indonesia, Malaysia, India.. that all have a 100 million people or more. When things in those countries get hairy, and crowded rafts with hungry and desperate refugees start arriving to Australian shores, the question is, what are we going to do? How to stop them? With megaphones? With machine guns? I don't think so, and I don't want to believe in such scenario. But it keeps bugging me.

I'm glad Miroslave is bringing this to the fore: every place on earth with a relative abundance in the coming squeeze is going to see an ever growing influx of the deprived, the sick, and the destitute, even from different continents.
Dear David, a hat tip to your honest presentation of the 'mild' Ozzy predicament, but I think you're trusting on your splendid isolation too much.
Miroslav is putting the obvious question: what are you going to do, when they're coming in droves? There'll be too many of them to put into 'guarded camps'. You'll feel obliged to feed them, and this will bring on more and more to your shores.
Megaphones will not scare them away, for they are starving and desperate. The MSM will bring their sorrows into your very homes, and people inclined to charity will clash on your very streets with the hard-liners, who, in the end, will opt for gunning those rafts at sea.
In ten years time the Ozzy population may double, and then your supplies will dwindle two times faster, than you're exspecting today.
Yes, it's the ultimate question, but a little premature. But, maybe, in five years or less, the 'haves' are going to make a stand, to protect their shores and borders against a stealthy invasion of the 'have-nots'. On the Mexican border they're building a wall, already, as others did in Palestine.
The future will not bring 'interesting times', prepare for them to be outright terrible, with horrible decisions to be made by otherwise agreeable people. I'm afraid we'll become really scared by ourselves in the end.

I'm looking forward to your next article.


Lagedargent has brought up very good points. We need to understand the situation - Australia is NOT an isolated land.

Well, if I'm not too wrong, within 15-25 years, Australia might become the biggest refuge camp in history. Our current population is 21 million. This can double. Or triple.

This is the problem. Do we have a moral right (we, the 21 million people) to keep this entire continent, with the size of Europe, only for ourselves? No. But, are we able to welcome 20+ million people and give them SUVs, air cons, swimming pools, K-Marts, Medicare cards and Centrelink..? Again, NO. It's not sustainable. A good news is that potential refugees could live without SUVs and air cons, because they already live without them. I think our government should have a plan. The plan does not need to be exposed to the public, but it would be fair if the government (Howard's or Rudd's, it doesn't matter) simply says "yes, we are aware of this, and we do have a plan".

The way how I see it, Australia might have to draw a line between, say, Perth and Darwin, which is almost 50% of WA, and say: "OK, if you get here in a bathtub, we're not gonna send you back, we'll give some basic infrastructure, some petrol, some food, medicaments, vehicles, etc. but from that point you'll be on your own. We cannot let you in our big cities because they are already overloaded".

Yeah, I know, this is all like a 'Mad Max' scenario, but you see how things quickly progress..

I think you are forgetting a few things:

1)Crossing the sea in leaky old boats is dangerous. If people do so in large numbers, most will die on the way as the Navy will not be able to save them all. Think about logistics.

2) People aren't going to get on a boat and travel 5,000 km if they are starving. They are going to use their last remaining money to buy food. The refugees we have seen so far have relatively good resources, they are fleeing political persecution.

3) Boats have owners. Remind me again why the owners would be interested in making a long and dangerous journey which will quite likely end with their boat being burned in Darwin harbour?

4)Indonesia won't be starving, it is a tropical country producing its own food via subsistence agricultural. Global warming will increase its rainfall.

5) Anywhere north of Indonesia is just too far for refugees to arrive in large numbers, though some will die trying.

6) If you think millions of people can successfully get to Australia from anywhere, you need to look at a map and thing about logistics.

7) You don't need to machine-gun anyone to stop mass migration. You just impound and destroy every boat you can catch. See point three. "Burn the boats" is a pretty simple and effective strategy that would rapidly dry up the supply of transport. You think people are going to swim?

If we are to believe in things we cannot see or touch, how do we tell the true belief from the false belief?

Great Work David

Two questions:

1. What do you think about hot rock electricity? This looks to be a big potential asset.

2. Do you think that decentralisation and a return to the bush to re-inflate viable country towns that have been slowly wasting away for years will be a predicable reponse to the evolving crisis?

Those towns with rail access, viable local food production and a critical mass of population should become attractive alternatives to big cities.

In cooperation with Paul Roth of peakoilmedicine I have been trying to model Australian health service delivery in the age of energy descent. Declining personal mobility and resource constraints could change the ground rules of health service delivery. If the relocalisation of healthcare becomes an issue, planning for it will require an understanding of potential population shifts. At the moment it's not clear. Do you think there is a chance that disadvantaged rural people might flock to the cities as they have in the shanty town mega slums of Africa and South America? (This would seem to be unlikely.) Or will it be 'Blue Hills', 'Bellbird', 'Dad and Dave' and 'A Country Practice' revisited as enthusiastic and hopeful young families move back to the bush? Or will things not change very much at all? What do you reckon?

Thanks for all your efforts

Jim Barson

Hot rock power has a lot of potential, but is still very experimental.

Look for a post on the subject here later in the week...

Hi Jim,

I'm afraid that I don't express opinions if I feel that I am not qualified, so I am only going to offer guarded comments:
1. Hot Rocks are promising. I hope they work. Early experiments have run into technical hitches, but then early experiments always do.
2. I think that the rural population will probably increase as a consequence of more things being done locally, but this is hardly more than a guess. If we really wanted to flesh this out, I think we would need to sit a few smart people down in a room and let them bat thoughts around.

Good summary of your assets and liabilities Down Under.

Australia has little to no seismic hazard only one volcano that is fricken old.

From what I understand, the lack of volcanic activity is a drawback from an agricultural perspective. Australian soil tends to require quite a bit of nutrient application to make it agriculturally productive, doesn't it?

Yes that is true. The interior of Australia is billions of years old. The land has been separated from Africa and India for more than 100 million years. So yes, it is one of most infertile places on the planet, especially the interior.

Richard Wakefield
London, Ont.

No one is ahead of their time, just the rest of humanity is slow to catch on.

Put urine to good use no?

Urine is great fertilizer :)

I am not even close to joking here either. who the hell neeeds foertile land when you can use aquaponics or hydroponics anyway? The land means nothing. Use a inert media "Australian Soil" and run large hydropoinc systems out there.

Sure it would be a logistical nightmare but the water usage would be by far lower than conventional agriculture. It would create a market for extra fish if done with aquaponics. It would be sustainable, you can simply grow duckweed to feed the fish. Urine added to the mix creates huge potential for plant growth.

But then again I am starting to see how I can grow huge quantities of food in my living room through hydro/aqua. I am going to be expanding it to 200sqft in the garage then ultimately 400-600sqft outside in the yard for summertime growth. I will be selling extra yields at the farmers markets.

Fish and Produce fresh as you can get ripe on the vine :)

Many thanks, David Clark, for this lucid exposition. I am looking forward to the next two parts in this series. This essay clearly demonstrates the virtue of having a specific Australia/New Zealand TOD site. Not only is our energy situation different to that of our North American and European friends, so too are significant parts of our culture.

Just yesterday I happened to begin to compiling a checklist of the factors that I would need to consider in making my own practical responses to Peak Oil. As I went through the various points I began to notice that the picture of post-Peak Australia that was emerging was significantly different to the pictures of the likely post-Peak situations in North America and Europe that I have pieced together over the past two years from reading the TOD sites in those regions. For example, in most parts of Australia energy consumption for winter heating is nothing like it is in those regions. Another point of difference, particularly with respect to the US, is in the field of political culture. Despite some recent faddish fascination with privatisation and the notion that markets can solve everything, Australians have, historically, had greater faith than their American cousins in the capacity of governments to address social and economic problems. I am not saying that our governments are currently addressing Peak Oil in a comprehensive and systematic way, just that we do not have the same level of scepticism, cynicism, even fear, that is often displayed on the TOD USA site about the role of government. Hence we are likely to address the problems of Peak Oil with policies and methods that differ from those that are proposed or adopted in other countries.

There are a number of other comments I could make but it is getting very late. It is now 2.15 a.m. and I must get to bed as we lose an hour sometime soon in the change-over to daylight saving. (I am up late because I cannot sleep as my neighbour’s daughter is celebrating her 21st birthday with loud music ----which I do not resent (she will only be 21 once).

Again, many thanks, David, for this first TOD ANZ essay.

Thanks for this David. A neat summary of what we're likely to face. I think that the real issue is raising awareness amongst the mainstream population and government and corporate decision makers because we coasting along in a cash-fuelled daydream at present, despite indicators of substantial impending problems (as you've noted), little is being done to fire-proof our economy and society from the coming oil shocks. What to do?

I look forward to parts 2 & 3.

Thanks, everyone, for the nice comments.

I'm also asking myself the "What to do?" questions. The way I see it we have 2 types of tasks:

1. Social obligations. Things such as raising awareness and not contributing to the problem more than we have to. I work with CEOs fairly regularly, and politicians occassionally. They seem to be sleepwalking, they just can't see the problem. I want to write a bit about why raising awareness in the halls of power is so hard, and what we need to do about it. I should have something to you some time in the next few weeks.

2. Personal tasks - the selfish stuff for you and your family. Again, I want to write about this, but from an Australian perspective.

I'm certainly not deluded enough to think I have all the answers, so I'm not presenting these articles as definitive. I really just want to spark thinking about our "To Do List" here in Australia.

We truly are "the lucky country". Last to be invaded by Europeans & thus it's only been around 220+ yrs since people who did not follow sustainable living practices have raped the continent. The soil quality is not good & salinity has already arisen as a problem, but if we work hard starting NOW we can establish ourselves and survive. Water is starting to become a serious issue.

Imagine if EVERY home around Australia had water tanks?? What would be our draw-down from the reserviors then??

What if every 2nd home had some level of solar energy capacity (even if it didn't produce 100% of that home's electricity requirements?)

What reduction in consumption from coal fired power would that have? Pretty significant I would assume.

We really have an opportunity to prosper & possibly even obtain a higher standard of living (I'm not going to explain it, -think it through for yourselves...)

We need to educate the masses. We have had no leadership from our Government and in actual fact we have been kept in the dark by our leaders so that the economy continues on a "business as usual" path. This change that Mother Nature will impose upon us is revolutionary. Peak Oil & the subsequent terminal decline in production only happens once in the history of Mankind. This will not occur ever again.

"It's the most disturbing thing that's ever happened to the human species... it's responsible for our technological society... and in terms of Human history it is a very brief epoch." -M. King Hubbert

I don't think many people truly appreciate the fact that oil is a fossil fuel that took millions of years to come into existence... and we have consumed half of it in less than 200 years. We live in a physical reality where for every action there is an opposite & equal reaction. Thus oil & the volume of fossil fuels we have mined & utilised since the industrial revolution is the reason why we have been able to achieve the most sophisticated society in the history of the world. Regardless of the tertiary industries (finance, retail etc.) which contribute to our Gross Domestic Product, these tertiary industries would not function without a base of abundant fossil fuels & primary industries. As the world's oil supply (in aggregate) goes into terminal decline, we will not be able to sustain the level of economic growth we have achieved most recently. It simply isn't possible.

Self sufficient independence will be the new paradigm. We must take more responsibility for ourselves & each other than we already do. As I said, -it may even be a better way (no doubt a very different way) but certainly we will come to the realisation that money has no value (you can't eat it) and that the purpose of our existence is much deeper than to be slaves to the dollar.

Get out of debt. Plan for the changes that are coming. Educate yourself. Embrace change & try to inspire others to do the same.

"Ignorance is bliss... -but you will not make progress until you acknowledge The Truth." Me

Good points, David.

Up here on the far north tropical coast of Queensland, we are not experiencing the big dry. If anything, we are seeing a longer wet season. Food production will have to move to where the water is, and efficient transport will be essential to move the produce to southern markets.

IMHO, we need to stop building infrastructure for cars and trucks and, instead, pour funds into an efficient, national freight rail network to do the heavy lifting. The happy motoring paradigm is fatally flawed and cannot last much longer.

At the local level, I am trying to get the local sugar industry to address our fossil diesel dependency. We use up to five litres of diesel to grow, harvest and deliver every tonne of sugar cane to the mill for processing. The recent, rapid charge towards $100 oil is getting peoples' attention, at last.

Fertiliser will be a harder problem to solve.

Looking forward to part 2.

You guys USED to have steam railways which burnt bagasse (left-over-sugar-cane-after-refining) to solve the "diesel" problem. There's some good research being done in South America to let you return to using left-over-sugar-cane to fuel your trains again.

BTW: can you get the b####dy halfwits to STOP closing the sugar mills down, PLEASE? We really do need them. Honest.

Hi sugarmiller...tried to send you an email, but got the following message:

This is an automatically generated Delivery Status Notification

Delivery to the following recipient failed permanently:

sugarmiller at yahoo dot com

Technical details of permanent failure:
PERM_FAILURE: SMTP Error (state 16): 554 delivery error: dd This user doesn't have a account ( [-5] -


What gives?

UCM, sorry about the email. Don't know why they deleted my account. Maybe I didn't use it enough? When I get a moment I'll setup a new mail account and change my profile.

Sugar is a highly corrupt market. US & EU protect their producers with huge wads of taxpayer funds. Aussie sugar mills live and die on scale. Our costs continue to rise but the price of sugar in rapidly appreciating AUD doesn't keep up. The squeeze is relentless and the cane tonnage necessary to break even is a moving target. It is inevitable that the smaller mills will go broke.

We burn all of our bagasse to make electricity and export the substantial surplus to the grid. Steam could work for the cane railway but the tractors and harvesting equipment will still require liquid fuel for some years to come.

We are looking at oil crops in rotation with the sugar cane as a way to provide some of our fuel. Some dedicated coconut plantations on degraded, marginal cane land may be viable too.

fertilizer is easy...

Fish or Urine chose your fertilizer. Even Night Soil will work. Think outside the box :)

Like I have posted before read up on Aquaponics :) nothing else you can composte the effluent. That is if you do not wish to go hydro style

LOL, at first glance I read, if nothing else you can compost the affluent, heh,heh.

That was funny. Funny enough to tell my wife, which meant admitting that I'm reading the Oil Drum during work hours..

Thanks for a great article. The water problem is definitely the one that concerns me most in the short to medium term, because it may have been worsened by our activities. Climate change and deforestation come to mind.

I agree that conservation is going to be critical and that we must adjust the way we travel. Indeed, the major cities are already seeing a large increase in the amount of people using public transport. The varying state governments do not appear to be aware of the exponential function and do not realise that they will need to make massive increases in our public transport capacity.

You have another big risk that you passed by.

You are a resource rich country with a small population and a set of neighbours to the north who are resource poor and population rich.

Do I need to draw a picture of what happens when conflict is in the offing? You could be invaded and not realise for a week.

Plus, of course, you hydrocarbon resource allocation is pretty low in global terms - and that's number 1 on the list of resources that are needed. Things could easily grind to a halt and then how do you mine that ore?

You have another big risk that you passed by. You are a resource rich country with a small population and a set of neighbours to the north who are resource poor and population rich.

Somewhat the same could be said for the US. Draw a north-south line at about 97° W longitude -- the vast majority of total renewable energy resources in the form of wind, solar, hydro, and geothermal are west of that line, while a large majority of the population lies to the east. Much of the population is well to the east -- 25% of US population lives in the strip from north of Boston to south of Washington DC within 100 miles of the Atlantic.

Many people anticipate resource wars between countries in the future; I suspect that there will be corresponding struggles over energy resources within countries as well.

Your article is a recapitulation of what I have been telling my wife for the past 8 years.

I only once visited Australia, in 1978, as a spoiled guest of Quantas. I was really impressed. Sydney is probably not as pleasant now as it was then. However, I am sure it has not gone downhill as much as London.

I think in the next 12 months, we shall be visiting and then applying for immigrant visas. TOD has certainly helped me make up my mind.

Obviously, Australia is no nirvana. However, it does have possibilities that do not exist in the UK. I mean, you can live in most of the continent without heating in the winter. Try doing that in Northern Europe!

IMHO the most livable places of the planet lie between 25-35 degrees from the equator and are near the coasts. Europe is a an exception because of the Gulf Stream. However, in the winter there is little sunshine.

How do I immigrate my entire family from Canada???? Always wanted to see Australia. Darwin/Kimberley districts would be my choice. No winters.

Richard Wakefield
London, Ont.

No one is ahead of their time, just the rest of humanity is slow to catch on.

Careful about talking up Austraila as "The Place to Be". We've done that all my life in the States and look where it got us, over run with illegal aliens.And it's gonna get worse when TSHTF.

China has to be looking voraciously both North and South for Lebensraum and Resources. How many miles of coastline do you folks have to keep track of?

'If you have to live through a time of resource-depletion, this is the continent you want to be in.'

As the Chinese will certainly be noting.

That's insane.

If China invades Australia, expect China to be nuked by US. US has a vested interest in keeping it's resource rich ally, well... alive. Actually I would expect US donating some of its nuclear arsenal to Australia rather than letting this happen.

And what exactly is China going to take from Australia? It's coal? They have plenty themselves. Farmland? Australia does not have that much extra farmland, not nearly anything that would help 1.3bln. hungry Chineese. What China, or anyone else is interested is keeping the status quo in which Aus trades its excess natural resources for the Chinese excess labor resources (materialized in what we see in Wal-Mart and the likes).

1)If you think the US is going to donate part of its nuclear arsenal for the defense of Austraila you're delusional

2)China could take lotsa coal for example but it's really a matter of what they could do with Austraila. Since they're already drowning in their own effulent why not ship it to the middle of Austraila and create another first ie the largest toxic waste dump in the World. Yeah, I know that's heresy but what's a superpower supposed to do...

Run for your lives! The Yellow Horde is coming! The devil worshipping commies are coming! Maybe once BushCo gets kicked out they could run Australia for you.

Yeah it's nuts... I imagine we could develop a complete paranoia if we start imagining who would like to take over who.

And it contradicts the observable reality - so far the only country in the world that seems determined to take over other countries for their resources looks to be US of A. Considering our track record it becomes obvious how awfully dangerous and stupid idea this is.

Indeed, we have a fine line to walk between two superpowers, both of which will be taking a keen interest in our abundant resources.

That's the same kind of thinking that predicated the Iraq war. If you think it is that simple just to invade a country and take over its resources I'm not sure which century you live in.

Yes, US probably will not donate nukes, but this does not change that China invading Australia will almost certainly result in WWIII. Hell even Taiwan could be enough of a reason for that. I don't imagine the Chinese becoming that disparate to do it. Another question is why exactly Australia? Mongolia on the North has huge sparsely populated "living space", Taiwan is already viewed as part of China, there are huge, much weaker and resource rich countries in Middle Asia on the West - Kazakhstan, Tajikistan, Uzbekistan... Australia is not even on the radar screen IMO.

Thanks, LevinK. A bit of sense and reason. Many of you who are not Australians may not realize it, but all this paranoia about Asia and China in particular is simply a re-run of the old 'Yellow Peril' thing (and its corollary, the White Australia policy, which dominated Australian politics up unitl the early 1970s). Yes, Australia was not always the fab and sophisticated place it now sports itself as being in tourist adverts, a nation of celebrity chefs and boutique vitners, and a horn of plenty for Asian tourists and students. It was only a generation ago that Asians were almost impossible to find in Oz, and certainly weren't at all welcome. And that had nothing to do with any military threat from China. It was simple stupidity and hate. Which we see cropping up again right here at TOD.

Consider Imperial Japan, which had no interest at all in Australia and only half-heartedly bombed it because Oz signed up to die for the British Empire. Even the genuinely expansionist Japanese didn't want to invade Australia. And China has shown NO expansionist tendencies except in regards to Taiwan and Tibet ... it's just a joke to hear stuff like this. It's disgusting - like being told someone's S&M fantasies or something. 'Hey, I'm really, really scared of Chinese people!' Well, people of such opinions should keep their sick BS to themselves. They should criticize China for what it has done or might do, not for whatever role it plays in their own weird fantasies.

No one in Asia is the slightest bit interested in invading a place like Australia. All this 'The Chinese are coming!' is just projection. After all, the only people to successfully invade Australia were the British.

Remember that scene in Gallipoli where the recruits are hiking across some Australian scrub.. (I think 'scrub' might even be too abundant a description) and they're discussing whether they're fighting so the Germans don't invade Oz, and one soldier looks across the range and says 'This? If Germany wants it, let them have it!'

It's not racist to expose what could happen. I saw the Chinese ambassador to Canada being interviewed the other day. And he admitted than within 10 years, China will have 150 million environmental refugees. They have so over polluted their country that one tenth of their population will have to be relocated. How many of that 150 million will be relocatable within in their own country?

If the US is in the grips of oil depletion and the economic consequences of that, there is a very good chance that the US will not be able to react well to China, or India for that matter, throwing its weight around.

You are viewing the world as it is now. Relative peace. But there is no fundamental reason why it should remain that way. If anything oil depletion will push peace aside.

It’s not fear mongering, it’s looking at the possibilities rationally. If anything those who don’t think it can happen will be the ones most surprised when it does happen.

Remember, we are about to enter a whole new era for humanity. Old assumptions don't apply.

Richard Wakefield
London, Ont.

No one is ahead of their time, just the rest of humanity is slow to catch on.

You mention Diamond's "Collapse" but you don't mention what he has to say about Australia. Bit of an over site?

Other wise a good article.

I've been spending some time, the last couple of weeks, trying to put together some advice for non-peak aware friends and family.

Your statement: "I grew up at a time of unbridled optimism. I have never missed a meal...." pretty much sums up their world view.

How do you tell people, who have never know hunger, that they may go hungry? The just will not believe you!

It is very frustrating. There are some things they could do to prepare (gardening supplies and ELP), but nothing will make it past their armor of optimism.

I'm almost at the point of buying extra gardening tools an seeds for all of them.

I don't specifically talk about Jared Diamond's comments on Oz, but I do talk a bit about water. I'm certainly conscious of his comments.... but I am trying to keep my articles below 3,000 words, so I try not to write everything that I think - I'm trying to stick to a few key points. Dismally failing so far :-(

You forgot another good aspect.
The point system used for immigration which makes it very unlikely for deadbeats to enter the country, and the location which makes it easy to enforce.

This article on an Australian point of view was excellent and I too look forward to more on the subject. I live in sunny Arizona and hope you will be injecting your viewpoint on the solar projects in your country. Solar technology is improving and it seems to be the best bet for my part of the world.

You forgot another good aspect.
The point system used for immigration which makes it very unlikely for deadbeats to enter the country, and the location which makes it easy to enforce.

Rather a drag for us deadbeats, though.

Yup, I'm too old and too poor to qualify.

Yeah, unless of course the 'deadbeats' are from the Anglo-Saxon world, in which case there generally isn't a problem getting into Oz.

We all know the code you speak here, Musashi. Ironic, given your choice of moniker, isn't it?

You think you know.

There was a story in the news recently about someone in Perth I believe who had a way of directly using wave energy to desalinate seawater:

Doesn't use electricity - just uses the wave power to pressurize seawater and then force the seawater through a reverse osmosis membrane to make the fresh water...

Why a whole of 20 years for building NG powered vehicles infrastructure?

In relatively poor Bulgaria (figure 1/5th of GDP per capita) methane stations are increasing at exponential speed. Retrofitting an existing vehicle to using methane is an easy and relatively inexpensive operation (some 1000 euro IIRC). For new vehicles it should be even easier. And we don't even have oil-based fuel shortages yet, the conversion is entirely price-driven.

In resource rich Australia, under crisis circumstances I could see wide-spread NG usage after just 5 years or so. The good news for you is that even when NG eventually also depletes, you would be able to still use the infrastructure - by gasifying some of your vast coal reserves. If coal starts depleting too (by 2100?) you could build nuclear and start displacing it from power generation.

Frankly I don't see any significant energy problems for Australia in the medium or long term. PO may well be felt just like a minor inconvenience. I would rather worry food security.

I disagree that the hardest hit will be the usual suspects. My guess is the usual suspects will be the first hit, but the most highly developed economies will be the worse hit.

I became aware of this when someone asked me, of the 10 worst famines of the 20th Century, how many happened in Africa. My guess was 8. The correct answer is zero. There can be dramatic hardships in Africa, but to have a truly spectacular famine requires a more complex interdependent economy, government policy and sometimes natural events. Source, Reuters

It seems to me the economy is a confederation of individual efforts to profit, add more value than resources consumed. At each base are natural resources and value resources consumed, our outstretched arms are the value we add. Others in turn consume that value, to add theirs, and so forth.

Self-interest to profit drives the system. Self-interest, demands collaboration, specialization to profit most by concentrating on greatest talents and trading with others for goods and services of their primary talents.

The structure is knit together by the abilities to trust, transact and transport.

It seems to me, highly leveraged economies are at greatest risk of massive die-off. It does not matter how much corn is in Iowa, if there is a collapse in the ability to transport it 200 miles to Chicago.

To counter the risks it seems vital to me that we strength the durability of each little pyramid. Like your grandmother, it may require time and effort but we each need to become more self-reliant. Policies that help self-reliance:

  • Victory gardens, everyone should plant one immediately. It takes time to build gardening skills. Try to grow 1/3rd of your own food.
  • Canning. Learn to can and preserve some foods.
  • "Lifeboat Solar Policy" mimic the German Tariff buy back policies where anyone can sell power to the grid at 20% over cost to buy from the grid. This creates a distributed collaborative network, lifeboats. Remember to the people in lifeboats, the Titanic was just a horrifying inconvience.
  • Ark-up. Pull in key aspects of your supply chains
  • Universal military service. Learn to team with your neighbors to provide your own security. Strengthen the social fabric and discourage warlords. Example, quote from Machiavelli(1500's) "The Swiss are heavily armed and completely free"
  • Get copies and study the Constitution, Thomas Paynes and Ben Franklin's and other writings
  • Adopt the practice of storing 2 years of food in your domain.
  • Implement solar powered mobility networks
  • Expand the list of self-reliance items.

Essay on converting the lifeblood of our economy from oil to ingenuity.

Yes, my Engineering friends have pointed out to me several times in the last few years that my "Usual Suspects" argument fails to mention this key point - the "Usual Suspects" may go down first, but they don't have the interdependencies that we have, so they cope better. When/if we go down, we better hope that it is gradual, and we better hope that we don't slide too far. We are not equipped for it.

Thanks for reminding me of this argument. I think that (with your permission) I should make this point part of my argument in future :-)

Do you have any idea of the dates on which parts two and three of your essay will be posted?

Part 2 within 48 hours (it is finished, but I want a few people to do "sanity checks"). Part 3 within 7 days (it is 50% finished.

Many thanks. I am looking forward to the next installments.

My mistake. After talking to Big Gav, the next part will be published on Friday, PM. Part 3 will probably be a week after that.

RE various collapses of recent times such as Russia and Argentina.

Naomi Klein's book 'Shock Doctrine' paints a different picture of the reasons behind these and other collapses. She makes a convincing case that the neoliberal process of globalization, driven by corporatocracy is a major factor in destroying what were otherwise more viable economies (Chile, Bolivia, Poland, the list goes on, thanks in part to IMF/World bank economic agendas).

Of the examples, Argentina and Russia are probably two of the most resource-rich countries on the planet and therefore provide a counter to any arguments that ecological problems were the sources of their collapses.

Argentina and Russia were not "collapses", they were little bumps in the road. The Japanese banking crisis was even less of a collapse.

Most fail to see the relative seriousness of problems that superficially appear similar. Beach Boy posted this very easy to understand essay explaining why the US will be hit much sooner and harder then anyone else, to a large degree because we fail to take the required medicine.

I agree peak oil is almost purely a socioeconomic problem not a resource problem. Let assume we lived in a enlightened society that was also somewhat pragmatic and did make use of oil/coal and nuclear power. Obviously at some point this enlightened society would eventually deplete its reserves of non-renewable resources or more likely abandon them in favor of alternatives as they became difficult to extract.

Thus even a pragmatic enlightened society would transition over time. We can even consider that this society would also have problems with population and renewable resources even if it chose not to exploit non-renewable resources. So no matter what it makes sense to consider that all societies no matter how advanced and rational will have to deal with changing resource constraints and adapt.

The problem is how the society is structured and how it uses resources. What we see in our current societies is that they follow a boom bust cycle with a number of factors playing into the cycle. But what stands out is that almost invariably we see a concentration of wealth into the hands of a few followed by collapse. Like clockwork when 1% of the people control 95% of the wealth societies collapse.
The cause can be a number of reasons with resource depletion playing a role. Generally the role of resource depletion is different from what most people think in that its main effect is actually that it accelerates the concentration of wealth.

For example in Australia today the exploitation of its natural resources is resulting in most of the money going to the wealthy class with very little trickling down into the average Australians hands. So I think resource depletion does play a large role in the collapse of economies if its occuring but mainly by acceleration of the concentration of wealth and subsequent collapse.

“Argentina and Russia are probably two of the most resource-rich countries on the planet and therefore provide a counter to any arguments that ecological problems were the sources of their collapses. “

That was never stated in the original article. You might want to rework your statement.

PS: I actually agree, that globalization destroys otherwise viable economies.

I stand corrected as far as what I said implied. The point then has been made many times, as in Memmel's previous post, that says "peak oil is almost purely a socioeconomic problem not a resource problem."

This gets down to the nub of many debates on TOD. That is the debate over whether actual resource shortages will cause our greatest problems, or socioeconomic problems induced by humans' inept way of running societies.

Of the examples, Argentina and Russia are probably two of the most resource-rich countries on the planet and therefore provide a counter to any arguments that ecological problems were the sources of their collapses.

Your statement makes little sense to me and the data that I have observed. Ecological damage in the 19th, 20th, and 21st centuries so far appears to be most strongly associated with strong resource bases, not poor ones. The strong resource base drives growth based economies which tend to ravage the surrounding environment. Those countries that have had strong resource bases have developed strongly (at least in certain areas) and the damage comes from that development. 

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett

Into the Grey Zone

To me this is just another side effect of the core economic model we follow which is concentration of wealth and power.
Exploitation of resources is simply one of the means used to both create wealth and concentrate it. In most cases conversion of natural resources to wealth requires a fairly large outlay of investment capitol and thus its only open to the rich and powerful. Of course the cost of exploitation which is environmental damage and extraction of the resource is not born by the wealthy instead the long term costs are levied on the population.

I think that Australia is one of those places that could fare well eventually but with a much lower population if it reverts to a renewable style.

I think a good thing to consider for the future is what the population was in the past before industrialization. This indicates that at least for Australia is sustainable capacity may be far less than the current population.

This means that Australia even though it has a fairly low numerical population may actually be well above its intrinsic carrying capacity. And the current population distribution is probably far from the optimum.

In my opinion the demographics/climate/resource base of Australia seem to be similar to the American Southwest/Mountain region most people don't think this region will do well post peak with its current population.

I don't know about New Zealand.

Congratulations on setting up your site! Both climate change and peak energy use are going to require the whole world to work together to solve our common problems. Recognising this and taking action is very significant, Thanks!Bob Ebersole

Some random thoughts;
late peaking in coal, gas and uranium
Whoever still has reserves will be under enormous pressure to 'help out' the rest of the world. I think we'll sell it off so fast we'll end up as resource deficient as everyone else.
the China factor
I'd argue that sales of iron ore, nickel concentrate and so forth are essentially driven by coal. When China runs short of coal we will send them more. Like a drug dealer we'll say it's their problem not ours.
wet and dry areas
A population shift to the Kimberley coast or SW Tasmania may seem logical but few takers. Even the dinosaurs got up and moved but Middle Australia isn't budging. Trapped by their own optimism, they are condemned to drink a blend of desalinated seawater and recycled pee.

Nice post!

The kicker for me is to look back on the 1930's. This was the up-slope of energy consumption, yet we still suffered the great depression and then WWII. Note that Japan was pushed to war by lack of access to energy. The impacts were determined largely by overseas events. For an Aussie perspective on the depression, try to get a copy of "Weevils in the Flour".

Now we're on the energy downslope (or about to be). Our population is much bigger, and much less self-reliant. And our economy is much more dependent on international trade and finance.

So count me as a bit of a doomer. Sure it is technically possible to make a reasonable transition to permaculture, public transport, solar, cycling, natural gas, nuclear etc. But I don't think it will work out that way, due to human nature and politics.

I strongly recommend that those of you in Australia research the paleo-climate of that continent over the last few million years. Then consider what climate change is doing and make your assessment in the light of what Australia's climate will probably become, not what it has been.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

Hi David,

I also own an IT startup but haven't sold it. I also have young kids (2 and 5). I also consider myself extraordinarily fortunate. However, our paths seem have gone in different directions.

While you are still enjoying the pampered life in one of the Big 4 Accounting firms (as Gav puts it) I've opted-out to Byron Shire on the north coast of NSW. There are a number of reasons for my move:

- I wanted to live somewhere where the majority of the community was aware and concerned about the of issues climate change, environmental degradation and resource depletion, and less concerned about which private school their kids were going to.
- I wanted to live somewhere where the soils were good, the rainfall reliable, the population density low and locally grown food was pelntiful.
- I wanted to live somewhere where I could do 90% of my commuting by bike and walking.
- I wanted to live somewhere where a substantial block of land was within my means, so I could learn about permaculture, bush-regeneration and looking after the land.

Generally I agree with you that Australia will be better place to live in the coming decades because of our wealth of resources, but I think you underestimate the seriousness of the water issue. I'm not talking so much about the cities running dry (which increasingly looks like being 'solved' with desal) but the dramatic drying out of the Australia's food basket, the Murray-Darling basin. We may be a net food exporter now, but when you see thousands of fruit trees being bulldozed into the ground (because there is simply no water available) I wonder how long we will be a net food exporter.

Another issue, slightly off topic, is the strength of the Australian dollar. The resources boom and high interest rates will continue to drive the AUD higher for the forseeable future. This is wreaking havoc in all the export sectors of the economy (manufacturing, tourism, agriculture...) except mining, where prices are rising faster than the dollar. I fear that as resources are depleted worldwide, and resources become ever more expensive, Australia will become a single sector economy -- a quarry. It will simply be impossible to survive in any other export business as the strong dollar destroys our competitiveness.

When I started my business in 2000 I earned two Australian dollars for every U.S. dollar. Today I earn one Australian dollar for every U.S. dollar. 50% of my income and 80% of my profit margin vanished through no fault of my own.

I'm certain my story is being repeated thousands of times throughout the Australian economy. In coming years thousands of Australian exporters will go to the wall, and the skills and technologies embodied in those businesses will be lost to Australia forever.

In the end, we may not be able to make anything, fix anything or grow anything in this country. We will become a country of miners.

*SIGH* Byron. I dream of living there. I used to go there often. I spoke to my wife about this some years ago, but she was nwilling to leave parents and friends to start a new life, no matter how idyllic the surrounds are.

So we found an alternative. Frankly, I think your solution is better in the long run, but mine keeps friends and family near, keeps my wife happy, and at least might be viable.

Its amazing how quickly you make new friends, and we get down to Sydney to see family most school holidays. Of course, that might not be possible in a carbon constrained and oil depleted world, but who knows, the NSW government might actually fix the north coast railway if things get really bad.

Its not perfect up here but its better, and Thursday mornings at the Byron farmers market is enough to put a smile on any peak-oiler's face.

Hmmm, Australia to my historical understanding is not a relatively easy place to survive in without plenty of energy. The early settlers did it pretty tough here. Big distances, poor soils, intermittent water and bushfires (even the natural ones), difficult terrain make this a tough country to live in on a low energy diet.

As for invasion, I can't see hungry energy depleted armies coming across the northern straits to deal with crocs and few thousand k's of desert!

Two things,

1. We DO NOT HAVE A LOT OF GAS - AND we are flogging it off so fast it will not be there in 40 years!! Flogging the farm is what is called good financial management here in Oz...
Latest CIA Factsbook has us at 821.2 billion Cubic Metres and the world at 172,800 billion Cubic Metres - We have less than Half of 1% of world gas!!!!

2. The market economy is inherently unstable and the only reason it works is through growth. Following the laws of thermodynamics - less fuel (oil) = less work = lower economic activity = recession. The world economy was staggered by the light blow of the US mortgage crisis. It must be understood that the houses under question in the US are still there, in good shape, and someone will buy the paper cheap and ultimately sell the houses and make lots of money.

We know what happened and continues to happen with regard to the mortgage crisis, what will the realisation do when market understands that most of the market is made up of unsustainable companies - the market will fall to pieces, and very quickly once it begins.

Sharing the road back to Olduvai

Here in Australia we hit the jackpot. We have high resources, low population, good wealth, fair carrying capacity (when compared to population), and good political stability. Countries without those attributes are obviously more vulnerable when something goes wrong.

I'm sorry, but this is both cornucopian, and very misleading. Non-Australians (including North Americans) often have a very exaggerated, optimistic, positive view of Australia as it is, and you may well be feeding these misconceptions here.

Your comments above remind me of an annual quality newspaper supplement from the 60s called Australia Unlimited - it used to have 20 or 30 pages of the same feel-good wildly optimistic forecasts of Australia's glorious future, in every field of endeavour. It isn't produced any more.

I suggest you read (or re-read) the Australian parts in The Future Eaters (Tim Flannery) or Collapse (Jared Diamond), as noted above. In my 55 years I have watched with despair in many cases the destruction of our natural environment, and the impoverishment of our political and economic systems. And we are hugely dependent on energy for the production of just about everything - from superphosphate fertilisers through large highway networks and water cycling systems. Australia is a HARD place to make a living.

On just about every important measure, Australia is in trouble, or faces trouble soon. Our cities are critically short of water, yet they continue to grow and further concentrate the population in what is already the most urbanised large country. Drought and climate change are serious, real issues. There are viable pockets - but not everyone can live in Byron Shire (and the land costs per hectare there are enormous in any case).

Relative to the rest of the world, Australians seem to be doing well, but it is a chimera, and our political leadership, major institutions, and the corporate sector are not addressing the real issues - either because they wish to win re-election, or because they are protecting their privilege, wealth and vested interests.

Australia is incredibly fragile, in just about every way imaginable. It has wonderful people, and is making a pretty good fist of multiculturalism and social equity, but peak oil, peak water, peak grain, global warming, and a thousand other challenges, do not make it "the place to be" in my view. It has been called "The Lucky Country", but that book title was deeply ironic - a point that has been lost in our rush to feel-good television, SUVs in every garage, and all the other trappings of urban high-wealth, high-energy life, while our rural economies wither and die.

We are a beach and a quarry for sure, and less and less a food-basket. I am not an optimist - there is too much reality around.

In looking at the annual BP energy data compilations, checking the Australia figures for oil, coal, and nat gas, I can't see why Australia will have to worry today (about energy), if all Australians cared about was consuming their own resources and were willing to burn their own coal for electricity.

However, today's world is based on world-wide trade. In the big scheme of things Australia's supply of nat gas and oil is not so impressive, and while coal resources are large for internal consumption use I wonder how export of coal will proceed.

As an American, Australia has always (my entire life) been sold to me as a place of great mineral wealth just waiting for the right people to show up and make use of it. It is supposed to be a land of great opportunity. Is that true, or have I been sold a pack of marketing?

No doubt the Asian countries (esp China, Japan, Korea) see Australia as a strategic source of uranium and possibly LNG (though that would be a short lived affair, no?) Will coal liquefaction become a profitable export business?

Seems to me there are a lot of unanswered questions, the details need to be filled in. Namely:
- the future of trade
- the future of energy trade (especially with Asia)
- the willingness to expand nuclear energy use
- prospects for desalinization
- prospects for electrification of Australian transport

So, sell me on Australia! Perhaps I should move there?

The irony in Australia is, as its citizens become "wealthier", the greater threat there is to the fragile environment. The current economic boom is based on the export of iron ore, coal, and a range of other minerals, plus tourism and agriculture (food and fibre). Population continues to increase, and more and more agricultural land is lost to urban and regional development - houses, highways and shopping malls.

The coastline is beautiful, and subject to rampant housing development just about everywhere that's even half-way accessible. Our fisheries (that were always pretty meagre) have crashed in virtually every region.

But overall, it is a political and economic issue. The country has the physical capacity to build solar, wind, wave, tidal, and geothermal energy systems, and to continue to be an energy exporter. And nuclear if it were a rational and energy-effective thing to do. Hydroelectric power expansion is not possible - snowfall and other high-altitude precipitation is simply not reliable. Existing hydro stations run at 5% capacity as it is, for the want to available water. Clean coal is promoted (it serves the powerful) but is also a total myth. We don't sign Kyoto.

By all means come to Australia and try your hand, if you can get in - Herbert Hoover did so in the 1920s and helped found Western Australia's mining precinct - still extremely valuable.

To understand Australia, you don't need a "sell" - just a sober and realistic understanding of its hard resource limits and very low carrying capacity. And because it is ancient, marginal country, it has been very badly affected by European settlement for 219 years. There is a huge amount of un-doing to be done, before it can ever be seriously considered a long-term lifeboat.

I really believe that what is required is beyond the political and psychological capacity of its people. There is an national sense of "she'll be right" that is very hard to get over. But get over it we must - we have fouled our own nest long enough.

The current economic boom is based on the export of iron ore, coal, and a range of other minerals, plus tourism and agriculture (food and fibre).

Mining for sure but I think you'll find the tourism industry is in the dodrums thanks to the strength of the Aussie dollar. Australians aren't holidaying in Australia because its so much cheaper to go overseas (e.g. SE Asia) and international tourists are shunning Australia because its become so expensive.

Agriculture is suffering from the drought but its also being hurt by the strong Aussie dollar. Prices for many agricultural commodities are up but the rise in the AUD has absorbed most of that.

If you want to make money in modern Australia, either start digging, or import some cheap Chinese junk and mark it up 100%.

This seems to be a very optomitsic article. Australia will not have it easy by any means. People tend to forget that the whole world will be effected by peak oil. Life will in no way will continue as normal.

The trade system. What about all the plastics, electronics, machinary, medicines, goods, etc... that is imported from abroad? Without globalization there will not be any growth for international companies and corporations and stock markets will crash. Holiday and tourism destinations will not be able to continue as air travel dies. Cities will become huge, empty, concrete jungles as businesses shut down and unemployment rates skyrocket.

Much of Australia is desert, and there are many areas compeltely drying up with 1 in 200year droughts. To continue burning gas, and then coal will cause further problems.

It seems to me that you are hoping its gonna be alright and that you can continue living in your bubble without too much of a problem. But, even if you have iron in your back garden, gas all around, and mountains of coal and uranium, there won't be a stable economy to support, invest, or use it. There won't be a buzzing city of wealth to build and maintain the desalination plants and nuclear power stations. Not unless you had started preparing 20 years ago. The dream of continuing business as usual is not possible. At BEST there will have to be a population reduction and a big reduction in living standards and wealth.

The best place to live is somewhere you can grow food and get access to water. Afterall those are the two most important resources for which you could not survive without.

A lot of you are also very dismissive of war/invasion in Australia. Remember you are one of the USA's closest allies. In the likely event of WW3 you can be certain you'll be asked to fight, and there will be a lot of countries that don't like you. Even if no-one can invade Australia, war will put you under great pressure.

Say, a good read. Best of luck down there! And it'll be interesting seeing how you deal with it all.

No worries!

Do you have chooks? If you let them into your veggie patch they will destroy your garden and you won't be eating many veggies that season. A 7 foot fence finally kept ours OUT of our veggie patch.

:-) Thanks. I'm dealing with memories that are 40+ years old. I seem to remember that my Grandma let the chooks into the veggie garden at certain times and for certain reasons.... but I don't know when or why. I might have to learn.

I'd be interested to know how many people this country could support without fossil fuels and mining.

I've been reading with great interest the posts here & only just having joined wished to add a few words. I live in the far southern suburbs of Sydney. I live fairly simple. I work full time, 10 hours a day, a 10 minute train trip & then a 25 minute walk to work. I don't have a car, microwave, air conditioner, heater, washing machine nor a refrigerator. I can easily afford these things however choose not to. I have a vegie garden & have the Royal National Park on one side of me & Heathcote National Park on the other.
Yet I'm surrounded by zombies who think an SUV, widescreen plasma TV & an ipod are essential to happiness.
We are NO different at all to any other industrialised country. How all this plays out means so little in the big scheme of things.
This country, whilst rich in human revered resources, is apparently unconcerned about species extinction which is one of the highest in the world. I have folk that live over in New Zealand (where I was born & raised). My sister had a great avocado pick this season but this is the first in a while & I do wonder if it'll be the last.
I am lucky enough to live in a country to be able to buy and drive a big V8 sedan or buy the latest in consumer technology yet I will not do so as I know this kind of psychology is why we are where we are. Instead of trying to reduce our consumption, we here, in Australia consume ever more.
Having said all that Ausralia is an amazing place. The wildlife is wonderful.
I've been learning about bush tucker (ironically by an American)
Anyway, thanks for your time.

I've been reading with great interest the posts here & only just having joined wished to add a few words. I live in the far southern suburbs of Sydney. I live fairly simple. I work full time, 10 hours a day, a 10 minute train trip & then a 25 minute walk to work. I don't have a car, microwave, air conditioner, heater, washing machine nor a refrigerator. I can easily afford these things however choose not to. I have a vegie garden & have the Royal National Park on one side of me & Heathcote National Park on the other.
Yet I'm surrounded by zombies who think an SUV, widescreen plasma TV & an ipod are essential to happiness.
We are NO different at all to any other industrialised country. How all this plays out means so little in the big scheme of things.
This country, whilst rich in human revered resources, is apparently unconcerned about species extinction which is one of the highest in the world. I have folk that live over in New Zealand (where I was born & raised). My sister had a great avocado pick this season but this is the first in a while & I do wonder if it'll be the last.
I am lucky enough to live in a country to be able to buy and drive a big V8 sedan or buy the latest in consumer technology yet I will not do so as I know this kind of psychology is why we are where we are. Instead of trying to reduce our consumption, we here, in Australia consume ever more.
Having said all that Ausralia is an amazing place. The wildlife is wonderful.
I've been learning about bush tucker (ironically by an American)
Anyway, thanks for your time.

Since no-one has mentioned them, Australia has a notable human resource in the permaculture movement and people like Tim Flannery and Helen Caldicott. Oz is the home of permaculture, and a lot of the material is drawn to its dry climate, moreso than temperate regions perhaps.

No offence intended, but statements like "Australia has a LOT of gas" are not really going to wash on The Oil Drum. Can't you be more specific regarding reserves, current consumption, and projected future consumption, including the case where its powering everyone's Ute? Won't the people who own such nat gas happily sell it to Japan anyway? There may be obstacles to the USA turning heavily to LPG, but Japan is already there.

You folks down there probably get tired of comparisons with NZ, but wouldn't that be a better place to be post-peak oil viz-a-viz general fertility and population density? NZ certainly gets a lot of mentions from "doomers".

I'd like to do a gas depletion model for Australia as part of a future post here - if anyone is interested in contributing, please get in touch.

At a very high level, onshore and Bass Strait gas reserves that are consumed locally should last around another 30-40 years by my rough reckoning (assuming the likes of Santos aren't allowed to build any coal seam methane to LNG plants).

Most of the offshore stuff is destined for export, and we are only just getting started with commercialising some of the reserves off Northern and Westeran Australia.

The proposed projects there are big - the aim of the government is to become the world's largest LNG exporter after Qatar.

I'd imagine the lifetime of projects like Gorgon, Pluto and Browse to be in the 30 year timeframe. Just how many more of these types of projects are developed remains to be seen - but it is worth noting that the obstacle to developing these (which also applies to PNG gas fields) has been a lack of customers, not a shortage of gas.

The Good News
Australia is a continent of coal

That is NOT good news. Because the CO2 absorption capacity of the atmosphere is simply not there. And those thinking we'll have clean coal should make some basic calculations. Every 1,000 MW coal fired power plant requires the geo-sequestration of 150 kb/d of liquid CO2 into deep, safe sediments. This requires the development of a new CO2 sequestration industry which will have to compete with the existing oil & gas industry for geologists, engineers, drilling platforms, steel for pipelines etc. The whole Australian oil industry just manages around 500 kb/d of crude and condensate. If we take 12,500 MW of coal fired power plants in NSW alone, that would mean to increase the capacity of the oil industry 4-fold!!

In a carbon constrained world, Australia's advantage is its solar power potential but this is not being harnessed because of the weakness and complacency in the political system. The first step would be to introduce legislation which prohibits donations to parties.

Professional training of politicians on peak oil and global warming would also be essential. It could start off here by reading this excerpt from an ABC-TV interview with NASA climatologist James Hansen:

KERRY O'BRIEN: What is the most recent evidence of what's really going on with the ice caps, the Arctic and the Antarctic?

JAMES HANSEN: There are two things that are cause of concern. First of all, if we look at the history of the Earth, we know that at the warmest interglacial periods, which were probably less than 1 degree Celsius warmer than today, it was still basically the same planet. Sea level was perhaps a few metres higher. But if we go back to the time when the Earth was two or three degrees Celsius warmer, that's about three million years ago, sea level was about 25 metres higher, so that tells us we had better keep additional warming less than about one degree. And the other piece of evidence is not from the history of the Earth but from looking at the ice sheets themselves, and what we see is that the disintegration of ice sheets is a wet process and it can proceed quite rapidly. We see that the ice streams have doubled in their speed on Greenland in the last few years and even more concern is west Antarctica because it's now losing mass at about the same rate as Greenland, and west Antarctica, the ice sheet is sitting on rock that is below sea level. So it is potentially much more in danger of collapsing and so we have both the evidence on the ice sheets and from the history of the Earth and it tells us that we're pretty close to a tipping point, so we've got to be very concerned about the ice sheets.

KERRY O'BRIEN: You said just a couple of weeks ago that there should be a moratorium on building coal fired power plants until the technology to capture and sequester carbon dioxide emissions is available. But you must know that that's politically unacceptable in many countries China, America, Australia for that matter, because of coal industry jobs and impact on the economy.

JAMES HANSEN: Well, it's going to be realised within the next 10 years or so that we have no choice. We're going to have to bulldoze the old style coal fired power plants

I have just received a reply from KRUDD(the man likely to be our next PM according to the pundits)to my letter titled "Are You A Clean Coal Con-Man"
It's the usual political spin, he does mention that "Clean-Coal" is going to be funded to the tune of 1.5 Billion Dollars(and that's just the power plants no body is even suggesting where the gas is going to be buried and who is going to finance the pipelines) "solar and Hot rocks" are going to be getting a whopping 50 Million each.
Clean Coal is going to have the huge energy cost of cooling and compressing exhaust gasses and then piping them from power stations in Newcastle and Central Coast regions to Bass Straight into an undersea pipeline to an offshore platform and then to disused oil well. The gas cooling and compressing plant to process 20 million tons anually from one of our 2400MW power stations is going to be enormously expensive rivaling Northwest Shelf LNG equipment. Clean coal is only ever going to work where the power is produced near the old oil and gas wells, it's possible in some areas of the U.S. but in Australia not at any acceptable cost, it would be cheaper to pay labourers to pedal power generating bicyles. Renewables are always going to be much cheaper than "Clean Coal" and if it is a goer why then do Governments have to pay the research and development costs and not the very rich mining concerns?
The following passage is a direct quote from the KRUDD letter "Alongside those commitments Federal Labor supports the future of Australia's coal industry. The coal industry employs over 130,000 directly and indirectly and is the lifeblood of many regional communities in Queensland,NSW and Victoria.It is worth remembering that currently approximately 80% of Australia's electricity is generated by coal and all projections show that coal will continue to deliver a significant proportion of our growing electricity needs over the next 40-50 years. As exsisting coal mines reach the end of their life, new mines are needed to ensure that current electricity needs are met.A significant proportion of coal mined in Australia is exported, typically to coal fired power stations and steel makers in Asia.If those exports were stopped those countries would simply source the coal from other suppliers." he then rambles on about the "clean coal initative" for a couple of paragraphs. I don't know how this nonsense could be described as an initative, I would have found him more believeable if he has stated he was going to enter a contract to lease dark energy from aliens.
KRUDD is a man that is a few crumbs short of a cake and has had to hire a sad old broken down rock star that has fallen on hard times to be his environmental spokesman, only poor old "Gunns Garret" is only allowed to criticize Howards Nukes.
Only a complete fool would fall for this fraud that is selling himself as the man to cut greenhouse gas emmissions by 60% by 2050. He has no intention of diverting from the "business as usual" policy of both these Parties which are effectively Organized Crime Operations as they have been warned by the worlds scientific establishment af the grave dangers in the business as usual scenario.
The real danger to politicians is if the effects of global warming occur much quicker than envisaged and some disaster occurs in a large industrial nation like Australia or the U.S.causing large loss of life the people will then come for the politicans with guns and nooses and not pats on the back.See

Re sequestration: The bass strait oil fields are intended to be used for sequestering CO2 from Latrobe valley power stations - the Bass Strait oil and gas pipelines go right past them. In areas further North in Aus, the idea is to put the CO2 into deep (and unmineable) coal seams (not pipe it down to Bass Strait!). The benefit of this is that the CO2 helps drive coal-bed methane out for natural gas supplies as the CO2 binds chemically to the coal more strongly than methane does and displaces it.

This is not saying of course that any of this is actually a good idea, but it is a bit more feasible than you paint it above. The mining concerns have started putting fairly serious money into the R&D but of course they are hanging out for Govt help too (no surprise there).

The volume of CO2 certainly is a problem - I did a back of the envelope calculation a while back that suggested that the total CO2 output from the Latrobe valley would fill the available reservoirs in Bass Strait within 7 years. I believe the coal seams are much more 'roomy' though.

Great article.
In the 'Good News' you miss a major scource of energy, Ocean Waves. Here in the Lucky Country we have over 10,000 km of coastline continually battered by large waves. I've calculated that our ENTIRE energy needs could be generated by just 200 km of wave power converters like the test model at Port Kembla. Of course they wouldn't all be in one place, but spread out around our population centres that, quite beatifully, are almost entirely along this very coastline. We seem to have at least 50 times the amount of wave energy that we need at present.

Of course the power converters can be used to make fresh water, or through localised electrolysis to make hydrogen. But we are better off using the electricity directly for electrified transport rather than paying the energy conversion loss to Hydrogen fuel.

Then comes the challenge of stabilising energy usage, eventually by stabilising population. Now that's a more difficult political issue!

Yes ... it seems to me that wave energy, plus solar, wind, and geothermal, are "low hanging fruit" solutions very suitable to implementation in Australia. Just the Great Australian Bight region you would suspect would be sufficient to provide more than adequate space, and sun/wind/sea conditions, adequate for all three to be successful.

It is a question of scale and network efficiency as well ... it may be better to have such systems smaller and more dispersed, but as noted above, there is no shortage of suitable sites, even with NIMBYism factored in.

I don't know what the life is for wave generators, or whether they have high overheads in terms of maintenance and repair, but solar and wind are relatively low in this respect. The lack of major developments in these areas is a great source of concern. The "vital" issues that politicians argue about seem very marginal to me; mere pennies when compared to a hundred-year sustainable energy plan. Oh well.

In some ways South Australia might be the most energy rich region on the planet :

- lots of wave energy over a long (admittedly hostile) coastline
- lots of solar energy
- lots of hot dry rock geothermal
- not so sure about wind but presumably the south east coast is as windy as Victoria's
- the biggest uranium mine in the world
- some (but declining) oil and gas in the Cooper Basin

At the moment harnessing wave energy is still pretty new (most sites are still experimental) and I imagine maintenance and upkeep is a lot more costly than for solar and wind.