The Bullroarer - Tuesday 27 November 2007

The Australian - Oil price will be a test for Rudd

Sunday Star Times - JEANETTE FITZSIMONS: The good oil is in proper planning

We have already wasted a lot of time, opportunity and money. The government has no excuse for continuing to pour billions of dollars into new roads and motorways, ahead of providing the better public transport and telecommunications facilities we will all need in future. Chronically high oil prices also have huge implications for tourism and trade arguably, we should not be planning for high numbers of short stay tourists. Once peak oil realities become reflected in airline ticket prices, we can expect fewer tourist arrivals so tourism planning should be preparing for fewer visitors and provide for longer stay, quality experiences.

With agriculture, the impact will be felt globally and domestically. Will we still be trucking raw milk between Christchurch and Invercargill to give consumers a choice of brands? Transport costs will sharpen the need to grow food closer to home. Will our high-end markets overseas still find our dairy products affordable? Possibly not, and energy costs may transform our emerging markets driving Asian consumers back towards local cereals in preference to our milk and meat, given that animal protein requires many times more energy inputs than plant protein.

As fish catches continue to decline through overfishing, more effort is already required to catch a tonne. Long distance fishing is the most energy intensive food production on the planet. Will boats still be able to afford to travel those distances? This may put even further pressure on our inshore fisheries, fostering more conflict between commercial, Maori customary, recreational fishers and those seeking to protect marine biodiversity.

As for forestry, we won't be exporting whole logs, and might well begin to use our lower grade logs for energy. Forestry will be a winner the forest processing industry can produce its own energy from low grade product, and sell its wastes as fuel. Enduring high oil prices will create pressure to convert our large coal resources to petrol and diesel. While feasible, this would blow out our greenhouse gas emissions, especially as carbon capture and storage solutions, even if they work, cannot be used on vehicles.

As an initial step, the government needs a Peak Oil Task Force to begin consultation about the risks and opportunities facing each productive sector. Such work should begin now. As the US Department of Energy-commissioned Hirsch Report warned in 2005, to avoid global fuel shortages, measures must be initiated about 20 years before peak oil production is reached. This is because it takes a generation to change technologies like cars and fuel distribution systems, even assuming good alternatives exist. Also, it takes energy to build wind farms, drill geothermal holes, fix up rail and build electric cars or wind-assisted ships. In essence, we need to invest the last of our cheap "ancient sunlight" into infrastructure to capture the future sunlight on which we must all eventually depend.

These need not be doom and gloom scenarios. We have the ability to plan intelligently for when cheap fossil fuels are no longer the bedrock of our economy. What we can't afford is to continue to remain in denial about it.

Dominion Post - The Future of Oil

SMH - Libs Turn on Howard. looks like the Liberals may change their mind about Kyoto after all.

Mr Turnbull and Mr Abbott - as well as the former minister Helen Coonan - agreed that Labor had a mandate to abolish Work Choices and that the Liberal Party had to distance itself from the policy. The former minister Christopher Pyne, who will square off against Andrew Robb and possibly Julie Bishop for the deputy leadership, said: "There's no need for us to hang on to old shibboleths. The Liberal Party is not wedded to policies from the previous government."

On the ABC's Lateline last night, Mr Pyne agreed Mr Howard had stayed too long. "No Liberal candidate could look in the mirror and say the leadership of John Howard was not the central factor on Saturday," Mr Pyne said. Senior Liberals also agreed the Coalition had to abandon its opposition to ratifying the Kyoto Protocol on climate change.

IHT - Western Australia hit by LNG earnings drop

ABC - Thai oil company to invest in Aust's natural gas - Oil and milk form a bright mixture

National Business Review - Fears of US biofuel 'splash and dash'

Energy Current - Tui going strong

STCWA - Newsletter 26 November 2007

The Australian - Bottlenecks still hurting coal exports. This can be a good thing, depending on your point of view. And investing money in expanding coal exports will probably turn out to be a bad move in the medium term.

The Australian - Rio in force majeure on Qld coal sales

The Australian - Olympic Dam report dismissed by BHP

BHP Billiton has dismissed a report that its giant copper and uranium Olympic Dam mine expansion in South Australia could cost up to $US20 billion ($22.6 billion), saying the scope and cost of the project are still being studied.

Citing sources close to BHP, The Times said internal cost estimates for the project had increased to as much as $US20 billion. The story comes as BHP is promoting its informal 3-for-1 share takeover proposal for rival Rio Tinto and any doubts over the project will enhance Rio's rejection of the offer as too cheap.

BHP has not updated the cost of the project since April last year when it was estimated at $US5 billion, but since then BHP has become focused on doubling the size of originally targeted copper production. In addition to converting the underground mine to a giant open cut, the project also requires substantial infrastructure, including major power lines from Port Augusta and a desalination plant on the Spencer Gulf.

I believe that incoming BHP CEO Marius Kloppers has hinted at a completely different approach to the Olympic Dam expansion. It might be called 'value subtracting'. The idea is that shiploads of concentrate are sent directly to China where the copper, gold, uranium, rare earths etc are extracted and refined then sold to customers right next door. Much of the existing Roxby Downs infrastructure can therefore be dismantled.

This approach will save precious water, pesky unionised labour and pesky carbon capped energy. BHP shareholders should be delighted. Above all it will save time as Premier Rann and Adelaide's latte set no longer have to wrestle with difficult issues such as how to save their bone dry state with a shrinking industrial base. It's probably all for the best.

Jeanette and almost all comentators DO NOT factor in the behaviour of markets and the resultant impacts.. Please understand that it is the market that will deliver us a large scale Depression long before the lack of fuel warrants it...

I liked that lead editorial in the Sunday Star Times. I'd like to see something like that on the editorial pages of The Australian... ah well I can dream.

The aim was to crack down on unscrupulous petrol retailers and to reduce the impact of spiralling petrol prices on consumers.

Some rather more positive, albeit radical, responses to spiralling petrol prices would be:

(1) Divert $billions to be allocated to new roads and freeways to electric rail.

(2) All new housing sub-divisions to be linked to electric rail.

(3) Increase petrol taxes on private discretionary travel with compensatory decrease for agriculture, industry, public transport, emergency services, etc.

With a deputy PM who apparently thinks peak oil could be something to do with the way petrol prices go up and down, I am not sure we have a strong foundation for good policies.

[Our local Labor candidate was bamboozled by a question asking her opinion on the relative merits of a carbon tax vs cap and trade. She had no idea what she was being asked.]

How many in the Labor party understand the enormity of the peak oil/climate change problems?

Probably the same percentage as in the general population (ie. less than 5%).

What did people think of Steve Biddulph's article in the smh this morning?

I loved seeing such a doomer article published in the mainstream press. I don't agree with everything he says there as I believe it's possible for conservative forces to become conservative again.

The political forces of conservatism in the West long ago abandoned being conservative and became radicals. Radical spenders holding to a belief that ever increasing economic growth was guaranteed.

The classic conservative values of thrift and caution were despatched along with black and white television. I believe conservative forces will eventually be able to fall back upon those policies and maintain political relevance.

Thanks for the reference to the article. It's a beauty. I particularly liked

The issue of the future, coming down on us now like a steam train, is of course the environment, the double hammer blows of climate change and peak oil. Energy, weather and human misery are the factors that will define our lives for decades to come.

I am not so sure the Greens will become as powerful as he suggests. They have a contingent of Watermelons in their ranks that currently scare off some who are otherwise attracted to their pure Green policies.

I was a bit stunned by that article - not just that something so doomerish appeared in the mainstream press (I've seen a million of these on the web obviously), but that it came from a guy who writes really soft and fluffy books on parenting !

I agree with the comment that the Green scenario appears unlikely but you never know - he's assuming peak oil and climate change have major impacts within 3 years, which I wouldn't bet too much money on myself - I suspect change will be slow for a while (much like the last 5 years) and we won't hit any tipping points causing abrupt changes that fast...