The Trouble With Energy - Part 4

This is part 4 of a series of posts co-authored by phoenix, who is an Engineer heavily involved in the energy sector. It will be based on a submission we made recently to the Australian Government.

Part 1 is here.

Part 2 is here.

Part 3 is here.


In parts 1-3 we presented the problem. In essence, it is this:
- The migration to alternate and renewable energy sources will take a significant time to plan and implement.
- Due to the depletion of fossil fuel resources, we don’t have enough conventional energy sources to support the building of this infrastructure if we assume continuing growth and “business as usual” for this period of time.
- The expense of the anticipated infrastructure will place an almost unendurable strain on GDP.

We now turn to solutions. We have not identified any “silver bullet”, nor is our list of solutions exhaustive. In this section (part 4) we will look at the Australian situation and identify some of the types of questions that need to be asked. In part 5 we discuss some of the issues that the world in general may need to consider.

Exploring Solutions

Energy scarcity is a crisis that will unfold over an extended period of time. In order to deal effectively with this crisis the government needs to take strong decisive actions on a number of fronts encompassing:
- our energy reserves
- our energy supply
- our energy consumption.
The effort required to retool our economy to run on renewables is an exercise that will take decades. Conversely, the impact from an imbalance in energy supply and demand can have serious effects on economies within a matter of months. This was demonstrated by the oil shock in 2008.

Although market forces will certainly sort this problem out, we have seen in recent months that the market can be brutal. The government simply cannot stand back and allow market forces to operate to solve this problem.

The authors recognise that some of the following suggestions will present difficult political hurdles. It must also be acknowledged that, even with the following actions being rapidly implemented, Australia will still have severe difficulties in making the timeframe for transition and timeframe for depletion match.


From the analysis in this paper it is clear that the most effective government action that can be taken is to limit growth in the export of fossil fuels. If, in fact, we froze energy exports at their current levels while allowing domestic consumption to increase at 2.5% p.a. then we would have enough reserves to last till 2082 and thus allow a reasonable time frame for the economy to transition to a fully renewable base.

Implementing such restrictions to exports is politically very difficult. It has implications for our international reputation, creation and the maintenance of jobs, and ultimately for national security. On the other hand, allowing exports to grow unchecked and then attempting to restrict them when a crisis is imminent has even greater implications with regard to these considerations.

Defining Resource Quality

Resource quality is a sliding scale, but is rarely referred to in this fashion. Rather, assumptions are made about price-points and resources are quoted in solid-sounding numbers, based on those assumptions.

It is currently not possible, for example, to get a clear answer to the question “How much oil is left in reserves worldwide?” The answer ranges from 650 Billion barrels to untold trillions, depending on the assumptions made by the estimator.

Given enough energy input, it is possible to turn even the lowest-quality oil shale into synthetic oil, so this range of answers is understandable, but the assumption that future energy infrastructure will be provided to support this conversion is never articulated, and thus is invisible to decision makers.

This lack of detail makes it very difficult for decision makers to generate decisions. Decision makers need reports that incorporate quality as part of the report.

Public Awareness

Because of the lack of public awareness in relation to energy matters many of the actions necessary to be taken by government will be highly unpalatable to the general public and thus political suicide for any government attempting to do the right thing for Australia’s long term security.

Action : The federal government to commence a widespread media campaign to educate the public with respect to energy matters and the need for conservation. This campaign must extend beyond environmental impacts and address the significance of energy security.

Maximising the public wealth

While we have indicated above the pending energy shortages for Australia looming over the next 50 years, it is clear that the international community will experience these shortages sooner and more severely. This implies that there will be very large increases in the value of all fossil fuels.

Other nations have demonstrated that building a Sovereign Wealth Fund based on windfall resource income can avoid the problems associated with “The Dutch Curse” ( ). This would ensure that the value of natural resources are returned to the Australian public purse to help fund the huge expenditure required in building renewable infrastructure.

Action : All Australian states to implement a sliding scale for the application of resource royalties. Under the sliding scale 80% of the change in the international traded price for fossil fuels is taken up by increases in royalty levied on the respective resource.

This one action is probably the most significant, as the single measure will provide public finance for the transition costs, incentive for domestic transition and limitation of the rate of resource exploitation. Of course it must be implemented cautiously in order to avoid serious damage to Australia’s good reputation for sovereign risk.

Australian Ownership of Resources

While the exact dates relating to energy depletion are unsure, two factors are certain. As depletion occurs, the value of energy resources will escalate dramatically and energy resources will become a major source of international disputes. Given that we are not a major world power Australia must take a strategic view and not allow a circumstance to be created that might cause us to be engulfed in a dispute over the development and allocation of our own resources. The first defense against such disputes is to limit, as far as possible, foreign ownership of in situ resources.

Action : All future development applications for extraction rights of fossil fuel resources to require a minimum 80% Australian ownership.


New situations require rethinking of previous paradigms. If unlimited growth is the dominant paradigm then force-growing Australia’s population is arguably a good thing. However if resources are constrained then expanding the population can conceivably lead to social issues. Some current policies may need to be reconsidered. Some suggestions for discussion:
- Stop all but skill shortage based immigration. Or all net immigration.
- Drop the unmarried mother benefit.
- Stop the baby bonus.
Many recent studies have shown that if the entire world lived our first-world lifestyle, the resources required would equate to the resources of several planets.

The current population of Earth cannot live the way the first world lives, so we have three choices:
1. Reduce our standard of living.
2. Reduce the population of Earth.
3. Continue an inequitable system in which the first world lives well, at the expense of the rest of the population.
Ultimately, the rest of the world will want a lifestyle comparable with the lifestyle enjoyed by developed nations, continued inequality is not an option. If we do not want to compromise on standard of living, then we have to look at ways to address our population.

Preservation of Gas Reserves

While our gas reserves are ultimately limited, they are abundant in comparison to our domestic demand. Gas is the only readily exchangeable substitute for oil in many transport and industry applications. A plethora of both domestic and international energy companies are generating proposals for the explosive expansion of Australian LNG exports. While it is unpalatable for Australian governments to limit this industry, the alternative of later having to curtail exports after the infrastructure is built would be devastating to the country’s sovereign risk profile.

Action : The federal government to set in place a moratorium over the development of any new export contracts or facilities for the export of LNG.

Oil Excise

The most immediate effects of energy depletion will be experienced in shortages and resultant price hikes of oil-based fuels. This was demonstrated in 2008 and will be repeated again as soon as growth from China and India outstrips the drop in demand resulting from the global economic crisis. The International Energy Agency has warned that a decrease in investment combined with economic recovery, particularly in China, is likely to create a “Supply Crunch” within 3-4 years ( ).

The approach by government to the issue of excise and tax on oil based fuels will be the most powerful message they can send to the general public concerning the gravity and impact of oil depletion. The general public do not have the knowledge or skills necessary to interpret the likely price effect of the future oil demand/supply imbalance. They will need simple guidelines concerning future price in order to make sensible personal decisions.

Action : Federal government to set up an Oil Excise Commission whose specific task is to maintain a forecast of future oil prices for a period of 20 years out. The oil excise will be set at a level that produces a linear increase in prices up to the forecast. The commission will act independent of the government and be charged with decreasing excise in the event of spikes in the international oil price and increase it when the international price falls. In order for this to be acceptable to the public the net tax take over time could be maintained at current levels.
Action : All fuel excise rebates including the Queensland government general rebate to be repealed immediately.

Biofuel Excise

The government currently imposes an excise on the production of biofuels equivalent to 50% of the tax on oil based products. This tax is therefore imposes a 19c/L impost on the adoption of biofuels as an alternative to oil. It is totally illogical to be imposing special taxes on an industry where growth is critical to the national interest.

Action : Repeal all excise on domestically produced biofuels.
Mandated Renewable Energy Target

Through the existing MRET scheme all of the required legislation and systems are in place for the government to encourage a progressive uptake of renewable energy. The problems that the generation industry have in delivering higher levels of renewables all relate to confidence in the consistency of government policy. This is understandable given the plant and equipment associated with generation has a useable life of 30 years or more.

Action : The MRET scheme to be modified to incorporate the following
- The target to be based on a percentage of electricity consumption and not on a set number of GWHrs
- The target implementation schedule to be extended by an increase of 2% per year from 2020 all the way out to 2050
- Removal of the penalty cap to the tradable value of the RECs. The RECs should be allowed to trade for there full value and the target should be truly mandated.

Conversion to Plug-in Electric Vehicles

The government should facilitate the current trends towards hybrid and electric vehicles, thus encouraging a conversion of oil based energy demand to an electricity base. With future increases in the oil price there will inevitably be a transfer of energy demand on to the electricity generation system.

In the initial phase this will consist of increased load from public transport systems. Increases in load will result from electrification of rail and increased use of conveyor systems in lieu of haul trucks in mining. The major change however will be as a result of the take up by the public of plug-in electric vehicles for commuter transport. Plug-in vehicles should not present severe difficulty for the electricity system to manage if they are confined to drawing power in off-peak times. However, the large uptake of off peak power will necessitate a rapid roll out of timed metering.

Action : State governments to legislate that distributors are to provide access to timed metering to all consumers upon request.

Gas Network System Management

At present power station developers are progressing with a major switch to gas fired generation based on the lower carbon emissions of this fuel. The aggression with which this switch is pursued will depend on the treatment of existing coal fired generators under the new CPRS regime. This switch to gas however is being considered in isolation of the requirement of gas to provide an interim substitute for oil. In combination with proposed LNG export facilities the gas industry is in real danger of an over commitment, resulting in a price hike and disruption to the market.

Action : Federal government to immediately establish a national body for the management of the eastern seaboard gas network. The body will be responsible for forecasting and managing future gas demand in a way similar to the way NEM (National Electricity Market) is used to manage the eastern states electricity market. This body should also oversee the effective roll out of an eastern states gas pipeline network so that this fuel can be used as an interim energy source to cushion the effects of oil depletion.

Vehicle Efficiency
While there is little that governments can do directly to effect the efficiency of motor vehicles there is significant measures that can be taken to influence the acceptance and take-up of high efficiency vehicles.

Action: Increase tariffs imposed on all imported vehicles using a sliding scale based purely on fuel consumption levels.

Action : Impose increased sales tax on all locally manufactured vehicles based purely on fuel consumption levels.

Conversion to Gas

The above mentioned action to restrict export of LNG will be extremely unpopular with gas resource developers. The industry may have already progressed on some facilities to the point where companies would expect financial redress from the state for their expenses.

One possible carrot that could be enacted by the government, is to encourage the expansion of the domestic gas market and therefore provide developers with an equivalent outcome. The development of a domestic market could also be deployed to mitigate disruption from oil supply issues which will take effect much earlier than other energy restrictions.

Action : Government rebates for the conversion of industrial vehicles to CNG.

Support for Australian Industry

The investment of $50 - $100 billion (depending upon which path we take) per year for 40 years represents a sizable portion of the national economy. Typically 20% of the cost of a new power plant is expended on technology and design, 60% on the supply of equipment and 20% on construction.
As a nation we cannot afford for half of this monetary investment to be siphoned off to foreign suppliers of equipment and technology. The government is currently making efforts to support local technology developers and this will be beneficial. There is also a roll for support of local suppliers/builders of the equipment associated with the plants concerned.


We are faced with a number of energy problems. These problems are associated with exponential declines in the amount of energy available for productivity. These declines are additive, which is likely to lead to very sudden, unpredictable outcomes. The timeline for these problems is not known with any certainty, but the oil and gas price spike of 2008 and subsequent price volatility indicates that the market anticipates that a crisis is near.

In this series we have demonstrated that:
1. Our economic productivity is linked to energy availability.
2. Future supplies of energy may be subject to sudden curtailment
3. In Australia, we have the capacity to become Energy Independent, utilizing purely renewable resources.
4. The transition to infrastructure that utilizes renewable energy will itself require time, energy and resources. We will require most of our available resources to make this transition.

The clear conclusion is that if we export significant quantities of our energy resources we risk not having enough to make the transition. Part of our future export strategy should be to estimate how much of our energy bounty can be safely exported without jeopardizing a future transition strategy.

In this, section we have looked at solutions specific to the Australian situation. None are Silver Bullets.

If we want our grandchildren to enjoy a sustainable lifestyle, then it appears that we may need to go through a bit of pain. This period of pain is likely to happen whether we want it to or not...our choice is to manage it, or not.

I support the solutions advocated by the writer,particularly the restriction on energy exports and on population increase.
I realize that the series was probably not intended to explore all energy alternatives,such as geothermal and nuclear.While not strictly speaking renewable they are relatively nonpolluting and have a long life span.These need to be taken into account.

This article should be read with a recent one from the Energy Bulletin - 14/06/2009 - by Lionel Orford.This is a submission to the Australian Government Energy White Paper entitled "Maintaining Our Prosperity During Transition To A Sustainable Society".This is linked by Leanan on Drumbeat,18th June.

There are some intelligent ideas being proposed.The general movement for change needs to get behind them and put more pressure on the current myopic oligarchy.

Pheonix and Aeldric,
I don't think any Australian corporations are 80% Australian owned, certainly not the present LNG producers. If the transition from oil to NG is going to come soon , the last thing we want to do is paralyze present development projects. Similarly, tax fuel at point of use, don't tax the producers or we risk becoming another Venezuela, or worse we will be importing 90% of our oil with a local dollar worth 5 cents.

Your solutions seemed to be focused on keep the energy resources for ourselves, a good policy if we were an economic super power, but we are not, we need the world to raise funds for our banks, we need to import most manufactured products. We also export a lot of skills and services not just resources. The one thing we could do that would set us up for the transition away from oil would be to promote and fund the next generation of PHEV and EV's. If we can transition to 90% EV's in next 20 years we won't need to hold onto that LNG.

The other issue you discussed in parts 1-3 was the replacement of FF by renewable energy. You state the need for certainty of RET, what's wrong with having a fixed amount at specific years, 45,000GWh in 2020, increasing by a set amount per year. A RET% of total energy keeps everyone guessing about what demand will be in 5, 10 , 20 years, no one knows this.

If we want to support local industry manufacturing wind and solar energy we need a strategy that allows efficient production not tariff barriers that result in small scale inefficient and expensive manufacturing. While the world industry is growing at 30% there are opportunities for new manufacturers. I would hate to see the wind industry hobbled by problems with importing components or export bans on LNG forcing NG onto the local electricity market and threatening the future development of renewable energy. A competitive industry is always better than a protected RET quota industry , because quotas can change with a change in government.

We need to address continued replacement of renewable energy infrastructure now, before it generates 90% of our energy. We need to think of recycling options, the need for maintenance, tax codes to allow upgrades to improve efficiencies.

I agree with the development of PHEVs and EVs, however their are two problems:
- It is highly unlikely that the development and production of these vehicles will occur at an appropriate rate to address a rapid shortfall in oil availability. Whereas we could , with the right incentives, rapidly retrofit a large proportion of the existing vehicle fleet with CNG capability.
- EV technology is not at the point where it can be effectively used for heavy goods transport or for applications such as mining and agriculture machinery. Some of this demand could be replaced using electric alternatives (rail, conveyors etc.), but again this will take many years to put in place.
We recognise the political difficulties associated with "locking up" our energy resources from a world that is militarily much stronger than us. We need to play the issue very carefully. The greatest advantage we can generate is to leave as many options open as possible.

I understand your point on the RET. The trouble is that successive governments have used fixed RET numbers to hoodwink the public into believing the target was considerably higher than it is. The current 45,000 GWhr target was sold to the public on the basis that it was 20% of consumption. The reality is that (in a BAU scenario) by 2020 it will represent probably only about 15%. This is not only confined to the current government as the previous administration indulged in the same trick. So in reality after 20 years of the scheme being in place we will have increased our renewables proportion from 9% to 15%. Not exactly the fantastic result being claimed by the politicians. Maybe the answer is to set the target as "the larger of" set quantity or percentage.

The issue of local industry is a difficult one. It seems that Australian participation is decreasing rather than increasing. Unfortunately, the situation is likely to get even worse in the near future with the introduction of Chinese made turbines into the market. Although I am generally against tariffs to protect uncompetitive industries it may be that a period of tariff protection is the best solution to allow the industry to get effectively started.

PHEV and EV's don't have to replace all ICE applications they only have to replace the oil shortfall. We don't know what this is going to be, but can assume the price of oil will be over $150/boe, or at least $AUD 2/L in Australia. This alone should stimulate some conservation and a longer term improvement of ICE vehicle fuel economy.

If the decline in oil is fairly rapid, retrofitting CNG will be a good stop-gap measure, as will retrofitting vehicles such as the Prius to be plug-in until more PHEV or EV's are sold. After that a shortfall will mean higher prices or petrol/diesel rationing or both. Rationing at say 50% of the average consumption will buy a lot of time, will ensure PHEV and EV are sold out, and won't be too draconian. Many people will be able to use a lot less than this and sell unused coupons to those who really need a vehicle or cannot car pool or use mass transit. There are many older high mileage fuel efficient vehicles that can be kept running with a little higher repair costs. On the other hand, rationing will send the older Commodores and other gas guzzlers to the wreckers long before they wear out.

Even if some or most turbines are imported local manufacture of foundations, and towers should be cost competitive, and in 20-25 years the turbines will need replacing or local overhaul so opportunities will arise for a vigorous local industry. The rapid expansion in China will ensure many opportunities in many smaller manufacturing countries to compete in local manufacture.These are still not mass production items that benefit from the scale available in the auto industry, although some components may be. While we can build and repair cars locally we should be able to build and repair wind turbines or solar CSP.

The trouble is that successive governments have used fixed RET numbers to hoodwink the public into believing the target was considerably higher than it is.

And then you can add the farce that is the new Solar Credit program (your Solar PV system is 'worth', say, 30 RECs, but under the SC program you now get 150 RECs. All of these RECs (including the phantom ones) count towards the MRET equally).

Thanks for laying out some interesting scenarios for Australia's future. Though I've lived mostly in the USA, I have close relatives and friends who live in Australia, and I've participated in the World Solar Challenge. With that race in particular as part of its heritage, Australia has a head start over other countries.

I want to start with your comment:

> None are Silver Bullets.

I don't like the violent metaphor, but I know what is meant. Unfortunately, this cliche has dominated the discourse, and has the effect of discouraging everyone from taking a hard look at the alternatives and discerning what's worth the trouble. We aren't going to get there by scattering our focus and giving government funds to every wacky scheme that comes along. There are a couple of simple metrics, Energy Return on Energy Invested, and carbon emissions, especially in light of recent reports on global warming and acidification of the oceans. With these metrics it quickly becomes obvious that renewables in their various manifestations will do the trick – not without serious effort of course.

Please, no more talk about silver bullets. Do the math, pick the winners, and get on with it. There's no time to waste!

> Repeal all excise on domestically produced biofuels.

Au contraire, stop producing biofuels and stop importing biofuels. The surest way to accelerate the intolerable loss of soil and water (domestic) and the destruction of our remaining rainforests (imports) is to promote biofuels. In the transport sector, 80% or more of any fuel is converted to heat and 20% or less to forward motion. That forward motion is then 90% metal and 10% people. Then, 20% * 10% = 2%! Except for rural transport, fuel in the 21st century is absurd. The Internal Combustion Engine is as appropriate in the urban setting as a wood fire surrounded by stones on the floor of a kitchen. Biofuels don't change that; in fact they make it far worse by eating into our food supplies and our oxygen regenerators. We can be more clever than that.

> The government should facilitate the current trends towards hybrid and electric vehicles

That would still be 90% metal and 10% people. Worldwide, the automobile delivers ~1 million traffic deaths per year. There is an alternative in the works, and Australia can choose which side of the equation it wants for its economy: to create true wealth and export creative solutions or continue with Business as Usual and import solutions later from other countries.

Remember the Chinese billionaire who learned about solar at U NSW, and then went back to China. With its leadership in solar energy and solar transport, Australia has a chance of becoming a commercial powerhouse.

If Australia wants a tolerable climate, it won't be exporting coal! If Australian wants an economy, it will join the Solarevolution!

Do the math, pick the winners, and get on with it. There's no time to waste!

The whole problem in a few words. There is not one winner, like fossil fuels, most of all oil, is. That makes it more difficult (and timewasting) to pick the winners for the (coming) liquid fuel problem. There is no time to waste, but as correctly stated in the article, the governments must wait; otherwise they will commit suicide.

None are Silver Bullets.

I don't like the violent metaphor, but I know what is meant. Unfortunately, this cliche has dominated the discourse, and has the effect of discouraging everyone from taking a hard look at the alternatives and discerning what's worth the trouble.

The cliche can be read over and over again because it is generally considered that breakthrough's are necessary to solve the coming liquid fuel crisis. In many countries scientists are working hard to find them, f.i. developing more suitable algae species, so what you write about 'discouraging' is not true.
The biggest problem for now is that most governments will wait with 'large scale- actions'. Later more problems will come: as part of the action will be for governments to conserve their own energy resources and not export or export less then the energy crisis will hit many countries much harder. The needed cooperation worldwide will be very difficult if not impossible in this situation. Imagine countries like Russia, Mexico, Canada and Norway taking this decision in a few years, how much oil will be available for export ?

> Stop producing biofuels and stop importing biofuels.

This. Except for Weetbix and vegemite. Great fuel for bicycles.

The one thing I'm interested in knowing more about is the future of cars in australia.

At some stage I'll be looking to buy my next car, and as someone who's been Peak Oil aware for sometime, I believe the price of petrol will go (further) significantly higher in x years time, but don't believe our entire nation will collapse into a mad max scenario.
So what sort of cars should I as an individual be "investing" in? (if I can ask such a foolish question)

I figure if I wait long enough, a plug in Hybrid will be the way to go.
Just have to wait not only for the manufacturers to attach a power plug, but for the price to come down.
How long will we have to wait? before the price makes it worthwhile? 3-4 years?

Besides that, are we looking at Diesel, Petrol (convert to LPG) or Petrol (convert to CNG)

With diesel, when oil becomes too expensive, will we get enough diesel replacement with the biodiesel and UCG-GTL?
What sort of lag time will we be looking at?

With LPG, I've been led to believe Australia's got plenty, and with virtually all servo's having at least 1 LPG bowser, we're already ahead if we need to convert to LPG as a nation.
As such, is it worth getting a V6 Petrol engine, and converting it to LPG when the need arises.
(get V6, not the 4 cylinder as converting will reduce x% power)
How much does running the converted LPG car reduce the life of the engine?
How quick to upscale the entire intrastructure from oil well to bowser?

CNG, Is this an option? again buy Petrol V6, and convert once economics and infrastructure are ready.

I assume I'll get alot of valuable advice here, so interested in your thoughts.
Not just which way to go, but how long the conversion to the new infrastructure will take
(that's why I'm leaning to Petrol V6, thinking to convert to LPG in the future)

Depends on useage pattern. Most people could get by well enough using Public Transport, especially if they combine trips instead of making three or four a day. It'll take longer, generally, than using your car, but you can do 'stuff' while on PT that you can't do in the car (due to the necessity of having to keep your eyes on the road), so it might not be 'lost' time at all.

If I was in the merket for a 'new' car, I'd buy something with a body in good condition, but old enough that you don't have a central computer controlling everything from the ECU to the seat position. If you can find something in good nick pre-unleaded, I'd grab it. Then spend the next year or two converting it in your garage to pure electric. Lead-Acid (not my personal choice) can get you about 40-50km/charge before you start overloading your shock towers/brakes/etc. They'll last a shorter time than newer chemistries like LiFePO4, but they're cheap, and recyclable (and once they're not good enough for vehicular use, you can still use them as battery backup for the house). If you convert a car yourself, I'd probably go for a low-voltage conversion, as it reduces the risk of electric shock while performing any maintainence (risk of electrocution, even in an accident, is close to zero if you design the conversion properly). 72V seems a good compromise between 'workability' and safety.

In the meantime, look for another car in good overall condition, that gets high mileage. Use that as the daily driver until the EV is on the road and the bugs are worked out. If you can find a car that comes in both Diesel and Petrol flavours, that's a good choice (gives you options later on wrt converting to BioDiesel or CNG). If it comes with a LPG tank, use that for now.

The average car in Australia does around 50kms/day. That's achievable on both CNG and Lead-Acid. Yes, there are those who drive two hours to work, but they either have PT as an option for part of the journey, or are in the minority who have no PT access (they'll end up using LPG, BioDiesel, CTL-Diesel, or giving up their cars altogether, imo).

But if you can avoid buying a car at all, do so. You'll save a lot of money by forgoing the 'convienience'.

FWIW, I think the 100km each-way daily commute is dead. It's just a matter of waiting for someone to pronounce it.

(get V6, not the 4 cylinder as converting will reduce x% power)

In a time of scarcity/sky-high prices, 'power' isn't going to be the #1 concern, I don't think. Simple mobility will be.

Then spend the next year or two converting it in your garage to pure electric.

A group of us just converted a car to electric in 3 days for around AU$7500. More info including videos, CAD files, parts lists here.

Addendum to previous comment:

If someone decides to buy a car for an EV conversion, I'd consider one of the common cars over a less-common import. Cars I'd suggest are Holden Commodore and Ford Falcon derivitives (Utes, station wagons, sedans, Statesman, Fairlaine etc etc), Toyota Camrys (older versions), or a single- or twin-cab 1-tonner ute. For a family, I'd consider, in order, Station wagon, twin-cab, sedan.
Something with a lot of cargo space (utes, Wagons) will be a lot more useful than a mirco-car (YMMV, micro-car might be a better choice close-in to a CBD).

Choosing a common car means parts availability. I like the look of the Skoda Octavia, but buying one is a risk, due to the high dependence on imported components.

I am wrestling with exactly the same problem myself. If I could buy a small low cost PEV right now I would. Unfortunately, I don't think they will be on the market for a year or more and when they are available are likely to be way more expensive than they are trully worth.

A couple of point with respect to your considerations:
- LPG is a by-product of normal oil refining. If we have restrictions to oil supply they will likely effect LPG as well.
- Biodiesel production in Australia is virtually non existant. Again, if we have any interuption to supply it will have no effect on availability to the general public. It may be a long term solution but will take at least 20 years to come into effect.
- There are some conversions to CNG happening but these are being undertaken on a very small scale. I believe a company in melbourne is doing some. As far as I know there are no CNG vehicles available on the market even though the retail cost of CNG is equivalent to around $0.80 per litre.
- You can get conversion kits for the Prius that equip it as a PHEV. I think they start at over $2000.

Much will depend on your use rate and distances you need to travel. I hope the above helps.

"If I could buy a small low cost PEV right now I would. Unfortunately, I don't think they will be on the market for a year or more"

They are on the market now:

These are far from perfect, and they have real drawbacks when it comes to really cold weather. They won't quite make the 100k trip to work that, as has been noted, is soon to be a thing of the past. But I've gotten about 80k on a charge.

As others have said, the best is to find a way to live without a car.

Hi KNSChell,

I think Bellistner is right in that you really ahve to look at your usage patterns and try to modify them first, before looking at alternative fuels/engine types etc. I went through this exercise myself in 2006 when I had to move my growing family from an inner city property back to a suburban home a little bit futher out. I live in a regioanl city so "further out" meant moving 2.5 km further away from the city centre. We percieved this however as being just far enough out, that my wife and I would require a car each, as my job as a sales rep meant I lived in the car all day long and she would be stranded in the burb. I looked at diesels, LPG, Prius but finally settled on an 18 month old Commodore, 30,000 Km on it and cost just $18,500. The capital cost of buying any other option meant that I would either have to own the thing for 20 years to save enough on fuel costs to justify it. In the end, I just didn't see happy motoring lasting that long and didn't sse the point of owning an expensive dinosaur. I like my dinosaurs cheap.

The other thing I did with the money we saved on the purchase of the car was to equip the whole family with bicycles, including a tag-along bike for my six year old and a Wee-ride seat for our baby. I have since built a cargo trailer as well and we can have some really pleasant family outings without having to get the car out. Trips to the shop are now doen with the bike and trailer and we bulk purchase our staples like dog food, tinned fruit, bread mix, rice ect to save on car trips, not to mention packaging.

I have since left my car dependent job and now ride the bike 15 mins into my new office, which is not even enough to break into a decent sweat. My wife has also modified her outings to the point where our petrol budget is about $20 week. The Commodore now sits in the garage and gets taken out only when the whole family needs to go somewhere together. The effciency in passenger kilometres per litre is really quite good when the car is loaded to capacity, but lousy when it is just driver and car.

We could probably get by with one car again, but it is still cheap enough to register and insure them for the convenince of having them available. That only makes economic sense if we severely and voluntarily restrict their usage. Because we have modifed our usage so much we now have more choice about what we drive because the fuel cost is no longer a significant factor in the overall cost of owning it. Our big family car is now used mostly for longer trips which for us is no more than 300ks (600 round trip). Our family holidays are mostly camping trips to the mountains or the along the river so a 4WD may be the most appropriate family vehicle to buy if or when we ever buy another vehicle. It won't matter what the car runs on from a cost point of view as we will use it so infrequently that the capital cost will represent the biggest decision.

Everyones circumstances are different, but before you go car shopping it is most important that you do whatever you have to to reduce your overall reliance on a car in the first place. If the type of work you do may be vulnerable to fuel price spikes or shortages, you may want to look at fixing that first. Then check all you other habits and work on them. Your best car to own may be the one you already own. The cost to change over your car to a a more fuel efficnet model may negate any savings you might make. A lot of cars get changed over for vanity reasons too these days and there are plenty of so called "greenie" Prius owners who would use way more petrol than than a gas guzzeler owner like me who drives a whole lot less. Do the research and let us know what you discover.

At some stage I'll be looking to buy my next car, and as someone who's been Peak Oil aware for sometime, I believe the price of petrol will go (further) significantly higher in x years time, but don't believe our entire nation will collapse into a mad max scenario.
So what sort of cars should I as an individual be "investing" in?

In my opinion, a regular hybrid, with an upgradable electrical component. I think a Prius, plus a plug in conversion kit fit the bill. At current battery, and fuel prices the conversion is uneconomic, but as batteries should get better, and fuel more expensive a crossover point might be reached. Of course even the Prius plus major battery upgrade would not be a true plugin, even fully charged, you are likely to use the ICE for acceleration and hill climbing. But, I suspect the milage with a precharged battery would be well over a hundred US mpg.

Of course the other option, modifying your lifestyle to reduce dependence on cars is also a good one. You might be able to pursue both approaches in parallel.

Two things:

1) Where's the nukes? Sure Australia should be moving to renewable sources as well, but given time horizons and rates of installation, it should also have a program of building nuclear power stations ASAP. It's got the raw resources, it's got the space, it's a no brainer.

2) The single most important thing Australia could do as a society is reject america as a model to follow. Wholescale turning the back on that, and with it the soulless suburbs, zoning, poor energy economy, car culture, etc. would do much to improve matters. Australia is far too much US-lite.

Yes, nuclear could provide a significant part of the solution, but not if we just impliment the current once through reactor technology. This is not only highly wasteful in terms of fuel it is also the main contributor to the nuclear waste disposal problem.

Australia could develop a standard reactor type backed by the Australian government in a similar fashion to the development of the CANDU reactor by Canada. Ours should be based around a liquid thorium cycle.

Using nuclear power, especially LFTR, would come as close to a Silver Bullet as any technology we have in the near future, (10-20 years). High coolant temperatures of around 600ºc give efficiencies of about 50% for electrical generation. Liquid fluoride salts eliminate high energy coolants reducing the problem of containment. The Thorium fuel cycle produces a negligible waste stream compared to common PWRs, and using the “Green Freedom” energy to gasoline system you have a carbon neutral system to produce chemical feed stocks while eliminating the need to drill or import oil.

"Australia is far too much US-lite."

but then masses are far too hypnotised by the MSM. can't change that easily Gary :)

Natural gas for transport is still problematic in my view.
It takes ~1.13 cubic meters of standard natural gas to produce the energy equivalent of 1 liter of gasoline(not looking at diesel).
Australia uses 21 billion liters of gasoline,so that equals 23.7 bcm of natural gas which is a bit less than 2005 natural gas consumption ~26 bcm. If Australia has 2.5 trillion cubic meters of natural gas reserves then at a drawdown of 50 bcm(23.7 +26 bcm) per year it will 50 years.

Given the wind and solar resources of the continent, which are several times more than what is currently used, why depend so much on Fossils to make electricity? But, to use them to even a fraction of their potential Renewables need a German style Feed-In Law; quotas like MRET are much less effective (better than nothing, though nothing is the standard of comparison here). Australia has lots of iron ore, coal and limestone, enough steel and concrete to completely power up the coastlines with wind and locally made wind turbines, and the resources to manufacture all the required wind turbines. What's your problem - are the Aussies too wimpy for such a task? In general, I would say no, with the minor exception of your corrupt corporate class (though to be fair, the US corporate class has you beat on that aspect) and the politicians and media they purchase.

And then there is terms of endowment, Australia has "more than a mouthful" of solar resources - both solar thermal, PV and CSP. Just consider the concentrated solar power potential located near relatively cool ocean water. And in fact, you might even want to put some of that solar thermal energy to work and start making drinkable and farmable water out of seawater for selected locations. A lot of the smaller inland towns/semi-desert towns could do real fine by PV (again, only really possible with a Feed-In Law). And for places like Tasmania and Western Australia, and parts of NSW - probably lots of wave potential, too. Granted, your electricity will gradually have to go up in price a bit, but getting efficient, and designing houses that minimize the air conditioning load would do wonders. Maybe regions like Sydney could institute a mass ocean water district cooling setup, drawing in deep, always cool water as the heat sink, and discharging it on the ocean surface. Odds are, that would work for the Melbourne, Adelaide and Perth regions, too, and that is roughly half of the population/AC load. As for electricity storage in places like NSW, you have cliffs near the ocean - instant pumped hydro, and on a massive scale too.

There are lots of smart, clever and hard working people, and probably way too many unemployed people in Australia. And you don't need ANY nukes, coal burners or even gas burners to power up the country, electrically speaking. But present laws and an unholy alliance of big companies/"fossil fools" and conservative ignoramuses/politicians/media types (Australia did puke forth the Murdoch clan, right?) are a severe Osmium (a very dense, very poisonous metal) anchor around your necks. Ditch it and life will be a lot better; keep it and most of the country will drown in debt, die of "drought" or sink financially when you find that a lot of your very valuable resources were sold off for pennies on the dollar compared to what their real value was, and mostly to enrich the local financial elite, or an assorted evil tribe of international corporatism/finance speculators, and worse. Not to mention the fact that a lot of the population lives close to ocean level, and Global Warming caused ocean level rise will render that valuable (for now) waterfront to revert to (maybe) fish farm status.

The world could use another country adopting a saner energy policy - good examples are hard to come by these days, and the USA is the poster child of that trend (not too many good examples, including that incredibly wimpy ACES bill, despite the presumably good intentions behind that bill). But, Australians (humans and all other species) would be the main beneficiaries of a saner approach as described here.

Anyway, good luck with your efforts to move Australia from the dreadful course of the previous administration. Like Bu$h & Co., they were bad to the bone.


What's your problem - are the Aussies too wimpy for such a task?

Wind Turbines kill birds, and ruin the view, dontchaknow... :rolleyes:

Mostly sensible solutions though I might quibble with the idea only Australian owned companies can own energy resources and using natural gas for electric power generation at all.

It really doesn't matter who owns resource rights as long as the company is not an extension of a national government. The Australian government can make whatever laws regarding export, production levels or what have you and enforce them regardless of whether the concession is run by BHP, BP or BTU. Where you might run into trouble is allowing resource investments where the investor is controlled either directly or indirectly by a foreign government. A Gazprom for example.

The advantage to Australia in allowing for foreign ownership is access to capital, technology and reciprocity for its own not inconsiderable mining and resource industry.

As a note aside, if the energy shortages you predict materialize, the world is going to be a dangerous place. Therefore phasing out energy exports NOW would be a good idea. No sense in creating relationships that will have to be abrogated or waiting until crunch time to wean domestic producers from foreign markets. A question for the writers. How do you suggest dealing with non energy but strategic resources such as iron ore and might Australia feel the need to develop a nuclear deterrent before the inevitable crisis erupts?

As to natural gas. Using this most valuable
and versatile resource to generate electric
power is crazy. Beyond its intrinsic value, gas, like oil, is subject to wild swings in price. This can prove devastating where gas makes up a large proportion of generating capacity. See California circa 2000.

Biofuels can be made without cutting into food supply in some sort of theoretical world where only new water sources (like an aquaduct from New Guinea to South Australia) were used for production.
We do not live in such a world.

Not necessarily.

We could impliment algal CO2 capture from each of the Australia's coal fired power station units. The net effect would be to:
- Reduce CO2 emissions by 32,000,000 T/year
- Provide more than half the current liquid fuel demand
- Be a significant net water producer and refiner

The area is large, about 350,000 hectares, and to this extent would impact marginally on farming output, but in the comparison to Australia's overall farming capacity it would hardly be noticable. The net reliable water production may in fact increase food production from surrounding farmland.

The cost would be high, but not higher than the current proposed costs for CCS. The technology is basically in place but would require a degree of engineering to optimise efficiencies.

I'd like to know why you reject government involvement in the development of Australia's power generation? Power generation in general, and renewable energy generation and transmission in particular, requires huge amounts of capital... tens of billions every year even for a country the size of Australia. In that context, the government-owned utility model has many advantages and should not be rejected on rigid ideological grounds.

There are many advantages for a government-owned utility in charge of renewables :
1- The full faith and credit of the State, which means the capacity to quickly raise a lot of capital at a lesser cost to the ratepayer;
2- Government borrowing is less affected by the economic cycle and we've probably entered an era of higher economic volatility;
3- The state owns a lot of Crown land; it's easier to build when you already own the title for the site of a large solar arry or a wind farm;
4- Profits stay in the country, save for some of the bond coupons, sold to foreigners;

I cannot see where we made any comment on the public/private ownership aspect of power generation. I believe that government ownership is essential in some areas that involve the implimentation of new technology ie. nuclear. It is also highly desirable in areas that effect national security and long range planing.

I think Australia should formulate a long run policy for gas usage. The alleged 500 tcf (nearly ten billion tonnes) of natural and coal seam gas will disappear quickly with the combination of Peak Oil and carbon constraints. Of course a lot of that gas is deepwater or may face cleanup problems. Within a decade it seems likely that CNG will become a major vehicle fuel the same time gas fired electrical generation is used to lower CO2 relative to coal.

I suggest we have
high priority- ammonia production, CNG, domestic and industrial gas grid, electrical generation to balance wind and solar
low priority- other peaking power
liable for elimination- gas fired baseload, LNG exports.

Perhaps the ratio of gas fired peaking to wind and solar should be set by regulation (eg 1 kwh gas to every 1 kwh renewable) or perhaps a portfolio standard of say 200 grams of CO2 per average kwh.

If CNG vehicles are dual fuel for a few years they could still do longer trips on expensive petrol/diesel but over time the number of filling stations could increase.

Biofuel Excise

The government currently imposes an excise on the production of biofuels equivalent to 50% of the tax on oil based products. This tax is therefore imposes a 19c/L impost on the adoption of biofuels as an alternative to oil. It is totally illogical to be imposing special taxes on an industry where growth is critical to the national interest.

Action : Repeal all excise on domestically produced biofuels.

Not sure I actually agree with this. The point of the excise is to raise revenue for the government by taxing energy consumers. High energy consumers should be paying the most tax as they are the ones who are derivng the greatest benefit. At the moment, bio-fuels are going into the general fuel supply by being mixed with fossil fuel products. In the case of bio-diesel, this is just subsidisng the big transport operators who have accesss to to it. The bio-fuels industry is already getting a special subsidy by having cheap excise. Removing it altogether creates an artificial profit gift to bio-fuels industry and their limited customer base. Extending this may further divert much needed food crops to bio-fuels.

The diversion of some food crops to bio-fuels may be necessary anyway but can only be considered as important if the bio-fuels are used for sustainable fuel supplies for farming broad acre cereal crops. This should be the highest priority of government. A second priority may be for defence. Way down the line will be fuel for family cars and small businesses to keep the consumer economy humming along. The bio-fuels industry is strategically very important to Australia but we cannot afford to delude ourselves that it will ever produce more than enough for anything other than the absolute critical emergency functions.

Rather than repeal all excise from bio-fuels, perhaps thae goverment should be creating an equalisation excise with fossil oil, and then pumping that money back in to the industry through co-investment to expand it. This would assist the industry more in these times of difficult capital raisings and give the governemtn more leverage to direct bio-fuels to the agricultural sector as a matter of priority. Converting some of the big tractors to CNG is another project that governments may be able to prod the industry into as well.

Hello TODers,

"She comes down from Yellow Mountain.."

IMO, pricing recovered-S as a waste by-product is sub-optimal as we go postPeak. It will only exacerbate ecosystem decline and encourage greater Overshoot to ensure the fast-crash Thermo/Gene Collision, a quick Olduvai Gorge, and the Net Hubbert Shark-fin Curve. We will be better served to economically imitate Nature, as detailed by Asimov's Bottleneck List, to help assert Webb/Pomerene strategies for Optimal Overshoot Decline.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

In general a very interesting series I like it a lot. What is miss is the cheapest way to mittigate a part of the problem:

Reduce energy consumption.

In sunny Australia no gas or electricity should be used for water heating (Solar should do fine)
Washing machines can also use solar hot water instead of using electricity to heat up water
Things like rainwater capture can reduce power consuption for cleaning of water / desalination plants (i don't know if you have those)
Rainwater infiltration instead of sewage. Good for restauration of natural moisture in soil, but also saves power for cleaning of perfectly clean rainwater
A lot of gadgets use a lot more power then absolutely necessary

It's in dutch but the pictures are prety clear ;)

I am sure that on developped coutries energy consuption can be reduced by 30% without impact to living standards. The US should be able to do a 50%-60% reduction without big reduction in living standards.

Reducing Private Automobile traffic is the most efficient way of immediately reducing consumption of valuable energy resources.

Any fool can see that enormous amounts of petrol is being wasted by the "need" to carry 1000 or more kg of metal, glass and plastic around everywhere one goes, and that valuable space is wasted in cities by the space they occupy.

Single occupancy vehicles need to be eliminated from population or commercial centers.

They can be replaced with "hybrids" with three or four rows of seats which can carry up to seven passengers within a 10 km radius of existing "centers of heavy traffic".

There shouldn't be any problem finding qualified "drivers" for these vehicles.

By eliminating SOVs from the roadways, "islands" can be provided for the safe loading and unloading of passengers from the driver's side of the vehicle.

Transfer Stations with parking can be provided for those entering the exclusion zone.

Petrol waste could be reduced by a minimum of two-thirds by adopting such a system.

Until the "hybrids" become available (2-4 years), ordinary cars or SUVs could work during the transition. Some could be adapted to pull passenger "trailers" also adapted for this service. Motorcycles could be allowed without restriction.

You might have to reduce the speed limit temporarily--but soon, it will be much quicker to get from point A to point B in zones that are now congested.

Why did Australia not join ITER? (Good Graphics)

Points to ponder.
ITER shows how serious the energy problem is. That is a lot of money to throw at a non proven technology. I wish them good fortune.
It shows that the policy makers are aware of the problem.

Could Australia be acting as a spoiler by not joining? What could have motivated them not to join? Coal?

I cringe when I consider that we will have to go begging cap in hand for our first Tokamak.
Lesson from Henny Penny.

Australia is very good at waiting until technology is proven before buying it. Australia is not an early adopter. We let them foreigners iron out all the bugs and then rapidly deploy the second or third generation which we are very good at rolling out. We are great innovators and jerry riggers but we are not stupid enough to adopt wholesale unproven technology and that culture has served us well over the years as we tend to get more reliable technology on a widespread basis when it arrives here.

I don't think not being part of ITER had anything to do with coal. I think it had more to do with the miniscule possibility that ITER will ever work.

Baby Bonus like GST cannot be repealed. You are building castles in the air. Very desirable but highly unlikely.

"While the exact dates relating to energy depletion are unsure, two factors are certain. As depletion occurs, the value of energy resources will escalate dramatically and energy resources will become a major source of international disputes. "

Why is the escalation of value (price) of resources certain? I can think of at least one scenario where price would decline. Economic depression that we may now be heading into reduces demand. Even as production declines, price declines with reduced demand. Also, a concerted effort to conserve would reduce demand, keeping prices low even in a lower production environment.

Does the problem of resource wars as a result of competition (and higher prices) for limited resources assume a BAU growth or at least steady state economic scenario?


I guess nothing in life is certain. However, for prices to go down we would have to engineer a circumstance where the demand reduction from economic depression, conservation and replacement in the first world exceeds the demand increase from the third world plus the rate of supply decline. While this is theoretically possible I think it is a very remote possibility.

With respect to oil, I think that over the next 20 years we will continually bump up against the ceiling of the decline curve. Esentially the reduction in demand will be forced on us rather than it being a product of managed government planing. The underlying price of oil will steadily increase and each time we bump against the curve we will see a price spike that will result in a subsequent economic recession/depression. After a few of these spikes it is possible the general public will "get it" and then we will see some real effort at transition.

Perhaps after the experience with oil the public will be able to accept the idea of peak gas, coal etc. a little easier.

Phoenix, your point about the third world impact is well taken. It would take total global collapse, TEOTWAWKI, to completely destroy demand. That will likely take a few more decades ;-)

RE: "getting it," I learn pretty quickly when I crack my head on an open cabinet door. I suppose the time required for our collective learning curve will be inversely proportional to the degree of truth we get from "leaders" as we wonder what's causing the pain and what's the best medicine.

BTW, I've enjoyed this series. Great insights into Australia's circumstances and opportunities.



“We have to remember,” Trent said, quoting Marshall McLuhan: “we are not passengers on spaceship Earth, we are the crew.”

Right on! We should go back to being passengers and stop messing with the automatic controls. While we make lousy passengers leaving our cigar butts and baby wipes all over the place we make worse crew alla time fixing what wasn't broken.

In general I agree with so much of what you say, and I've never been moved to respond to anything on the oil drum in a year of perusing. However, "drop the unmarried mother benefit" is so unconnected to any of the issues here that I feel compelled to express my disappointment. The only thing achieved by this action would be more children living in poverty. Not less children. And more poor women locked in a spiral of poverty. Our birth rate is low because we are a developed country. In the face of future challenges we must defend our social welfare network, not chisel it away so that we descend into a dog-eat-dog society. You succeed or you starve? or you prostitute yourself to feed your kids? THIS HAPPENS! I have lived in other countries that are not so lucky as ours, and this is what happens. The poor have the highest birthrates, and the highest rate of young mothers.
Population is a complex issue.
I also don't agree with the skilled migrant only category because I think we will never improve conditions on the planet by denying basic human rights to anyone. I am referring to people living in Australia unable to see their elderly parents because there is a 10 year waiting period for them to get a visa. Also to the brain drain that other countries suffer, after spending public money to educate doctors, engineers, etc, the graduates go to greener pastures and pay tax in another country.
It is valid to consider population. But we should not be so insular and so selfish. It is wrong to be so comfortable and only wish to protect our privilege. Of course, we can't do much, we need to measure carefully what we can do, but we can't do nothing.