However, this does not mean we have to be ensnared in the negativity of incessant doomsayers or the wilful ignorance of the peak oil denialists. Governments and citizens can meet the concurrent challenges of oil scarcity and anthropogenic climate change with innovative pathways for a sustainable future. We should not approach increasing oil scarcity with reticence and fear, but as an opportunity to immunise our economy from the difficulties of energy security.
Creating a Peak Oil Strategy
In the absence of a whole-of-government strategy and a comprehensive cross-departmental engagement, a peak oil task force will deliver the information we need for sensible and effective response to peak oil. Responsible governance requires foresight and planning. Praying for particular contingencies to come to fruition without a backstop safety net is irresponsible.Rather than rising to the cross-departmental challenges of oil scarcity, which implicates areas such as urban planning, agricultural production, manufacturing, mining, food production, transport, aviation, tourism and environmental management, the New South Wales Government’s response demonstrates parochial, one-dimensional denialism. What happens if we fail to find alternatives to petroleum used for transporting people and essential goods, which currently consumes 75 per cent of Australia's transport fuel?
The potential implications of peak oil will be immense and far-reaching. The challenges of peak oil permeate a multitude of sectors in society and a one-dimensional response will not secure our livelihoods. The recent Commonwealth Scientific and Industrial Research Organisation [CSIRO] paper "Fuel for thought—the future of transport fuels: challenges and opportunities" models four key oil price scenarios, one of which would see petroleum-based products range between $A2 and $A8 per litre by 2018.
On the surface these figures are concerning, but it must be remembered that the models are based on a number of variables and our fate is not sealed just yet. The 2008 CSIRO Future Fuels Forum paper highlights a number of positive opportunities from the development of alternative fuel sources. A peak oil task force, in addition to highlighting our economic vulnerabilities, shows the way forward on new economic opportunities associated with reconfiguration of energy and transport infrastructure.
We require the development of alternative energy sources such as the use of geothermal power to generate electricity and subsequently hydrogen fuel. We must push forward with alternative fuel sources and focus on the opportunities presented by oil scarcity.
Currently, the Government has stated that it would be wasteful to spend several millions on the formation of a peak oil task force when the New South Wales Government supposedly already has the answers to peak oil. By implication one would assume that the New South Wales’ Government has this peak oil issue all stitched up—it has crunched the numbers, consulted with community and business stakeholders, modelled alternative strategies and forecast sector-by-sector petroleum use and application.
There may have been a time when the undertones of the phrase "peak oil" reverberated as a catalyst for the decline of capitalism and the rise of some sort of popular utopian socialist revolution, but that was 30 years ago and the people of New South Wales want to know how the Government will insulate our economy from the potential economic slowdown at the hands of oil scarcity.
The community deserves forward planning.
While NSW Government does not need to be alarmist in regard to peak oil, what we do need is good governance and strong leadership. However, it is difficult to govern and manage something that is treated as mythology in the State Labour Party policy lexicon. Let us put the peak oil denialism aside and consider what the New South Wales Government is doing to address the challenges posed by the decline of conventional oil resources.
Biofuels - Only a Small part of the solution
The primary solution wheeled out by the Government is the E2, soon to be E4, ethanol blended fuel mandate—even though the process of reviewing the E2 mandate appears to have been conveniently circumvented. The answer to the issue of peak oil, according to the Government, is a blanket volumetric ethanol mandate—a simple equation of more ethanol, less petroleum.There are, however, concerns about ethanol. The Greens are not opposed to ethanol as an alternative fuel but continue to have concerns about Government encouragement of technologically and environmentally redundant production methods. Particular methods of ethanol production fail the multi-dimensional demands of climate change and biodiversity.
I fear that, without the appropriate regulatory boundaries, New South Wales will encourage an ethanol industry based upon cheap environmental shamanism rather than an industry based upon best practice environmental management. A boutique ethanol industry might be one thing, but mandated production increases with no sustainability criteria—similar to that enacted by the New Zealand Parliament recently—will quickly move ethanol production inputs beyond waste feed stocks to whole grains, oil seeds and even soy beans: in other words, food versus fuel.
Some will suggest that the Environmental Planning and Assessment Act provides an adequate forum to consider sustainability issues in ethanol production projects. Requiring a project proponent to simply list an inventory of environmental legislation to which the project would be subject is not sufficient to evaluate the sustainability implications. Sustainability criteria in conjunction with the adoption of the Australian Standard—AS/NZS ISO 14043—for all life cycle assessments will go some way to ensuring ethanol production does not have adverse impacts upon food markets or biodiversity. Without sustainability criteria prescriptions or caveats on ethanol production that divert food stocks away from food supply chains, an E4 mandate may result in unintended policy consequences, as acknowledged by the New South Wales E10 task force.
Introducing an E4 mandate without a sustainability criterion will amount to a nominal response to oil scarcity with the unintended policy prioritisation of private vehicle ownership over the primary sustenance and subsistence requirements of the New South Wales people and our State counterparts that import New South Wales wheat. The plethora of reports into biofuels and ethanol indicate the catchcry of ethanol biofuel as the panacea for peak oil is off target. The CSIRO report for the Rural Industries Research and Development Corporation "Biofuels in Australia—issues and prospects" stated at page 12:
If all of the ethanol capacity that is currently proposed was to be fulfilled by existing crops (principally wheat and sugar), or if a national E10 target were to be met (eg. by 5.5 Mt of wheat as the feedstock), it could force the import of wheat in drought years.
More importantly the report, as is the case with the majority of reports on biofuels, states "biofuels are only a part of the solution to our future transport and energy needs". Certain Government officials have rolled out support of renewable energy targets and the establishment of the Renewable Energy Development Fund under the Climate Change Fund as examples of peak oil response measures.
Counting the Real Costs of Non-Conventional Oil
They have stated the Government is 'helping renewable technologies not yet commercial through the $100 million Renewable Energy Development Fund for pilot and demonstration projects". These projects are only relevant to the debate on peak oil to the extent that they assist and encourage the uptake of alternative fuel technologies that substitute for petroleum, not coal.Further, according to the Department of Environment and Climate Change, the Renewable Energy Development Fund "provides $40 million over five years to support projects which are expected to lead to large scale greenhouse gas emission savings in New South Wales".
On the surface it appears that these programs are established for emission reduction purposes, not as peak oil response measures. If this is the sum total of modelling, analysis and planning that the Government has done on the structural adjustments driven by oil scarcity then the transition away from petroleum to various alternatives is going to be testing at best, cataclysmic at worst.
If the Government could answer the questions posed by peak oil—such as what are the sector-by-sector petroleum fuel based requirements of New South Wales to 2020, or what is the effect of peak oil on food affordability, for example—then its opposition to a peak oil taskforce and its claims that a taskforce is unnecessary would be acceptable.
The fact is that the Government does not have the answers and has not established a whole-of-government approach to prevent peak oil from falling between the departmental gaps. The reality is that the New South Wales Government would much rather intensify petroleum exploration to uncover non-conventional sources and sources located in environmentally sensitive areas to address oil scarcity.
A 60 Minutes report in June this year titled "The New Boom" highlighted the environmental cost of extracting non-conventional oil. It also cast light on the attitude of the petroleum production fraternity that there is a buoyant supply of non-conventional petroleum available to service the growing appetite of rapidly modernising nations. They claim our saviours such as non-conventional bitumen/tar sands in the Athabasca Basin, advancing recovery techniques, enhanced oil recovery [EOR] techniques and application of nanotechnology in petroleum production have the capacity to significantly delay the onset of peak oil.
What they fail to mention is that there is a direct correlation between the difficulty in extracting non-convention oil and environmental damage. Steam assisted gravity drainage [SAGD] extraction techniques use anywhere between two to four barrels of fresh water to extract one barrel of bitumen oil.
There are unproven reserves out there such as the unrecovered light crude in Brazil. There are many examples of unproven reserves with varying degrees of access. The question becomes: What environmental price are we willing to pay to access and extract non-conventional oil?
Do we say that because the market price for oil makes non-conventional and highly environmentally damaging extraction cost-effective and profitable that we should proceed with extraction? This is where it is important that we adequately quantify ecosystem services delivery and conversion of arable land.
The reality is that these measures are tinkering at the edges. To hold up these measures as serious peak oil avoidance pathways is foolish—a brand of denialism on par with the 11 years of the Howard Government's wilful blindness of climate change which will have seismic consequences for this country's long-term global competitiveness.
The approach is short sighted, ignores the issue of intergenerational equity and fails to mitigate CO2 emissions, whereas reducing demand for the resource through a suite of measure is long term, achieves intergenerational justice and mitigates greenhouse gas emissions. It is necessary consider the adequacy of the Government's current response to this natural resource management issue as it has substantial potential to aggravate inequities and societal polarities.
NSW Greens’ Attempt to Mitigate Peak Oil Crisis
Ian Cohen MLC has recently supported a protocol to mitigate the future peak oil crisis by focusing on limiting exploitation of resources and improving alternative fuels and energy options. The Oil Depletion Protocol, which can be accessed at www.oildepletionprotocol.org, requires signatories to commit to an array of principles to protect countries from the negative effects of a globally dwindling oil supply.
The key aspects of the protocol are:
- Every nation shall aim to reduce oil consumption to world depletion rate;
- No country shall produce or import oil above world depletion rate;
- To avoid profiteering from shortages and ensure oil prices remain in reasonable relationship with production cost;
- Allow poor countries to afford their imports;
- Avoid destabilizing financial flows from an increase in oil prices;
- Waste avoidance; and
- Stimulate the development of alternative energies.
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