Written By: - Date published: 12:55 pm, June 25th, 2008 - 60 comments
Categories: economy -
Tags: peak oil, petrol price, roading
Petrol is over $2.10 a litre. The price will keep rising both with the ever upward march of the price of crude and the falling NZ dollar. Already, motorists are responding. Road usage in Auckland has fallen 3%. It’s fair to believe it is falling elsewhere too. The only reasonable conclusion is that the number of vehicles on the road will keep edging down as the price of petrol continues to rise.
So, why the hell are we spending $3 billion on two huge new motorway projects? The Waterview Tunnel in Auckland and Transmission Gully in Wellington add capacity to the existing network even as capacity demand is falling. That’s insane.
Yes, there is still congestion on the motorways out of the cities. But the solution is to take more cars off the road. Imagine if we put that $3 billion into public transport instead we could build a world-leading transport infrastructure with numerous small, comfortable, quick buses and faster, electrified trains.
Both major parties are stuck in a past of cheap oil. Those days are not coming back; it’s time we had a transport plan for the future.
[PS. before the Righties get all excited - no, this $3 billion couldn't pay for National's tax cuts. A motorway is built once, tax cuts are forever.]
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“So long as you pay ALL the costs, including what would usually be externalities (noise pollution etc), and the road builder is prepared to accept all the risk (rather than get a govt guarantee in case of low use) then go for it.”
I think that is a fair enough requirement for private roads.. so would you agree with getting rid of the parts of the RMA which make it nigh on impossible to do this?
Don’t know enough about the relevant bits of the RMA to comment sorry, but generally the RMA seems to have delivered pretty good results in terms of consultation with affected parties etc.
I guess you’re talking about compulsory acquisition. I’m not sure. I don’t fully agree with Lynn, because that’s placing a pretty unfair burden on privately owned infrastructure that’s not faced by public development, but on the other hand public infrastructure development has different motivation.
T: I think that the original comment said something about the private roads being for private road users – ie not for the common interest.
Yep MikeE said
If that is the case, then it should be carried all of the way on a private basis. That would include having to purchase all of the land that the roads were on. If you dig back into the history of roading, I seem to remember that was why private roading became uneconomic a very long time ago.
RW: Yep and that is why it is unlikely to become economic on any sort of scale at anything like the current prices for motor vehicle fractions.
I’m not up to date with modern refining and cracking. But just doing some rough figuring out what the energy budget is for that kind of operation scares me. Doesn’t anyone learn any basic science these days. The reporter in your links certainly seemed a bit clueless. My guess is that at present they’re selling it as bitumen – you notice that the reporter didn’t say what they are marketing? It’d probably be good for plastics because those processes often use the higher carbon structures.
If they stop at heating/bunker oil it is probably sort of economic at some point. The yield would be low but the energy budget might work and they’d be able to use the waste for roading.
If they continue to cracking to get the lighter fractions for motor fuels, then they’re better hope that oil prices hit the roof. The stuff STARTS as bitumen which is the bottom end waste from most refineries – the yield would be crap with any known tech. I’d suspect that almost any other known technology would be economic before then.
Hell – I suspect that growing whole forests for charcoal based engines would be more economic. I haven’t even looked at the environmental effects.
Lynn, economically it’s viable at the current price. Amortizing plant costs over long term and improving processes are expected to deliver $30-$40/barrel for petroleum.
Environmentally it’s a total mess – terrible solution.
I wouldn’t invest in it. $40/barrel is still expensive as an energy source, electric replacements are going to beat 8 kinds of hell out of it. Demand will slump, and the plants will go back to sitting idle, just like after the last oil spike.
On roads – Fair enough, but regardless of who’s funding it (private or public) it still ends up being for the interests of most at the cost of some.
Making private enterprise face a cost which is just swept aside as “for the greater good” when a public entity does it seems unreasonable.
I watched that doco as well – it wasn’t pretty. They talked about it as a great option for Austrialia (which has the equivalent, but trapped in rock, not sand, which must be even less economic), but I noticed no one gave figures as to how much water the process requires – not such a problem in Alberta, teeny, slight problem in Australia, apparently.
As Rex said – they did mention ‘lots of water’. Imagine if you live with Queensland’s Grade 5 restrictions, and have 125 l of water a day (wash some clothes, flush the bog twice, cook dinner and do the dishes and you might squeak in with a 2 minute shower) to live on. Now imagine you need ten times that to make a barrel of oil. Sell that if you can.
Problematic.
T-rex – you said $40/barrel as a source, what do you mean by that? pre- or post-refining? How is that comparable to traditional oil sources (i.e. the wet stuff in the ground)?
Rex W – that was on over here too on our 60 mins, in case you’re wondering. I’d heard about tar sands, was interesting to see them in a bit more detail.
I’m not an expert – I did a brief study on it about a year back, sufficient to lable it a seriously weak solution compared to alternatives, didn’t look into it any further. I imagine the optimistic $30/$40 per barrel is assuming no limitations on other resources.
More details are here. It’s a fossil fuel lobby device IMNSHO, “Hey, keep buying petrol cars, there’s plenty left”. If it replaces petrol in widespread use then it will be one of the biggest signs yet that we, as a species, are f*cking useless.
Check out, in particular, the EROI.
It is the single most inefficient and polluting way I can imagine of getting cars around. I would support electricity from coal over oil from oilshale by a LONG margin.
Our June Oil Production Briefing Paper is out now. We look at why Saudi Arabia won’t be able to overcome its own internal demand, and also the myth that speculators are driving up the price of oil.
http://www.bettertransport.org.nz/news/134/53.htm
It is also worth noting there has been a 6% decrease in traffic volumes for the northern motorway in Auckland, where the new Northern busway runs along side. Conversely there was a 6% increase in traffic on the Manukau Harbour Crossing, where there is no effective rapid transit. I don’t think this is a coincidence.
Rex:
“Australia’s 60 minutes had an item on this recently (link to video and transcript – ironically an ad for a car pops out of the same webpage!)”
That’s all well and good rex, but you’re talking two barrels of sludgy toxic waste for every barrel produced and nearly twice as much carbon per unit of energy produced. With demand for liquid fuel projected to near double in the next 30 years you’re talking environmental melt-down.
Also, the energy required carry out the process is massive, and involves mainly natural gas, which is set to peak a decade or so after oil. To get around this people in the industry have been talking about constructing nuclear power plants expressly for the purpose of replacing the gas. Surely it would just be cheaper and more environmentally friendly to go the nuclear-powered, electric car route?
Why the hell is is $2.00 plus per litre? Because the filth merchants in the present government thieve petrol taxes and GST from consumers. That’s why!
Yes, non-road users should pay for roading, that’s only fair.
SS – back to your sandbox, child, you’re not worthy.
In credit though, you didn’t mess up your spelling or grammar, apart from the second “is”, where there should be an “it”. Well done on the apostrophe use, not everyone can get that right. Proper NZ spelling on “litre” too, and you got “thieve” correct – ‘i’ before ‘e’. So you’re not totally useless.
I’d have used a hyphen for the “that’s why?” sentence but that’s more aesthetics, though it is a fragment in essence.
Now try to put the effort given to your technical writing into some critical thought.
Thank you Stephen, for quoting the Dom Post and my blog. I would love to croak that the Dom Post got the chart you quote from me. Then I had to explain it to them. :-0
Anyone who thinks that pushing 2 tonnes of steel down to the dairy and back to pick up 1 kilogram of milk has a future is deluding themselves. Personal transport as we know it is history. Oil is the most energy dense, easily worked energy sources we have, and we are pissing it away doing useless work.
“Personal transport as we know it is history”
Could you qualify that please? I’ve had a similar argument with rogernome. I agree that the scenario you describe above is history (2tons for 1kg), but personal transport is a very broad term…
And I’d actually argue that oil is a pretty crap energy source. We just happened to have developed a dependence on it rather than something else. That’ll change in time… probably not very much of it either!
I’d expect oil to be essentially unused (as an energy source anyway) in 30 years, but energy to be more available than ever.
Gosh Mr Pilott you ARE erudite. I bet you have a degree…my pick is a very routine BA which undoubtedly suits your employment and qualifies you for little else!
The petrol tax imposed by the government was the intended focus of my contribution but I now perceive that ad-hominem peripheral nit-picking is your forte. Good luck to you.
Please direct me to a blogg which caters for those of us who can acutely ponder issues rather than being a theatre for your school-teacher type rantings.
SS: From the juvie sarcasm (and lousy spelling). You look like a good candidate for Cline Heine et al or possibly WhaleOil. Look under Right blogs on the left. Just my opinion of course.
Lynn
Which petrol tax? There has been no increase in the excise (beyond CPI) in years, GST is the same, and the reigonal fuel taxes are not yet in place, if they coem in at all.
In fact, the Govt’s revenue is dropping because of high petrol prices. Less petrol is consumed meaning less excise is gathered (it’s charged per litre, not on price) and the GST from extra spending on petrol comes at the cost of GST not being gathered from spending on other things.
And don’t forget, police cars, ambulances, army vehicles, they all run on petrol or diesel too. Higher prices hit the govt and cut it’s revenue.
SS, sorry, I didn’t think it was meant to be a serious comment or one that had a valid ‘focus’ as such.
Don’t worry, the language debate is always a second to the politics, since I didn’t think you had much to contribute by way of political discussion I thought I’d resort to the grammar.
A BA (or any other non-vocational degree) can get you into all types of gainful employment. Don’t take my word for it though, by all means.
Sheik – What’s your problem with petrol taxes? Their level (which, as Steve points out, hasn’t changed – and in fact has reduced as far as total revenue is concerned) or the fact that they’re charged at all? How do you think roads should be funded?
As of early this year(?) all funds collected through excise tax on petrol even go into land transport projects.
What’s your beef? That roads should be free?
T-Rex,
I can’t speak for frog, but it’s worth noting he/she/it said “…personal transport as we know it is history”. Not personal transport per se, but rather the way we currently transport ourselves. I’m not certain of your discussions with roger nome, but I think you’d agree with that.
I think the future is going to see a lot more walking and cyclying, more use of public transport, and the slowly decling use of personal vehicles for ‘special’ trips only. The distance and terrain types that people consider to be walkable will increase greatly, and we’ll become a lot smarter about combining trips. Earlier generations coped without cars, and while they did live in smaller, denser communities, they made things work. Or rather, things worked because they did live in smaller, denser communities.
The problem of course will be in the transition from our current system of personal transport, to the future, low-energy one. People’s expectations are going to have to be severely altered, and this won’t be a pretty process. I almost pity the next party in government, because they’ll cop it in the neck. Also, a lot of people with very expensive properties miles away from anywhere useful are going to find themselves with something they can’t use and can’t sell. It’s happening already in the States (exurbs are the hardest hit by the real estate crash).
So I think frog is right; personal transport, as we know it, is history.
Sheik Senseless,
the excise tax was put in place by the National Party in the early 1950s, so they could scrap the Labour Governmet’s plans to build first-class electric rail infrastructure in Auckland, and fund their new highways.
Are you saying we should reverse that? i.e. cut the tax on petrol, stop spending so much on roads and start investing more in pubic transport? If so, I can only offer you my whole hearted agreement!
Tane W –
T-Rex thinks that electricity will take the place of oil. This would entail growing electricity generation at a rate of 10% per year for the next 30 years. He says Solar and wind can do it. Sorry Rex, but that’s head in the clouds stuff.
Liquid Energy prices may indeed fall again for different reasons.
The high price of oil has led to people innovating; and if they can make a bug which can take any organic waste, and turn it into crude oil – that’s sustainable oil at $50/bbl. It was never worthwhile researching with oil at $10/bbl, $20/bbl etc – as well as the difficulty in genetic engineering etc. But now, the economics are different and making bacteria with specialised ribosomes to perform bespoke chemical reactions is not science fiction.
Let’s just hope that modified E.Coli doesn’t make it out into the wild – I bet soil laced with long-chain hydrocarbons would be microbially antisocial, to put it mildly. But what a risk in terms of patent law – one leaked bacterium could mean a market awash with back-yard oil producers. After all, individuals aren’t subject to being told they can’t use a patented invention they’ve “built” themselves.
Roger – I think electricity in combination with new vehicles can replace oil in functionality. There’s no need to replace the energy equivalent. As I described in my last post under “ambitious for big oil” – linked to in my response to you above.
We could supply energy for the majority of personal transport requirements in NZ by increasing our existing WIND generation by about 25%. A breeze – if you’ll pardon the expression.
So in conclusion, I think personal transport will be more widespread than ever. Just different… and a lot better.
At any rate, I don’t think we’ll need new roads. Just maintain the existing ones. So add my vote to upgrading the rail network.
SP, Which petrol tax? I think he meant the one appropriated by the Finance Act each year rather than the one appropriated by sole authority of the Land Transport Management Act. The latter one has been increased twice in recent years, unless your definition of recent years is “less than two years”.
Roger. Since the “user pays” motor spirits excise duty was introduced in 1927.
http://www.petroltax.org.nz/documents_1918-1953.html
I can only assume your refence to a 1950′s National government is actually referring to that government’s response to the Roading Invesigation Committee’s report. The truth (according to Mr Goosman) can be found here:
http://www.petroltax.org.nz/documents_1954-1999.html
If the Labour Governmet’s had plans to build first-class electric rail infrastructure in Auckland then why didn’t they include that infrastructure in the regional public works plan published in the appendices to the Parliamentary Journal in 1947?
http://www.petroltax.org.nz/images/AK-1947.jpg