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Oz & NZ govts suppress official peak oil warnings

Written By: - Date published: 12:40 pm, January 26th, 2012 - 43 comments
Categories: energy - Tags:

Dennis Tegg has a good piece on the release of a secret Australian government report that warns peak oil is upon us:

The Daily Telegraph has revealed how the Australian government has attempted to suppress its own report on peak oil. The response from the New Zealand government had been equally secretive and obfuscating.

The Report by the Australian Bureau of Infrastructure Transport and Regional Economics (BITRE) is called “Transport Energy Futures; long-term oil supply trends and predictions” and can be downloaded as a pdf here

The 470 page report concludes that world oil production will peak in approximately 2016 and then begin to decline for the rest of the century and beyond.

“Given the growth in deep and non-conventional oil balancing the shallow decline in conventional production, it is predicted that we have entered about 2006 onto a slightly upward slanting plateau in potential oil production that will last only to about 2016-eight years from now (2008). [note: conventional oil production peaked in 2006, this report is talking about conventional+unconventional production]

After that, the modelling is forecasting what can be termed ‘the 2017 drop-off’. The outlook under a base case scenario is for a long decline in oil production to begin in 2017, which will stretch to the end of the century and beyond. Projected increases in deep water and non-conventional oil, which are ‘rate-constrained’ in ways that conventional oil is not, will not change this pattern.”

The report has never been published on an Australian Government website (unlike all other BITRE reports), but has now mysteriously appeared on a French website (leaked?) and from there has now gone mainstream.

The New Zealand government approach to peak oil has been equally secretive but much more cunning.

Although the National government received very strong advice from officials in 2009 confirming New Zealand’s high vulnerability to oil shocks, it has decided that the peak oil issue is altogether too sensitive to risk obtaining further advice on. NZ Report here

Better not to ask any questions when you don’t have any answers.

This ostrich approach was confirmed from my official information request in late 2001. The response I received was that no specific advice on the risks and impacts to New Zealand of a potential decline in world oil production had been requested or received since 2008.

What I would now like to know now is, given the high degree of co-operation between officials trans-Tasman, whether New Zealand officials or Ministers received copies of the BITRE report, and if so what was their response to it?

43 comments on “Oz & NZ govts suppress official peak oil warnings ”

  1. Ianupnorth 1

    Read the other day that it is already becoming a crisis; one of the largest refining companies in Europe has filed for bankruptcy, meaning the South East of the UK are already having fuel crises – apparently the ‘mega-refineries’ in South East Asia are making them non-viable.

    Add to that the blockade of the Straits of Hurmuz, the US dollar, etc and I expect it won’t be long before we hit the $3 a litre mark.
    Brace yourself.

    • Lanthanide 1.1

      Not entirely sure what you mean by “the US dollar”.

      If the US$ goes down, the price in oil per US$ goes up. But the NZ$ will also appreciate against the US$ so the change should be minimal.

    • insider 1.2

      SO a big refinery is able to supply product and transport it half a world away cheaper than a local one? Firstly it sounds like you’ve misunderstood what’s going on – it’s almost never cheaper due to scale issues around refined fuel shipping and supply reliability. We can do it to an extent but we are small and can fit into the margins of Asian production. Europe is a much bigger. Secondly it says nothing about fundamental supply of oil but more about declining demand. What you are facing in Europe and the US is peak demand not peak oil.

      • Lanthanide 1.2.1

        I get iffy when people talk about “peak demand”, it’s like they’re knowingly trying to muddy the picture.

        It is possible that the US and Europe have indeed reached peak demand before worldwide supplies have peaked/fallen off the plateau – but only because the price is so high, which is a result of the constrained supply. The US in particular with it’s entrenched car and truck transportation systems would gladly suck up cheaper oil if it were available.

        Anyway, even if they have hit ‘peak demand’ by now, it tends to distort the fact that within a decade the world is highly likely to have significantly less supply than demand, which will also enforce ‘peak demand’ if it hasn’t come about already anyway.

        • insider

          No it’s a well forecast phenomena for the developed world including NZ, based on saturation of volume of vehicles, number of trips, static population and increased efficiency. IF cost were the main limiter in those models, you’d see demand in the developing world be hit far more quickly and significantly just because of the lower incomes they have.

          In thinking about my own travel, I;m not going to go to work more frequently, I’m not going to the shop more, to children’s events, shows and family get togethers more. My demand is essentially at its limit and will decline with better vehicles and increased use of PT.

          • Colonial Viper

            Simply full of bad maths and bad forecast assumptions.

            And it hardly matters anyway, future demand growth is going to come from Tata Nano’s not from the OECD.

            • insider

              It’s already happening in the UK where total fuel use for passenger cars has been dropping for the last 5-6 years and static before that.

          • Lanthanide

            Per capita use of gasoline in the US is significantly higher than it is in Europe, where they have much higher prices which encourages more sensible transportation options and urban development.

            If Europe had as cheap gasoline as the US does, I’m sure we would see much higher per capita use of gasoline in Europe than we do now.

            Urgo, price is the main limiting factor in demand.

            • insider

              No doubt it is important but there is strong evidence that car travel flattened and even declined well before the recent price shocks in a number of developed countries, indicating a price disconnect. Fair to say there is a lot of debate on the matter.

      • Ianupnorth 1.2.2

        Agree, big company with big plant produces more cheaply, but, the refinery in the UK is pretty big and is bust, can’t compete. The holding company has several other large refineries around Europe, hence global production decreases and the price goes up; the rise against the US$ will not compensate the projected $30 per barrel (25%) increase in price that is being predicted, and as we are low on the international buying food chain you can bet we will lose out (again).
        It seems to me that big oil is pulling the strings of supply and demand, which is usually OPEC’s modus operandi.

        • insider

          Refineries tend to operate on margins and throughput efficiencies not on oil cost. Margins are usually a reflection of demand and capacity. That Swiss refiner has the problem of high debt and low margins, and excess capacity in Europe. I don’t think it has anything to do with Chinese super refineries shipping fuel into European markets. It may be that those mega refineries are dragging down margins globally but I’m doubtful as markets tend to be regional.

          Big oil don;t have the market power they once did. They are net oil buyers not sellers and the big four are only about 15% of demand combined.

          • Bored

            Ian/Lanth/Insider, to get a more accurate picture you might start with reading Nicole Foss (Stoneleigh) at the Automaticearth.

            She basically says with supporting evidence that we can no longer pump the quantity what we could 4 years ago, but that price will sway between low and extremely expensive as supply declines, a continuous boom bust cycle. http://theautomaticearth.blogspot.com/2010/05/may-16-2010-oil-credit-and-velocity-of.html Have a read.

            • insider

              Thanks bored. Unfortunately for her production keeps rising. One of the problems Is how you define oil. A bunch of peakies decided that oil was only relatively pump able liquid oils after they kept getting their doom forecasts wrong and so don’t count GTLs, orimulsions and tar sands as real oil. But Oil comes in many forms and the refining process tends to smooth out the differences and engines tend to be non discriminatory as to origins. It’s useful to bear that in mind and think about a broader base of hydrocarbons when considering these imminent collapse type predictions.

              • Bored

                I wager you $100 that oil will be unavailable to you as a motorist in 15 years. Please deliver by bicycle.

                • Bored

                  The prominent scientific journal Nature has just published an article that supports what we in the peak oil world have been saying for years.

                  James Murray of the University of Washington and David King of the University of Oxford say that global oil production peaked in 2005 at about 75 million barrels a day.

                  In fact Insider with mega deflation it might pay you to just deliver the dollars now

                  • insider

                    Nature is a closed site so I can’t see the original. What I don’t get is how they get this number when published production is 89mbpd. There is some discussion of export volumes and stocks. Is this implying 14mbpd are being absorbed in production or is it what i said above – they are focussing on certain oil types?

                    • Bored

                      Theres lies, damned lies and statistics. The difference in numbers could be anywhere. After going through Huppert models, oil company stats, shipping stats from Lloyds etc etc you get to one conclusion: “traditional” oil is in decline. Demand is up and down depending on the state of the world economy so prices are varying and swinging wildly. Consequently at times we can meet demand by literally pumping wildly. Then there is tomorrow…

                      Problem we have is that none of the proposed alternatives are long term, sustainable, viable. We could fuel the world on biofuels and starve. We could frack like crazy and run out of gas to face the same issue. Fun times. I dont particularly like biking up the 1 in 10 hill to my house. Wind, thats a pain.

                • insider

                  I’ll not take that bet because I agree. But then our currency and incomes won’t be the same in 15 years either so $100 has no relevance at all out of context – it’s just a gimmick number

  2. randal 2

    Well I dont really give a stuff.
    it just means that people are going to have to stay home and learn how to do things instead of driving around from a-a all the time and pretending they are free.
    and they are going to have to learn how to be a community instead of being distracted infants with motorised toys.

    • Draco T Bastard 2.1

      and they are going to have to learn how to be a community instead of being distracted infants with motorised toys.


  3. Hammer 3

    Peak Oil
    – another urban myth fired out at regular intervals by the Green Brigade – more code for doom doom doom; we need more taxes to save the world.
    Ever heard of Shale Gas? They’re already working on transforming it into synthetic oil.

    “Peak oil” has been flavour of the year by the Greens for 50+ years. I am still waiting.
    Their socialist agenda is being put back by decades as Shale Gas comes flooding into the picture through-out the world in many non-traditional locations like off shore Israel/Cypress; and Poland.
    Britain has large deposits in Northern England [+ major finds around the Falklands of conventional oil]. That’s why the Greens have taken up an “anti-Fracking” stance.
    It destroys their “end-of-world as we know it” senario.
    NZ has been fracking down in Taranaki for 20+ years.

    OPEC has capped production of traditional oil supplies to slow their loss of influence;
    the USA is now a net exporter of petroleum by-products thanks to shale – for the first time in about 40+ years.

    Sounds like a flood of oil/gas product to me – and the world is loving it.

    • Colonial Viper 3.1

      another urban myth fired out at regular intervals by the Green Brigade – more code for doom doom doom; we need more taxes to save the world.
      Ever heard of Shale Gas? They’re already working on transforming it into synthetic oil.


      Money isn’t going to prevent peak oil (Nature says it occurred in 2005) so how are taxes going to help?

      Shale gas is a rort, production rates from new fields plummet within 2-3 years of volume extraction, its going no where.

      the USA is now a net exporter of petroleum by-products thanks to shale – for the first time in about 40+ years.

      As presented by you this is an outright lie.

      The USA is now a net exporter of refined petroleum products and it is able to do this because of the crude oil imports it heavily relies on.

    • Draco T Bastard 3.2

      Peak Oil
      – another urban myth…

      I didn’t bother reading past there as it’s obvious that you either have NFI WTF you’re talking about or you’re purposefully disbelieving the facts. I suspect it’s the latter as you’ve got the tone of a RWNJ and the reason that RWNJs happen to be a nutjobs is because they disbelieve reality which makes them insane.

      • aerobubble 3.2.1

        Peak Helium, peak coal, peak silicon, peak rare earth elements….

        All real, especially for speculators who love to mis-appropriate the true value up or down to make a wad of cash.

    • Lanthanide 3.3

      Yes, we might convert shale gas into oil. The US in particular is awash in cheap shale gas at the moment.

      Unfortunately the rate at which they will need to produce oil from shale gas to delay the precipitious decline by more than about 5 years amounts to something like 5 million barrels of oil per day.

      And, they need to do it with a sufficiently high EROEI for it to really make any dent in oil demand/consumption at all. All that neutral or energy negative ethanol that gets included in Total Liquids doesn’t really do a lot to help our society except make a few farmers quite wealthy (the whole thing is a massive rort perpetrated by politicians and mega-industrial farmers, in the US at least).

      I’ve probably gotten way too technical for you, though. Best you do some background reading and clue yourself up; I don’t have the time or inclination to babysit you.

      • insider 3.3.1

        or it could substitute for oil in power and heating. The US uses a lot in those areas.

        • Lanthanide

          Actually there aren’t very many oil power plants at all because it’s not as cost efficient as coal or gas. There are already many gas power plants. So they’re not going to reduce their oil consumption for power generation very much, simply because there isn’t much left.

          As for heating, again a lot of heating is done using gas already. There are a lot of kerosene and ‘heating oil’ fuelled furnaces, though. So yes, they could substitute those fuel types for the liquefied natural gas.

          But it’s all just merry-go-rounds: unless this substitution is on the order of 5mb+ per day, it won’t be enough to significantly delay the precipitous decline. It doesn’t matter whether that substitution is in the form of gasoline going into cars or fuel going into furnaces; that’s what the All Liquids number means.

          • aerobubble

            If car usage is too be sustained then surely new hydrogen carbon sources would quickly gain in price, and giving it must take time to turn gas to oil, find and expolit deposits etc then guessing its not going to be much of a talking point for long.

            The question for me is when will the private motor finally get priced off the roads, because all that extra hyrogencarbon is just going up in smoke into private cars (if not in the US and EU but then in China).

            And we know why governments globally are putting pressure on the MSM to not cover peak oil, its because the ramifications are huge.

    • Bored 3.4

      Jeez, heard it all now. Going by Hammers logic drinking a glass of water past half full is not possible, only socialists and greenies believe the glass can ever be emptied. Some sort of Hammer metaphysics transcends reality to ascribe physical realities to politics.

    • exitlane 3.5

      all those socialist greenies you mean like the IMF, US and German military, IEA, Lloyds of London, Chatham House NZ Parliamentary Library Research unit, the Oz report referred to and scores of others many from Conservative Energy think tanks ….which taking into shale and all other unconventional sources, all point to an oil supply crunch in the next few years?

  4. Hammer 4

    Good morning Viper – hows your oil?
    Re: USA production:
    From Bob Evans @ Forbes
    “While the United States is still far from even approaching energy independence, the country appears to be taking a huge step in that direction as 2012 will mark the first time in 62 years that the U.S. has exported more oil-based fuels than it has imported.”


    Have a nice day.

    • Lanthanide 4.1

      It seems you didn’t actually understand what CV said at all. The very thing you linked to says this in the second paragraph:

      “While the U.S. continues to import huge volumes of oil, the country has become a significant global player in the export of petroleum-based products such as diesel, heating oil, gasoline, and kerosene.”

      That’s exactly what CV said. I’m sure he’s thankful that you’re doing his legwork for him, though.

      • Colonial Viper 4.1.1

        Exactly, thanks Lanth.

        The US is exporting refined products but remains a net importer of the raw material: crude oil.

        Cut the crude oil imports and US exports of refined products immediately collapse. Both hammer, Bob Evans and Forbes are helping to maintain the rather superficial shell (hahaha) game in play.

        Oh and one more thing. US refineries are cranking up because of the low quality of oil on the market now. Many more cheaply built refineries can only handle premium light sweet crude. This light sweet crude is running out and there is now more of the heavier, sour classes of oil around.

        Many US refineries can process this type of oil, whereas there is a shortage of similar refinery capacity around the world.

    • exitlane 4.2

      The recent boost in production has come in part because of a boom in shale oil production, especially in North Dakota. But even if shale oil production continues growing at a fast clip, U.S. production is likely to increase only a bit over the next few years, and then flatline from there, according to 2011 projections by the U.S. Energy Information Administration. More recent projections released this week foresee U.S. crude oil production going up to 6.7 million barrels a day by 2020, and then declining again, back to about 6.1 million barrels a day by 2035. 

      Hardly the energy independence you are touting

  5. randal 5

    refining shale gas is going to completely wreck the atmosphere so as to make the planet totally uninhabitable.
    just remember that there is plenty of stone left after the stone age.
    (plenty of neanderthals tooo!)

    • Colonial Viper 5.1

      My personal hope is that we are able to maintain a 1940’s and 1950’s lifestyle (with specific technical advancements) here in NZ, for the long term.

      • uroskin 5.1.1

        “1940′s and 1950′s lifestyle”
        6 o’clock closing? No wine in restaurants or margarine at home? Steam-driven i-Pads? No mixed flatting or sex before marriage? John Banks re-opening the family business of providing backstreet abortions? Black budgets and waterfront strike breaking cossacks?

      • Hammer 5.1.2

        That is hilarious;
        That will keep me chuckling all day – and I hope you enjoy it too.

  6. Hammer 6

    Hello Viper
    Still searching for the on button for 1940’s Black & White TV?
    We hope you find it; hope the programs are riveting.

    Nighty night.

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