Port Phillip Report Final 12.01.12

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Peak OilWorkshopCity o Port Phillip9th December 2011

Prepared by the Institute or Sensible Transport


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This report was commissioned by the City o PortPhillip and prepared by Elliot Fishman and Phil Hart

(Institute or Sensible Transport).

Contact

Elliot Fishman

T: +61 3 9489 7307

E: [email protected]

www.sensibletransport.org.au

PO Box 273 Faireld VIC Australia, 3078.

Design and Layout by Merry Creative


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Contents

1. About this report 01

2. Peak oil and why its important for local government 02

3. Workshop presentations and activities 03

4. Key workshop questions 04

4.1 Whats the City of Port Phillip already doing to

reduce oil dependency? 04

4.2 CEO Challenge How would you reduce Counciloil use by 25% by 2020 if you were the CEO? 07

5. Conclusion and next steps 08

6. Appendix One Snapshot of government reports on peak oil 09

7. Appendix Two Introduction to Peak Oil by Phil Hart

(PowerPoint Slides) 10


4/27Peak Oil Workshop City o Port Phillip. Prepared by the Institute or Sensible Transport1

About this report

In mid 2011, the City o Port Phillip committed to hold a Peak Oil Workshop, which took place in December 2011. The

workshops aim was to improve Councils understanding o oil depletion and what it means or local government. This

report is designed to capture the key messages that emerged rom the hal-day workshop.

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Port Phillip staf during the Peak Oil Workshop


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Peak oil and why its important for local government

The worlds oil resources are nite and the greatest share o those resources were discovered in the United States

and the Middle East as long ago as the 1930s and 1940s. Oil is a antastically rich and convenient source o energy,

and it is no surprise that we have become addicted to it. But in contrast to our growing demand, worldwide

discovery o oil peaked in 1964 and has been on a declining trend ever since.

For the engineers in the industry, applying available technology and expanding exploration into new rontiers, the

work remains challenging and rewarding. But or more than two decades, the industry has discovered less oil than

the world economy has demanded and we now consume ve barrels or every one discovered.

While we are not running out, supply o oil cannot grow orever. Production o this nite resource must at some

time peak and begin a long decline. We already depend on 120 o the largest elds or hal the worlds oil supply.

Almost all o these elds are mature and production rom many is in decline. The smaller and more challenging oilelds available to the industry today cannot make up or the decline in these giant oil elds. In the words o one oil

company executive, peak oil is either here or very close.

A report rom the UK Industry Taskforce on Peak Oil &

Energy Security sends a clear message:

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Peak Oil Workshop City o Port Phillip. Prepared by the Institute or Sensible Transport2

As we reach maximum oil extraction rates, the era

o cheap oil is behind us. We must plan or a world

in which oil prices are likely to be both higher and

more volatile and where oil price shocks have the

potential to destabilise economic, political and

social activity.

There are two challenges or government and

policy-makers. Firstly, to recognise the situation we

ace, and secondly to take action to mitigate the

worst implications o the crunch.

Our message to government and businesses is

clear. Act now.

Richard Branson, Founder, Virgin Group

Ian Marchant, CEO, Scottish & Southern Energy

Brian Souter, CEO, Stagecoach Group

Philip Dilley, Chairman, Arup

Jeremy Leggett, Chairman, Solarcentury


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Workshop presentations and activities

The workshop involved a combination o presentations on peak oil and group activities, designed to gauge the

thoughts o Council sta on what oil depletion means or the City o Port Phillip.

The workshop presentations started with an introduction to peak oil by Phil Hart (see Appendix 2 or PowerPoint

slides), who ormerly worked in the North Sea oil and gas industry. This presentation was ollowed by an

opportunity or questions and discussion. Elliot Fishman then presented on oil consumption and vulnerabilities

across various local government areas, such as waste management, meals on wheels and inrastructure planning.

Phil Hart discussing peak oil with Port Phillip staf


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Council staf recording their thoughts on initiatives to mitigate the impact o peak oil on Council business

The City o Port Phillip has begun the policy work to help Council and community reduce their oil consumption.

The ollowing documents provide a brie snapshot o recent work to help reduce emissions, congestion and

increase the role walking and cycling can play to meet local transport needs.


Word Cloud: Top 90 most common words used by staf on what Council is already doing to address oil dependency.


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City of Port Phillip

Bike Plan 20112020Pedal Power: Making bike riding better


Walk Plan 20112020Feet First: Making pedestrians the priority

Take Local Action: Be Part of the Solution

GREENHOUSE PLAN

LOW CARBON CITY


Sustainable Transport StrategyA Connected and Liveable City

City o Port Phillip strategies supportive o a low carbon uture.


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4.2 CEO Challenge How would you reduce Council oil use by 25% by 2020 if

you were the CEO?

Sta were asked to imagine they were CEO and given the task o reducing the City o Port Phillips oil consumption

by 25% by 2020 (at an organisational rather than community level). Ideas were generated individually at rst and

then rened in small work groups. Through an inormal voting exercise, participants indicated which o the ideas

they elt would provide the most eective means o reducing Councils uel consumption. We have summarised

this eedback by rating the selected ideas as high, medium or low eectiveness in the table below.

Initiative

Improve technology: Communication, teleconerencing & work rom home High

Charge or waste by weight: reducing service, encourage composting High

Reduce Council vehicle eet High

Reduce over-servicing, e.g. street/beach cleaning High

Fuel switching to biouels rom waste products & hydrogen buses Medium

Parking/trafc restrictions to increase the efciency o service delivery vehicles Medium

Education/travel behaviour change Medium

Include oil consumption in key selection criteria or Council contracts Medium

Improving cycle acilities and increase bicycle eet Low

Annual public transport tickets or sta Low

Electric vehicle eet or community care Low

Initiative Rating


Proposed initiatives by staf to reduce oil dependency across Council business


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Conclusion and next steps

Peak oil is a critical risk management issue or local government. Rising demand or oil and serious supply

limitations present a signicant threat to business continuity and service delivery. Waste management, meals on

wheels and road maintenance are just a ew o the responsibilities local governments are expected to carry out

every day; and each are highly dependent on oil and petroleum products. The City o Port Phillip is vulnerable to

the threats posed by peak oil and this workshop has provided an opportunity or Council sta to explore what it

means or them and what can be done to increase resilience.

This workshop has outlined the key principles o peak oil and oil vulnerability planning. Council sta have been

able to articulate what the City o Port Phillip is currently doing in other policy areas which may strengthen

Councils position in the likely event o volatile oil prices. The workshop has also generated some preliminary ideas

about how service delivery could be adapted to a uture o constrained oil supply and rising or volatile oil prices.

This should be seen as the start o Councils journey towards developing a service delivery model that is more

robustly positioned or a uture o declining oil supply.

To enhance Councils preparedness or a uture o volatile oil prices, a comprehensive audit o current oil

consumption should take place. This, along with the above workshop outcomes can act as the basis or a strategic

assessment o the vulnerabilities aced by Port Phillip, across Councils service areas, to uctuating oil prices. By

working with service area teams, Council can look or opportunities to reduce uel consumption and strengthen

business continuity, using a risk management approach.

In addition to the risks peak oil poses to business continuity or Council, peak oil is a signicant threat to the

community. Council should investigate peak oil vulnerabilities and mitigation options or the general public living,

working or studying in the City o Port Phillip.


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Appendix One Snapshot of government reports on peak oil

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Appendix Two Introduction to Peak Oil by Phil Hart(PowerPoint Slides)

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Peak Oil: A Change in DirectionPhil Hart


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1 Litre Petrol = 10kWh

EnergySolar Panels = 5 kWh/Day

Three months to fill your tank


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14 giant

fields

100 large

fields

4000

smaller

fields

20%

30%50%

We depend on production from old giant oil fields

GhawarSaudi Arabia

7% of the world's crude oil

supply from one giant field

5 million barrels of oil per day

260km long


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Euan Mearns 2007Ghawar Base Caseeurope.theoildrum.com

Impact of Technology?

Spindletop, East Texas

10th January 1901

Well Depth 1,139 ft (347 m)

100,000 barrels per day

United States

Average Oil Well 2008

10 barrels per day

BP 'Tiber' Deepwater Gulf of Mexico

Well Depth 35,000 ft (10,500 m)

Water Depth 4,000 ft (1200 m)Cost > $200 million per well


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Unconventional oil is.. unconventional

Each barrel of oil requires two to fivebarrels of water, carves up four tons ofearth, uses enough natural gas to heata home for one to five days, and addsto the greenhouse gases slowlycooking the planet, according to theindustry's own calculations.

- Washington Post

Spindletop Energy Return >100:1

Tar Sands Energy Return ~3:1

Biofuels Energy Return ~2:1

Technology at Work


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What do the Oil Companies Say?

Christophe de Margerie

CEO TOTAL

- The world will never be able to produce more than89 million barrels a day of oil.

Financial Times, 16th February 2009

Dr Jim Buckee

retired CEO Talisman Energy

- "It's obviously unsustainable and the world isincreasingly drawing on the bigger, older fields.

- You couple that notion with the irreversibility ofdecline and you've got a very alarming picture."

- Peak oil is either here, or very close. ABC News, 30th January 2008

IEA World Energy Outlook 2004


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Peak Oil in a Nutshell

Existing Reserves

OPEC Reserves 'overstated'

OPEC can't produce 'as much as we need' forever

Middle East oil province - thoroughly explored and developed (except Iraq)

Future Discoveries

Rate of Oil Discoveries peaked in 1960's

Geology of major world oil provinces well understood

No new 'Middle East' waiting to be found

Technology & 'Reserves Growth'

Application of 'technology' has been a reality for twenty years

Easy gains have already been achieved Increasing recovery limited by decreasing energy returns

- ..but oil is not 'Running Out' either!


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Peak Oil and Climate Change


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Meet TREV: Two-seater Renewable Energy Vehicle

Weight: 300 kgTop speed: 120 km/hRange: 150 km

Two comfortable seatsSpace for two bagsEnergy-efficient tyres, brakes andsuspensionComplies with road safety

regulations

Uses less than 1/5th of the energy required by a conventional sized car.

Peak Oil & Local Government

Elliot Fishman

[email protected]

Phil Hart

[email protected]


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Handil Oil Field, Indonesia

SPE, Journal of Petroleum Technology (Jan 2008)

12,500 b/d in 2003 to 23,000 b/d in 2007

Biofuels

IEA 2009: Despite the recent downturn, world use of biofuels is projected to recover in the longerterm, reaching 1.6 mb/d in 2015 and 2.7 mb/d in 2030 ~ 2.5% of total liquids production


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The hike in OPEC countries estimates of their reserves was driven by negotiations at that

time over production quotas, and had little to do with the actual discovery of new reserves.


World Oil Use

Transport 61% Petrol, Diesel,Aviation Fuel

Heating / PowerGeneration /

Industrial

~28% Heating Oil &Diesel

Generators

PetrochemicalFeedstocks

~7% PlasticsAgriculture

Pharmaceuticals

Asphalt / Tar ~3% Road Surfacing

Lubricants


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Oil dependencies for local government

Council Fuel UseOil dependencies for local government


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CEO Challenge

ImaginethatYOUare

theCEOofCityofPort

Phillip.

Whatideaswouldyouimplementtoreduce

oiluseby25%by

2020?

CEO Challenge

WhatifyouwereKay

Rundle?

Whatideaswouldyou

implementtoreduce

oiluseby25%by

2020?


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CEO Challenge

WhatifyouwereTim

Costello?

Whatideaswouldyou

implementtoreduceoiluseby25%by

2020?

Peak Oil & Local Government

Elliot Fishman

[email protected]

Phil Hart

[email protected]

Documents

Port Phillip Report Final 12.01.12