by frog
Rumours of a dress rehearsal for an Israeli strike against Iran and European cash rate rises have been blamed for yesterday’s new record oil price. (US$145.85) However, the International Energy Agency’s (IEA) statements earlier on Tuesday are the real peak oil news of the week and underpin the growing consensus that oil prices are not likely to go down – ever.
Speaking at a press conference at the World Petroleum Congress, Mr. Tanaka emphasized that market fundamentals were the main underlying factor behind high oil prices. “OPEC production is at record highs and non-OPEC producers are working at full throttle, but stocks show no unusual build. These factors demonstrate that it is mainly fundamentals pushing up the price,? he added.
Project delays averaging 12 months, coupled with global average decline of 5.2% – up from 4% last year – are the factors behind these revisions. Over 3.5 mb/d of new production will be needed each year just to hold global production steady.
“We continue to see a significant shift in demand away from the OECD countries,? Mr. Tanaka noted. “Developing countries will drive demand growth, their total consumption equalling that of mature economies by 2015.? Asia, the Middle East and Latin America will account for nearly 90% of demand growth over the five-year forecast period.
In other words, in seven years, we rich countries will no longer dominate the oil market. Despite revising demand growth down significantly due to the high prices and looming global recession, the IEA is still bullish on demand, primarily from Asia. A very informative IEA presentation at the Congress makes for good reading.
Now that the international oil watchdog has finally admitted that there is a significant problem in meeting future demand, isn’t it high time we started investing in alternatives to the motorcar, our thirstiest oil consumer?
on the trolls and those who are unable to keep on topic
>>alternatives to the motorcar
Already here, Frog. The motor car no longer requires oil to run.
Next….
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And when are we going to be able to buy one of those again..?
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I do not know where you get your statistics.
The private motor vehicle fleet consumes only 8.5% of our fossil fuel in NZ.
Similarly, coming from the other end, the report Consuming Australia found that the contribution of all transport to the average Australian household’s carbon footprint is 10.5%. This includes buses and trains – the car is about 9%.
Food accounts for 30% of the households carbon footprint. Better to put everyone on weight watchers!
I do not know why everyone focuses on the private motor car which is after all the most efficient and effective means of transport ever invented and which contributes so much to human mobility, autonomy and freedom.
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Owen,
People focus on the private motor car because it will become economically unviable quite soon. better to plan ahead.
When you say the most efficient, do you mean energy efficient, or economically efficient? The first is plain wrong and the second is only true temporarily.
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>>And when are we going to be able to buy one
2009-10.
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>>it will become economically unviable quite soon
Total nonsense. In fact, they are becoming more viable. For example, the Tesla does 256mpg equivalent, running entirely on electricity.
Call us when you wake up, greenies…..
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09-10 in NZ?! Even so, supply aint going to achieve any sort of equillibrium with demand any time soon. Owen has a point about food/agriculture too – i’m slightly curious about the situation re: petroleum based fertilisers, and how much it is going to cost to truck food into the cities – don’t see an electric motor on those coming any time soon.
Which tesla?
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Stephen, the problem does not need solving next month.
Most car companies are releasing energy efficient/alt fuel models as soon as next year. If petrol drops in price, then the problem solves itself. If petrol remains expensive, we’ll see the production of alt-energy cars ramp up fast, and prices fall.
Market forces, working as they should.
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BluePeter,
having given us “the short answer” …
As an observer of attitudes and behaviour, I’d be fascinated like to read YOUR interpretation of the “Next…” part of this scenario,
(ie the part that takes us and the rest of the World from here to there.)
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Peak oil is here, and it means private motor vehicles will become a rare luxury. The end of cheap oil will mean much higher prices for electricity and all forms of energy as substitution effects take hold (as they already are.) They will mean much higher prices for food and industrial production.
Cars are already unaffordable for a section of NZ society, those with low incomes. This will become a reality for more and more people as prices rise. Soon only the wealthy will be able to afford car ownership.
With peak oil, we will be reducing our fossil fuel use. As a relatively wealthy country, perhaps we can afford for a while to pay higher prices and maintain our consumption at the expense of consumption in poorer countries – which probably means mass starvation.
Perhaps also wealthier individuals within NZ can keep up their consumption for a while by paying the higher prices, at the expense of the growing number of poor people who will not be able to afford car ownership.
Why the focus on cars? Because faced with stretched household budgets I would expect food to be a priority over petrol. People will quit jobs and walk to school when it is too expensive to drive the car.
If the government had seriously put the effort into improving public transport as the greens have been calling for, we would be in a much better position right now. As it is there will be a huge amount of pain as the private car era comes to a crashing halt.
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Owen, the post is about oil, not fossel fuel use, are you being deliberately misleading? What % of our oil consumption is used by private motor vehicles?
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IF we depend on public transport as a substitute for current travel modes the result is a massive drop in productivity and personal wealth.
Access to the job market crashes – from both ends.
The whole of day fuel efficiency of the modern car is slightly superior to the whole of day efficiency of buses and hugely superior to the whole of day efficiency of trains.
The car is more economically efficient by far because the trip times are so much shorter except for the small minority of people who live next door to a transport node and also work next door to a transport node.
Women appreciate the flexibility of the car more than men because they are required to by multi taskers. How do you use public transport to take you to school and then to work and then to the shops and then to see grannie and then back to the school and then to the community meeting etc etc etc.
IF need be, we shall electrify the car fleet (with batteries or superconductors) and power them with nuclear power or from trickle charging windmills and solar sources on the roof – and they will then be cheaper than present cars.
For most of human history people have enjoyed private point to point transport – it was just that horses, camels, donkeys, mules etc were expensive and consumed more food than the owners. IN cities they caused massive pollution.
The car made private point to point transport more accessible to ordinary people and released hugh amounts of food for human consumption.
We will not go back to the high density low mobility combination of large cities and fixed line transport. Of course public transport will survive as taxis, buses of all sizes and planes. Auckland taxis carry about 20,000,000 rides a year.
How can you provide public transport to satisfy the needs of the millions of people who live outside of the main centres. How does public transport replace the tractor and all the commercial vehicles?
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>>Peak oil is here, and it means private motor vehicles will become a rare luxury.
Nonsense. You don’t need to power a car with oil, so your argument falls over in your first sentence.
>>The end of cheap oil will mean much higher prices for electricity
Only if output remains the same. You might not want increased electricity output, at a reasonable price, but we do, and we’ll win. Kiss goodbye to your RMA objections for new generation projects.
>>As it is there will be a huge amount of pain as the private car era comes to a crashing halt.
As I’ve stated, we’ve already solved the problem. If you choose to ignore it, then you’ll be increasingly marginalised and out of parliament altogether.
>>the part that takes us and the rest of the World from here to there.
We increase electricity production.
The technology exists. Even Mike Moore knows this problem is not difficult to solve. As sectors of oil use, such as cars, move to alternatives, the price of oil will drop, along with demand. You don’t require 100% substitution for this to occur.
I suspect you’ve been to too many green meetings, and not enough technology meetings. We’re very excited by the opportunities.
Live in the dark ages, if you want.
We’ll push on, as always….
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Michael Moore….
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The technical experts in energy and engineering agree – the private vehicle age we are used to is coming to an end. The use of cars on roads for transport is hugely energy inefficient, and we’ve only been able to afford it because we had large amounts of cheap fossil fuels.
The end of plentiful cheap fuels means the end of wasteful energy use, like cars. I may have a Physics degree myself, but I think this is a pretty straightforward conclusion anyone can reach with a little careful thought. Don’t take my word for it though, similar views are shared by Associate Professor Susan Krumdieck who teaches Advanced Energy Engineering at Canterbury University, and Associate Proessor Bob Lloyd, the director of the Energy Studies Programme at Otago University. I suspect this view would be pretty common amount staff of any university Physics or engineering department.
Those who wish it wasn’t so will be disappointed, but unfortunately, it is.
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alexking,
Do you hold this view even for non oil powered private vehicles?
Horse drawn wagons as the most primative example (rickshaw anyone).
Or an all electric car as the most technical example (fuelled by renewable electricity generation sources).
I think you are totally wrong. Internal combustion powered cars, yep. Alternative powered private vehicles, they will be around.
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Meanwhile, we have built society around cars, with motorways and urban sprawl. These indeed are not very viable without cars, but nevertheless cars will become an unaffordable luxury and unavailable to us. Oil won’t magically appear in the ground because we build motorways.
There are zealots who put complete faith in the market to solve all problems. Within the limited view of their tunnel vision, they are correct. The market can solve all problems. Unfortunately however, the market solution to peak oil will involve starvation for the majority of people in the world. And unless the market picks up pace very quickly on addressing climate change, the world will be uninhabitable for those who are left.
We all wish it weren’t so, but facts are facts.
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>>The technical experts in energy and engineering agree – the private vehicle age we are used to is coming to an end.
Stop lying. Some technical experts and some engineers may hold your view, and many others do not. Those building the technology, for starters.
tinyurl.com/4we22m
“The possibility of thus recapturing the good times of their youth has brought many well-known members of the “technorati? out of their homes in places like Woodside, California. Energy has become supercool. Elon Musk, who co-founded PayPal, has developed a battery-powered sports car. Larry Page and Sergey Brin, the founders of Google, have started an outfit called Google.org that is searching for a way to make renewable energy truly cheaper than coal (or RE<C, as they describe it to their fellow geeks).
Vinod Khosla, one of the founders of Sun Microsystems, is turning his considerable skills as a venture capitalist towards renewable energy, as are Robert Metcalfe, who invented the ethernet system used to connect computers together in local networks, and Mr Doerr, who works at Kleiner Perkins Caufield & Byers, one of Silicon Valley’s best-known venture-capital firms. Sir Richard Branson, too, is getting in on the act with his Virgin Green Fund. “
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Gerrit,
There are electric vehicles in our future, but not nearly as many as the petrol cars we currently have. Can we double our renewable electricity production? We have to pick up the slack of fossil fuel use (replace coal and oil), and power new sectors (transport).
Even renewable sources of energy are limited in a practical sense. I don’t want to dam any more rivers, I don’t mind windfarms, but there are limits to how much you can grow the energy supply. Really we have to re-think our energy consumption and decide on a level of consumption that we are comfortable with and give away the idea of continuing growth of energy use.
A strengthened RMA or some mechanism is needed as a society to balance these things up. Do we want to have a more energy intensive society and have windmills everywhere and huge industrial scale devices all around our coasts to harvest tide and wave energy? Or would we prefer to re-organise our society to use less energy and have less of an impact on our environment?
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>>We all wish it weren’t so, but facts are facts.
On the contrary, I think it fulfills your anti-car fantasies.
As I say, we’ve already solved the problem. Whatsmore, we’ve invented a better car, that is cheaper, and more sustainable, than the current oil based alternative to run.
The only issue now is ramping up production.
Do let us know when you catch up to 2008….
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alexking
The people I worked with at NASA didn’t reckon that private transport was dead. The things that have to go are disposable SUVs and common use of Petrol and Diesel. I think you need to poll your professor’s a BIT more closely on what can be and cannot be used for efficient transport.
The cars of TODAY are already relics, and anything with more than 2 liters of displacement will have to have to be recycled soonish… the rest in order of their efficiency, but there is no brief I know of that says we can’t have cars and roads. Just that we have to do something a bit more sustainable than powering them from stuff we dig out of the ground.
Methane from H2 that comes from electrolysis and CO2 from the air could be burned in the IC engine that is already installed in my car. It’s a common conversion and it will likely become MORE common in time. I could convert the car to run on electricity too. It wouldn’t go as fast or as far but it would get me to the supermarket and the train station and it would be more effective and efficient of MY time and work than the furschlugginer bus that shows up once in a while either completely empty or completely packed but never matches my schedule OR the train’s.
The car itself is inherently wasteful only if the production of the vehicle and its ancillaries is non-recyclable and energy intensive, and the fuel that powers it is likewise. The burden of meeting those conditions is an engineering problem that has to obey the laws of thermodynamics, but doesn’t necessarily violate them. The “waste” isn’t all that real and the hardest thing to solve in a really renewable sense is the tires.
How efficiently can we build electric motors? Li-Ion batteries? Dig up Al ore and get it to the smelter… make tube and sheet, stamp wheels? I know all the steps to this dance. None of them require so much of us.
What we won’t do is go as fast and as far as cheaply at first, but any prediction of the END of personal private transportation is a non-starter. We had personal private carriages AND roads before the internal combustion engine was even possible.
As a dues paying green I reckon the costs pretty closely… but as a former NASA engineer I know the technology pretty well as well. We need to produce more electricity and we need to work on our difficulty getting Wind Turbines built and our lack of a solar cell production facility here and all the other ways of producing voltage and amperage and there are a LOT of them… but we should be really really careful about predicting something like the end of personal private transportation, otherwise known as the automobile.
respectfully
B J
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There are no electric cars on sale in NZ. I know of a couple of people who’ve gutted petrol cars in Dunedin and turned them into electric ones, how good are you with a spanner?
Meanwhile, a significant number of people in NZ are unable to afford to continue to use their petrol powered cars.
What type of cars will GM, Ford, Toyota, Honda etc. be predominantly producing next year? Fossil fueled or electric?
And how will people who can no longer afford to pay for petrol be able to afford new cars?
Will rising fuel prices (current fuel prices) have any effect on the economy and jobs?
The economy is facing severe problems because of the end of cheap energy, and policies like a massive investment in public transport would alleviate that somewhat.
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alexking, The experts all agree…except Amory Lovins.
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Alexking… if I had to I could start from Al tube and rolled forms and sheet metal. I was a motorhead long before I became an engineer.
The fact that the economy is going to go into the tank because people didn’t listen to us earlier is STILL not the end of the private car.
It may be a more limited option in 10 years time than it is now (the end of boy racers?), but all we have to do is capture the gas being flared off at the oil fields and we’ve got fuel for a hell of a lot of converted vehicles. Things will change… and none of us are saying they won’t and there are some who think it’ll be easier than it will and some expect it to be more difficult… the point is that we’re in for a hard time with the economy of the planet no matter what, because there are 6+ Billion of us on a planet that can safely support half that number at best. That’s just reality knocking on the door. However, WE are not high on that energy hog. This is NZ and it has fewer people and more resources to share among them than most places on the planet and we’re isolated. We’ve got few problems we cannot address right here.
Ban electrical resistance heaters and subsidize production and installation of insulation and other forms of heating for houses, put on a project to capture the wasted gas and to convert vehicles to CNG or LNG, build windfarms, geothermal, a licensed solar cell printing facility and our very own “electrovolkswagen” project. Anyone know how to say something like that in Maori? Probably make a good name for the things. We could have full employment for everyone while the rest of the world suffers the worst economic decline since the 30′s… not saying we WILL, but we could.
If we just quit selling each other houses, pretending it’s a productive way to run and measure the economy, and sending the interest to Australian banks.
respectfully
BJ
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Well contrary to Alexking’s thinking the electric car was very popular before the wide spread use of the internal combustion engine.
There were a lot of benefits to using an electric car over an internal combustion engine.
I don’t think anyone really thinks private transport is going away.
Lets all say this together shall we Bus systems are a horible way to move people. Try taking the bus from the east side of manhatten to the west side down 42 street. It is much faster to get out and walk.
Light rail is ok, but needs to be designed with high speed and longer distances along with satellite communities feeding into a centralised CBD. It kind of needs to be designed when you are building the city from the begining, trying to retro fit rail into a city is expensive.
Also Alex why are you targeting cars when you talk about peak oil, forget about the cars and try concentrating on the food, I think most of the oil used in NZ gets put onto the land.
Also Alex what are you talking about with regard to the market determining starvation for the majority when peak oil comes. That is rubbish the market has nothing to do with the starvation coming. If we continue to use our current methods of farming many people in the world will starve and this has nothing to do with capitalism, it would happen under a communist regime as well. Without the oil we can’t produce the yeilds required to feed everybody. People are going to die there is nothing you can do about it and there is nothing the greens or the new zealand government can do about it.
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The Ultimate Resource by Julian Simon
Review by
Herman E. Daly
http://www.mnforsustain.org/daly_h_simon_ultimate_resource_review.htm
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There’s a comment in the comments section of BP’s link re the general state of US (and other) electricty infrastructure.
http://www.economist.com/opinion/displaystory.cfm?story_id=11565685&mode=comment&intent=readBottom
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bjchip: hear hear. You should run for parliament, gawd knows we need more engineers in power and less social historian & buiness/banking types.
Only flaw in those proposals is the cost will be considerable, and as we all know every time someone suggests a large project in NZ it gets immediately tarred with the ‘Think Big disaster’ tag- despite many of those projects being considerably successful.
My personal preference is for govt to buy up the soon-to-be abandoned urban building sites all over NZ and start building public / subsidised housing close to urban areas. 4-5 storey tall terraces, something like the Parisian model. Suburban refugees who have lost their far-flung houses to bankruptcy will soon be in desparate need of accommodation. However I’m not sure whether a National govt would dare build public infrastructure.
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BJ, Two small but positive steps happened recently from two of electricity SOEs
Mighty River Power have bought a stake in Windflow and Meridian has started a company leasing rooftop pv systems to LACQs.
Both items were in The Press last week. They might still be in the business section on the web edition.
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We need to ban all the people with degrees in law, social science, banking etc from parliment and instead vote in a bunch of engineers for a change.
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BP:
Your enthusiasm seem to be getting the better of you.
Please remember where you are:
As a guest on frogblog your views are welcome, but confrontational comments don’t get us very far and “put downs” are unnecessary!
(Greens work towards consensus, and that is an art worth leaning!)
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woops! that was an art worth “LEARNING” not leaning!
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How did the Greens finish up with so many leftists? Looks like a very selective means of consensus.
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Why do you assume that high density buildings near the CBD use less energy and have a lower carbon footprint than low density low rise housing?
Read Consuming Australia and you will see that to their surprise the opposite is true. Mind you their conclusion was that household income is the key driver and that as rich people tend to live in the city centre their consumption is higher.
However Wendell Cox took up the base data and found that:
Lower GHG emissions are associated with
• urban fringe locations, not the core.
• higher rates of detached housing.
• greater automobile use.
• lower population density.
Read the report at:
http://www.affordablehome.com.au/files/pdf/research-pdf/RDC_ACF_Greenhouse-Report.pdf
And uk-kiwi must be one of the very few who regards the Paris slabs with affection. They are the centre of just about all the social unrest in Paris.
Lighweight, adaptable houses with room for a garden and some expansion are the key. IF you force everyone into downtown all you do is increase congestion.
Roads are not the result of the invention of the motor car. They are incredibly useful – that’s why the Romans built them and we still use them. All the main roads in Auckland city were built before the invention of the motorcar. All we have done since is add about 3% of the network as motorways.
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Owen – According to the Energy Data File released this week, 34% of all our observed consumer energy in 2007 was used for private transport. This does not include all the energy used for the Commercial Transport fleet.
If you just look at oil, the percentage of oil used by the private transport fleet in 2007 was 67%. Again, this excludes the oil that was used by commercial transport.
Agriculture used 4.3% of the oil in 2007.
So clearly it is the motorcar that has the oil consumption problem. I never said that the car would disappear, as BP and others have suggested, only that we need alternatives, fast. I never claimed that we would not need roads, either, as Owen likes to say.
Since BP is such a Blue Sky optimist, I’ll wait for him to pick me up in his Tesla, because obviously the Nats pay him well enough to afford one.
When the masses can afford it, I’ll believe it. That day may come, but not until we go through a very painful withdrawal from our oil addiction, which BP and his mates are in complete denial of. In the meantime, I would like to see some public transport alternatives for our cities, so the average kiwi can commute. (again, not the rural strawman Owen, please)
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BP is right, the technologies exist today to replace the motorcar in a design and engineering sense, i.e. we can build them. But can we build enough of them, and quickly enough, to avoid massive social dislocation.
For me, the time to ramp production of on-board storage is the key issue.
For example, Toyota announced last month that it will ramp production of its batteries to 1M by 2010.
http://tinyurl.com/6opcal
Sorry but that’s not going to cut it, especially since rate of replacement of the fleet is going to need to climb beyond the usual. So I think the market is going to do its thing and price these new cars out of the hands of the middle class and below in NZ.
I’d like to hear from Alex, BP and Owen on solutions to that problem (production ramp up of storage). Not because I think there are none, but because it would be a more interesting discussion
In the meantime while we work that one out it would seem to be prudent to think about urban design and transport ‘stop gaps’ such as PT so we can avoid the gray slabs of Paris while also avoiding the continued sprawl of Auckland and our other big cities.
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Soaring fuel prices prompt [Japanese] consumers to reconsider overseas travel
http://www.yomiuri.co.jp/dy/business/20080703TDY08307.htm
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>>Since BP is such a Blue Sky optimist, I’ll wait for him to pick me up in his Tesla, because obviously the Nats pay him well enough to afford one.
The Nats don’t pay me anything. I’ve never voted National and I’m not a member.
Born poor immigrant working class. Made my own money by, you know, working and investing. Yes, I can afford a Tesla if they, or their cousins, turn up.
I’ll gladly take you for a spin
>>As a guest on frogblog your views are welcome, but confrontational comments don’t get us very far and “put downs? are unnecessary!
Ironic. Apparently I’m the resident “troll” for speaking the truth as I see it.
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You can be a bit smug, but hardly in the running for the title of resident troll!
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Frog, the statistic you quote is correct.
BUt this simply reminds us of the problem of defining system boundaries.
The statistic refers to the percentage of “Consumer spending” which is direct spending by the consumer.
My first statistic was the percentage of fossil fuel burnt which of course includes power generation, shipping, aircraft and agriculture.
The Australian study tried very hard to calculate the carbon footprint of the average household and included food, and transport and other goods and services.
The statistic you quote is useful if you want to demonise the motor car. But don’t be surprised if, after driving all the cars off the road, there has been no meausurable change in fossil fuel consumption.
On board storage can be supplemented by induction from cables under the road bed – the technology developed here in NZ by Prof John Boys of Auckland University. The cable can also be used as a guideline so that you can drive on to the motorway, engage the system and read a book while drawing power from the same cable which has turned a whole bundle of cars into a “train.”
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Owen, I don’t understand why you are talking about fossil fuels in general? The issue is crude oil has reached $145 a barrel and the signals are it could go higher yet. Trucks, aeroplanes and fishing boats are simple examples where there are no quick or easy substitutes for oil powered propulsion. The “technology will save us” argument just won’t work in time to save our oil dependent economy, which is already heading into recession. We are being forced to fork out more and more money to oil exporting nations. The only way out is to reduce our reliance on oil. Agree?
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