Ha Ha yes Hasbeen, I really do think we are going to need some magicians.

What you warn of re the pollies is true but they may get the message
too late from overseas.
If it gets to that stage there will be be no pensions or anything.
It has all the marks of Joesph Tainter's book, The Collapse of Complex Societies.
That will have the lefties sucking their thumbs !

Bazz,

I was surprised by your last paragraph.

>”Australia's only option is to prohibit the export of coal and gas, …”

This approach has negligible likelihood of success.

What is needed is deregulation, not more regulation and protectionism. Deregulate to allow markets and competition to do what they do – deliver the goods and services people need and want at least cost. The most important commodity is energy. Everything else is derived from energy and human ingenuity. We need least cost energy that meets requirements, the most critical of which are secure and reliable supply of energy. To succeed the approach needs to reduce government involvement, not increase it. Governments don’t know best.

These are some of the likely consequences of restricting energy exports:

1. Australia’s economy would be severely damaged. That means lower standard of living, less jobs, poorer pay, less government revenue so less funds for education, health, hospitals, cities, infrastructure, law and order, defence, etc. (compared with no export restrictions).

2. We can’t restrict supplies of energy to other countries. It’s an essential resource. If we try, first there’d be trade wars and ultimately we’d be invaded. Restricting energy supply to our customers is a sure way to cause war (UK’s attempts to block Japan’s oil supplies was a main reason for their preparations for war and entry into WWII). How long would we last if China blocked our oil imports?

3. Restricting trade is the opposite of free trade. It’s a return to protectionism. This would encourage other groups to argue to restrict exports of uranium, meat, food, IP, etc.?

4. Any government that tried to legislate this approach would be thrown out.

We need to remember that fossil fuels are hugely beneficial to humanity and to the environment (http://www.cato.org/publications/policy-analysis/humanity-unbound-how-fossil-fuels-saved-humanity-nature-nature-humanity). So, we should not restrict exports nor raise the cost of fossil fuels. Instead, we should focus on removing the impediments on nuclear energy that 50 years of irrational, anti-nuclear scaremongering has caused governments to impose.

I urge people to seriously consider the deregulation approach and stop advocating policies that have negligible probability of success.

Bazz,

Over about 50 years nearly all existing fossil fuel power stations will be replaced. They will be replaced by the technologies that are expected to supply electricity to meet requirements at least cost. If we remove the impediments to nuclear power, it can become least cost and will be the technology of choice for replacements. Thereafter, the replacement of fossil fuel plants at the end of their economic life is done at no net cost, in fact as the costs come down, it will be net economic benefit – and that’s without even including the benefits of lower externalities (like reduced fatalities per TWh).

Allowing nuclear to be cheaper than fossil fuels, would mean most fossil fuel electricity generation would be replaced by near-zero emissions nuclear in the 19 countries that contribute 80% of the world’s GHG emissions. Assuming this reduces emissions intensity of electricity by say 80% (France’s EI is 90% less than Australia’s), and assuming electricity and fossil fuels for heat and transport displaced by electricity over the period avoid 50% of total emissions in the 19 countries, then this deregulation policy alone would reduce global emissions by 80% x 80% x 50% = 32% over 50 years. Nuclear would be the cheaper option in other countries too, so they would also convert to nuclear later in the period the period.

I hope you will give serious consideration to the deregulation approach as an alternative to the regulatory approach. Regulation that raises the cost of energy or damages economies has virtually no chance of succeeding. It will not get sustained support and even if temporarily implemented it will not be sustainable for much the same reasons as carbon pricing has little chance of success (explained in these two posts):

Why carbon pricing will not succeed, Part I: http://catallaxyfiles.com/2014/10/26/cross-post-peter-lang-why-carbon-pricing-will-not-succeed-part-i/

Why the world will not agree to pricing carbon, Part II: http://catallaxyfiles.com/2014/10/27/cross-post-peter-lang-why-the-world-will-not-agree-to-pricing-carbon-ii

Peter Lang oil & gas may cease to be important as a fuel for electricity generation, & I agree completely with the requirement to go nuclear, but that is only a small part of their importance to us.

First they are pretty important for the production of plastics. The modern world can not operate without a huge quantity of plastic.

Yes we could use cellulose to produce some & perhaps many materials to replace those plastics, but no where near all of them.

Then of much greater importance is fertilisers. Without these much of the current population would starve. Herbicides & pesticides equally critical to food production also require large volumes of hydrocarbons.

Then there is of course the fuel required for mining & agriculture. We can perhaps get by with electric light transport, but heavy mobile work will require liquid fuel for a very long time.

If it were not for our huge reserves of shale & coal gas, & central Queensland's oil I would also want to see us reserve these materials for our own use. I would much rather see reduced wealth & welfare for us now, but with some still available for our grand kids.

I expect we will ultimately miniaturise steam generation using nuclear fuels sufficiently to steam power most vehicles, but not for quite some time.

Peter, I agree that your reasoning is correct, but---
I would like to reserve our coal while its ERoEI is still, I believe,
at a high level to enable us to build a fleet of nuclear stations.
Because of finance it will be a long drawn out process and the more
coal we export in the meantime the lower the ERoEI will become.

In fact I wonder if it is not too late already to be able to finance
the new energy regime ?
I can see the existing coal fired stations continuing for the next 100 years.

Bazz, I understand the point you are making, but I am not persuaded.

1. I am convinced any attempt to restrict exports economically damaging and cannot succeed. World markets are becoming more integrated, not less. Free trade is best for human well-being. Government intervention to restrict exports (or imports) is the wrong approach. The correct approach is to remove the impediments that are making nuclear more expensive than fossil fuels. This will address all the issues. Once nuclear is allowed to be cheaper than fossil fuels, there is no economic cost to replacing them, only benefits.

2. I am not convinced of the immediate problem with running out of fossil fuels (but haven’t researched it).

3. Fossil fuel plants have a life of about 40 to 50 years (including life extensions). So most existing plants will be replaced in the next 50 years. The energy needed to replace existing plants with new plants is similar (ball park) whether the new plants are fossil fuel or nuclear. So the ERoEI issue applies to either technology.

4. There is effectively unlimited energy available for electricity and liquid transport fuels from nuclear power (unlimited transport fuels from sea water: http://bravenewclimate.com/2013/01/16/zero-emission-synfuel-from-seawater/ ). So, we will not run out of energy. Only the high cost of nuclear is preventing faster replacement of fossil fuels.

5. There is no issue with financing the new energy regime if we can get the focused changed to removing the impediments to low cost nuclear power! I’d urge serious consideration of this.

Hasbeen, there is no shortage of hydro-carbons to meet all the needs you mention. Hydro-carbon fuels can be produced from electricity, hydrogen and sea water. However, I agree that fossil fuels should be preserved for non-energy uses for the medium term. The way to achieve this is to allow nuclear to be cheaper than fossil fuels, not by trade barriers. There is one key solution here. Let’s focus on it.