After being held up for 12 long years by conservatism it has become urgent for action to begin. All government buildings need to be at least partially run on renewable power and if Rudd is serious he should adopt the Greens policy of issuing every home with solar panels and a solar hot water system. Wealth will not be important if this planet is allowed to go into deterioration mode.

Unfortunately, Lionel leads with an assertion that oil production has peaked, implying that its a commonly accepted fact. This is far from being the case - many Peak Oil researchers think it may have passed peak in 2005/2006, but admit that its really too early to tell for sure. As he's opened with such an easily disproven point, a sceptic would easily dismiss the rest of his letter as an ill-informed extremist rant, which is unfortunate.

Peak Oil isn't the immediate problem. What is of greater concern is the massive increase of demand for oil & its products, and that oil production hasn't and can't keep up with this demand - whether its peaked or not is beside the point. Furthermore the oil producing nations are developing their own economies and therefore increasing their own consumption of oil - which means that they are exporting less and less. Lastly, Australia did pass our own domestic Peak Oil back around 2000 (when we were mostly self-sufficient), and its estimated we'll be importing something like 80% of our oil by 2012.

These facts are readily apparent to anyone who wants to look, and are perhaps more relevant to Australia's energy future. Mr Rudd's government is certainly well aware of it. The question is what, if anything, are they going to do to prepare our country for a future where oil's availability becomes scarce and its price increases dramatically, regardless of whether or not global Peak Oil has arrived?

We already have the technology to move forward beyond oil all that is needed is the political will. We should stop making O.P.E.C richer and concerntrate on relieving the ordinary working families budget.

Lionel Orford is three-quarters correct, and I congratulate him on his sensible list of action points (most of them, anyway).

I don't think the picture is quite as dismal as Orford does. He makes a couple of very strong assertions which are not justified, the most glaring of which is that "There are simply no alternatives to oil." It's sufficiently qualified to make his statement technically correct, but the underlying conviction is undermined by neglecting the large and rapidly-innovating field of liquid biofuel (whilst simultaneously advocating coal-to-liquids!).

There's also a glaring omission of the possibility of adopting technology which provides us with the same services we now get from large quantities of liquid fuel, with less. This is as simple as France's new policy of retiring inefficient and discounting efficient equipment:

http://www.greencarcongress.com/2007/12/france-to-insti.html

Orford says that coal is the only resource we have that can rapidly be deployed to deliver increased electricity, whilst advocating investment in CO2 capture and storage. There are three large errors here: we don't actually need more electricity than we already use (it is much cheaper per kilowatt to replace inefficient appliances than to buy new power stations, we can very cheaply release at least 25% of the existing supply this way); it is cheaper and faster to deploy smaller gas-fired and intermittent renewable generators than power stations; and capture-and-storage, being mostly nonexistent, *can't* be rapidly deployed.

His second-best choices for electricity supply, solar thermal and geothermal power, tap vast supplies of free energy and are proven techniques, immeasurably preferable to CCS for the investment required to deploy them widely.

Last, Orford's dismissal of large-scale deployments of intermittent renewable electric generation "because they can't be managed on a large scale" is timid and blinkered. Existing electrical networks deal with variations in demand of up to 50% of their gross capacity and would be "peakier" still without off-peak demand management. Wind and sunshine are strongest during the day, when demand is also high. Existing techniques used to cope with demand variation will cope equally well with variable supply, and could be dramatically improved upon in coming decades.

Do we really have the technology to move beyond oil? Perhaps in the laboratory, but certainly not in the real world where it actually matters.

Despite all the hype about biofuel, so far it has not been a viable replacement for oil. It can't be produced in anything like the quantities necessary, and what is produced is at a huge cost in fertile farmland and much-needed water. You can talk about the "second generation biofuels" as much as you like - I'll believe you when its demonstrated that they can produce even half of our current fuel requirements without taking a massive toll on our agriculture and environment. I'm not saying that research & money shouldn't be plowed into biofuels, just that we shouldn't assume it to be a ready-made solution.

Don't get me started about coal to liquids, with its horrendous C02 emissions and terrible EROEI.

If we can't rely on the availability of liquid fuels, is electrification an alternative? Well, to a degree. Food and ore could be moved by rail, provided Australia has an electrified rail network (oops). Farmers could switch to using battery powered tractors and combine harvesters, couldn't they? Our diesel-burning fleet of transport trucks - all they need do is switch to batteries. And I'm sure us consumers will all happily pay many thousands of $ for our vehicles to be converted, assuming that's possible.

Please forgive my sarcasm. Its just that none of these electrification "solutions" are commercialised yet, and nor is there evidence that they're on the way. How many plug-in electric cars are on the market now? What are Holden, Ford and Mitsubishi building at their struggling factories? Electric cars? Hybrids? Efficient small cars? Or thirsty big V6s and V8s?

We _could_ potentially use our vast Natural Gas reserves in the form of Compressed Natural Gas (CNG) ... except we've already sold much of it to China at a fixed price contract over 30 years.

Face it, we're not ready for a shortage of oil, and our governments & industries are doing absolutely nothing to prepare.

This is a great letter, and Orford is a realist. There is no future in alternatives. Pages 16 to 41 of this report, http://www.peakoilassociates.com/POAnalysis.html are based on government and scientific studies. Whatever attempts are made to develop alternatives will just use more fossil fuel in the process. It does not matter is global Peak Oil production occurred in 2006 or will occur in 2012. The time is now and the governments of the world have no risk management plans in place. The several posts by Chris Shaw on this site are worth reading, and all can be found here: http://www.onlineopinion.com.au/view.asp?article=5964

Last time I checked, Australia in fact had huge amounts of
gas available from the NW shelf. Untapped developments such
as Gorgon, Pluto etc, mean that these volumes will only
increase, but to develop them and invest billions of $, companies
want commitment from customers, which is fair enough.

So Chinese, Korean and Japanese customers are snapping up
these contracts of supply for the future. Where are Eastern
States motorists, who are concerned about energy?

Clearly nowhere, as short term they prefer the convenience
of petrol versus gas. Should/if peak oil cuts in and upsets
these convenient supplies, they will surely scream blue murder
as to why we are exporting the stuff.

If you guys want energy commitment for your vehicles, what
about making a commitment to the companies risking everything?
A guarantee of purchase will mean a guarantee to supply for
many years to come, right here, from our very own gas wells.

Peak oil won't even matter...

commuter,

Biofuels certainly can't meet "business-as-usual" demand increases. But doom-and-gloom stories *all* look at this big gap between projected demand and anticipated supply and say "Help!" It's just silly. Demand *cannot* exceed total supply, so the gap is nonexistent. If the limits to supply are real (they are) then they limit demand also, through high prices or by better, more well-managed means. Any well-managed scenario would see demand for petroleum decline a little faster than the actual production capacity declines. Remember eg. France has only 20% the per capita petroleum demand of the USA or Australia.

Even first-generation liquid biofuels are efficient when done right; several countries produce them cheaper than petrol. Agricultural subsidies make all sorts of inefficient investments viable. Next to paying farmers not to produce, even US grain-fed ethanol is money well-spent!

cjwirth,

you peakoilassociates are unconscionably pessimistic. Not only are the Union of Concerned Scientists' 2003 estimates of the limits to renewable energy unduly low (perhaps merely anachronistic), they are interpreted in the analysis (pp. 16-18) with astonishingly silly numerical shenangians. The analysis *completely* neglects the possibility of reducing demand for electricity, liquid and gas fuels with end-use-efficiency, cogeneration, demand management and yes, high prices.

"All alternative liquid energy sources combined could yield at most the equivalent of a few million barrels of oil per day."

When exactly does that hold true? *Now*, with petroleum at the peak of its production (just shy of a hundred million barrels of oil per day), liquid biofuel production is already over one million barrels per day; this is *before* any of the really cheap techniques have been commercialised and before any of the countries (save Brazil) with the most advantagous conditions have begun production in earnest. Australia's efforts so far are just dabbling. Bushfires are wasted biofuels.

With concurent and easily-achievable demand reductions, and more realistic estimates for renewable energy including bioenergy from other sources and techniques than those surveyed, the supply of energy from renewable sources as a proportion of total supply can increase very quickly. It will be a long time before it needs to reach 100%.

Commuter,

You are completely correct that I should have stated "it is now highly unlikely that production levels can be raised .." rather than "it will take a minor miracle to raise production .." which is effectively saying it's impossible. It isn't impossible, it's just highly unlikely.

You are also correct in saying that PO is not the crucial issue but when demand outstrips supply. By simple logic demand cannot exceed supply and demand destruction must occur. The problem is that demand destruction is economically devastating.

"Mr Rudd's government is certainly well aware of it." - are they? It's a question I have been studying for a while. I think that they may really believe that the market will sort it out.

Xoddam,
I should have put the development of renewables ahead of coal to liquids (CTL). In fact, the only reason I put in CTL at all is that desperate times call for desparate measures. In the full version of the letter, I do stipulate that CTL should only be done if accompanied by CO2 capture and storage. However, this is unproven and decades away. Also CTL would allow us to continue using high carbon emission transport fuel. I made a mistake in advocating CTL.

Biofuels are an abomination! We will very soon be unable to feed the ravenous hordes of planet earth and biofuels directly attack our ability to do so. Also, vast amounts of habitat is already being destroyed to grow them and only a ridiculously small part of our fuel needs could come from them anyway.

I never denied their were alternative ways of providing our transport needs -in fact that is what I am adocating. The Hirsch report http://www.pppl.gov/polImage.cfm?doc_Id=44&size_code=Doc points out , that we require decades to roll out the measures needed to deal with PO if we are to avoid an economic distaster. The problem is not that there are no solutions, but that there is now no time to implement them.

I stand by what I say about the unmanagability of intermittent generating sources. For further reading see my comments here: http://webdiary.com.au/cms/?q=node/2229&PHPSESSID=047110ff947461911a0e33b74b5acfa

commuter,
have you not heard of the solar car race from one end of this great continent to the other? All that needs to be done is the Rudd Government invest in R&D to make this a reality for all vehicles. Also Brazil does not need petrol for their vehicles there are a myriad of ways to move beyond oil as I said all that is needed is the political will.

*Biofuels are an abomination! We will very soon be unable to feed the ravenous hordes of planet earth *

Perhaps the ravenous hordes should be finally given access to
family planning!

Biofuels are certainly not an abomination. Why should energy from
an arab oil well be worth more then potential food energy?
There is no doubt, they will eventually compete directly. If
the Arabs want more for their oil, their cost of wheat etc will
rise accordingly.

http://www.news.com/8301-11128_3-9811702-54.html?tag=nefd.lede

Clearly there is much money and talent being ploughed into
biomass biofuels, so I would not write them off just yet, its
very early days.

Biofuels also provide some energy security. Just don't look at them
as an answer to everything, but one of a myriad of energy solutions
of the future.

On this place, its comforting to know that I can crop 5% to a crop
like canola, use legume based N and produce enough biodiesel to
grow cereals and meat from the other 95%. You ravenous hordes should
be happy about that :)

.

The idea that there are no substitutes for oil (and for coal for that matter) is simply wrong.

The amount of energy available from renewable sources dwarfs that we currently obtain from fossil fuels (of the order of 20,000 times as much ). Its not a question of can we switch from oil, just of which are the best ways to do so.

Geo-thermal power is something we have in abundance to replace coal, why is it that people put the economy before common sense? If we don't manage to stop this freight train that is Global Warming in the next 14 years we will not have an economy. For example the $6.8 billion dollar Great Barrier Reef tourism trade will be lost people no longer have the luxury of being complacent we need action, and we need it now.

I'm amazed that there is all this discussion around peak oil and none around peak phosphorous, which is used so heavily in food production (source: http://www.energybulletin.net/33164.html).

Couple peak phosphorous with peak oil (used in the production of food and its transportation) and you have a serious problem that is going to be realised in a generation or two.

As coal is easily converted to fuel as per the Sasol plant in South Africa, I would say that peak oil is still a way off.

The greater issue is climate change. With Rudd's delegation to Bali steadfastly blocking any set reduction targets and the moritorium on nuclear, all I see for the next few decades is more of the same.

Amory Lovins from the Rocky Mountains Institute www.rmi.org has an excellent talk at http://www.ted.com/talks/view/id/51 and a book at http://www.oilendgame.com/

He outlines how the USA can wean itself off oil and benefit their economy. Australia can do the same but we are in the fortunate position of having lots of sunlight, geothermal resources, natural gas resources and are able to produce cellulose for conversion to liquids. Lovins gives a blue print for solving the issue.

Biggav: "The amount of energy available from renewable sources dwarfs that we currently obtain from fossil fuels." This is like saying that there's more gold in the sea than on the land - it's true, but there's very good reason that we don't just go and help ourselves to this vast resource of gold.

Wind, Photovoltaic Solar, Thermal Solar (without heat storage), Waves and Tides only generate electricity intermittantly, rather than when needed and have a very low capacity factor - most below 20%. Since there is no feasible way to store electricity on a large scale, these sources can't make up more than a small proportion of the total system. Furthermore, their entire full load capacity has to be provided from conventional sources because they can never be relied upon to generate when required. And Yes - there are times very little power is generated even from diverified systems.

The second problem is Energy Returned on Energy Invested. There are 2 promising technologies that produce power as it is needed: solar thermal with heat storage and hot rock geothermal. It is true that we have vast resources of these energy sources. However both of these deliver a small amount of electricity generated from a lot of heat, because very high temperature working fluids are not available, which fundementally limits the efficency of converting heat to mechanical work done. Hence absolutely huge quantities of these systems need to be deployed for a relatively small amount of power generated.

Building such a large infrastructure is not just an issue of money, it is a matter of expending vast amounts of energy to mine the minerals, smelt the steel, make the cement and so on.

Hence the electricity generated must be several times more expensive - at least 5 times by my estimation. This leads to a situation that it is impossible to continue using energy as we currently do - we have to use it much more sparingly and only for essentials like growing and delivering food if we only used renewable energy.

Yabby says: "I can crop 5% to a crop like canola, use legume based N and produce enough biodiesel to grow cereals and meat from the other 95%." This may be true for meeting your farm inputs within your fence - but I doubt even that. It certainly could only be true in a well watered fertile spot, which are in pretty short supply - this is not the majority of Australia's farm land.

Then you have to realise that people don't sit and eat at your farm. They live in cities and a large amount of additional energy is required to get the food processed and to market. This can't be changed in years or decades - it will take lifetimes.

The massive population boom over the last several lifetimes has happened because of the food made available through industrial agriculture fueled by petroleum. We currently consume around 10kJ of fossil fuel for every 1kJ of food on our plates. The impracticality of replacing this with biofuels should be clearly apparent.

So we won't. We will move to a much lower energy way of doing things and this will involve doing without a lot that we currently take for granted. Biofuels, where they are beneficial, will be used but they will never "replace oil" in anything like our current system.

Lino

There are ways of storing heat efficiently and solar thermal can store heat during the day for use at night so it can be used for base load. Geothermal obviously is base load.

The running costs of geothermal and the solar thermal are about 1 cent per kwh (ignoring capital costs). The running costs of coal are at least 2 cents per kwh. The capital cost of geothermal and solar thermal is about 3 times the capital cost of the cheapest dirtiest coal. Depending on the discount rate both geothermal and solar thermal are competitive today. Both geothermal and solar thermal produce at least two orders of magnitude more useful energy than it takes to construct.

"this is not the majority of Australia's farm land."

Actually Lino, most of Australian agriculture is still dryland
and does not rely on irrigation. Most meat is still produced
by livestock grazing grass and clover based pasture rotated
with cereals/canola is the way its done. We export most
of that grain/meat, so people like you never see it.

Alot of our farmland does very little but have sheep on it,
growing wool. Producing biomass and other potential biofuel
energy crops, does indeed have lots of potential for agriculture
in Australia, to provide its own energy. In this respect we
are far better off then agriculture in other countries, which
are far more intensive and more reliant on oil.

Nobody is claiming that biofuels will "replace oil", mearly that
its one of a myriad of methods we can use to provide future
energy. Stop looking for one magic bullet.

Fickle Pickle

Your figures on geothermal energy make me want to run out and build one now, however, my research reveals:

"The idea of extracting energy from hot dry rock originated in the United States 30 years ago and since then, 400million dollars has been spent on developing the technology world wide. The research programs have now stopped in the United States and the United Kingdom but investigations are still underway in France and Japan.

Overseas the programs have failed to extract the energy economically for a range of reasins including poor rock structure, low water flow rates or low rock temperatures. Professor Rahman believes Australia's hot rocks have the right temperatures and geological structure to succeed. But this is yet to be proven. Another potential hurdle for hot dry rock is its thirst for water. A small five megawatt plant would use eight and a half megalitres of water per day, which is about five olympic swimming pools and a full scale commercial plant would use ten times that amount."

Which would indicate that geothermal energy in Australia is not yet technically possible and even if possible likely to use most of its electricity to desalinate the water it needs. A serious dud if I ever saw one.

Democritus

I certainly hope you are wrong as I am investor in geodynamics www.geodynamics.com (btw so is Origin Energy, The ANU, ANZ, Citicorp etc). They are drilling their third well and have almost finished stage 1 of a three stage process. Stage 3 in their words will

Stage 3 involves the scaling up to a commercial plant in the order of hundreds of megawatts. A study of a 300MWe development requires a total of 37 wells (16 injection and 21 production) and constructing a power line from Innamincka to the national grid. The total cost of the station, including both underground and surface development is estimated at $770 million, total electricity costs are estimated to be between 4 and 5 cents/kWh, whilst operating costs are estimated at less than 1 cent.

They have found with their first two wells that the rocks are more porous than first thought but better still there is a lot of water already there. There is more than enough heat in the rocks to keep Australia going indefinitely.

As a backup we have solar thermal. Take a look at another Australian initiative that is being financed out of Palo Alto http://www.ausra.com/ This will deliver energy for about the same price as Geodynamics and they have also solved the heat storage problem so that their plants run all night.

Things are happening and really there is no excuse not to do it.

*Take a look at another Australian initiative that is being financed out of Palo Alto http://www.ausra.com/ *

FP, thanks for the interesting link! It just goes to show the role
that smart venture capital can play in financing these developments.

Vinod Khosla is clearly becoming a major player in the alternative
energy stakes, he also plays an important role in the biofuels
industry.

http://www.news.com/8301-11128_3-9811702-54.html?tag=nefd.lede

What I'd like to see is some enterprising Australians take this
kind of basic solar technology, as developed by Mills and come up
with a simple air conditioner, driven by steam, driven by solar.

Air conditioners are a huge power drain at peak power times and
are most required on days of maximum sunshine. Surely it would make
more sense, to convert that solar generated steam straight to
driving an air conditioner compressor, rather then first to
electicity, through a power grid, then back to homes?

Fickle pickle,

As the company is using gov funds to do the work, the risk is of lack of funding not lack of generation. I would not expect their promo page to say that it is a waste of money. However, it is very thin on technical details.

I reserve judgement until I see more than fluff.

Democritus,

The company has received a $6.5 start grant compared to $100 million raised from the public. This grant is offset by a reduction in the R&D tax rebate available to all companies for R&D. It is possible to argue that the company has received no net assistance from the government.

The company asked to be supported further but has received no further funds. At the same time the coal industry has received several hundred of millions of dollars for sequestration research.

Not sure how much extra information you need to understand what is going on but there are 10 listed companies in Australia in the geothermal area and there is a limit on how much information can be released.

With respects to your previous remarks on European failures one of the many reports on the web site states

"The closest thing to the world’s first commercial EGS project has just commenced operations at Landau in Germany in October 2007. Unfortunately, there is only limited information available on this privately owned project, but we understand that water with a
temperature of 155°C is brought up to the surface through the closed-loop production well from a depth of 3,300m and converted into electric power of 3MW to supply 5,000 homes with electricity and some 300 homes with heat. This is essentially a pilot plant to demonstrate commercial viability, which is expected to lead to an expansion at Landau, and to be followed up at 20 other locations in Germany."